Patent Cliff: Blockbuster Drugs Worth Up to $500B Face Generic Competition

The global pharmaceutical industry is entering one of its biggest patent expiry phases in over a decade, with nearly $236 billion in annual branded drug revenue at risk between 2025 and 2030 as roughly 70 blockbuster medicines, each generating more than $1 billion in annual sales, lose patent protection. A broader analysis by Evaluate Pharma puts more than $500 billion in sales potentially exposed to generics and biosimilar competition between 2026 and 2032, creating significant opportunities for manufacturers of lower-cost alternatives.

Keytruda (pembrolizumab), Merck's top-selling immuno-oncology drug, posted 2025 sales of $31.68 billion, almost half (49%) of Merck's total 2025 sales of $65.01 billion. Johnson & Johnson is already facing biosimilar competition for Stelara (ustekinumab), which posted first-half sales of $1.40 billion, a 57.4% decline year over year, after full-year revenues fell from $10.36 billion in 2024 to $6.08 billion in 2025. J&J's Darzalex (daratumumab) was its top-selling drug in 2025 with sales of $14.35 billion. Bristol Myers Squibb faces generics/biosimilar competition for Opdivo (nivolumab) with 2025 sales of $10.05 billion, Yervoy (ipilimumab) with $2.9 billion, Eliquis (apixaban) with $14.44 billion, and Revlimid (lenalidomide) with $2.95 billion. Amgen's Prolia/Xgeva (denosumab) had 2025 sales of $4.41 billion, Repatha (evolocumab) $3.02 billion, and Enbrel (etanercept) $2.23 billion. Novo Nordisk's Ozempic (semaglutide) patent will expire in several countries starting in 2026, including India and Canada, though generics competition is expected mostly in the early 2030s.

According to CareEdge Ratings, drugs generating nearly $142 billion in annual sales in 2025 are expected to lose exclusivity by 2030. After accounting for steep price erosion, this is expected to create a market opportunity exceeding $30-40 billion over five years, of which Indian companies are expected to capture around $3-5 billion. More than 60% of the drugs losing exclusivity are large-molecule biologics, marking a structural shift from previous patent cycles largely dominated by small-molecule medicines. India is positioned to benefit due to its favourable patent framework, strong generic drug manufacturing base, growing biosimilar capabilities, and cost-efficient production ecosystem. Torrent Pharmaceuticals became the first Indian company to launch generic semaglutide following the expiry of the molecule's patent in India, introducing both oral and injectable versions. Sun Pharmaceutical Industries continues to invest in research and development, including GL0034, an oral treatment for obesity and diabetes currently in Phase 2 trials.

GSK is turning to a multibillion-dollar cost-cutting program to help grow profits while absorbing the impact of a sizable patent cliff. In its latest quarterly earnings report, the company revealed a three-year restructuring plan designed to save a total of about £1.9 billion, or $2.5 billion, per year. The savings will come from shifts towards AI technology, as well as the streamlining of supply chains and support services, and the company will vacate a research and development site in Stevenage and establish a new global center in Cambridge, U.K. GSK faces the coming loss of patents between 2028 and 2030 for dolutegravir, a component of multiple HIV regimens that generated more than $5 billion in sales last year. The company has 62 drugs in clinical development, 19 of which are in late-stage testing, and plans to initiate over 20 Phase 3 trials this year.

Bristol Myers Squibb's dividend is supported by its financials, with a quarterly dividend totaling $2.52 per share for the year and analyst estimates of $6.34 per share in earnings this year, covering the dividend 2.5 times over. The company generated $5.83 per share in free cash flow over the past year, covering the dividend more than twice over. However, patents for Eliquis and Opdivo could both face generic competition by 2028.

The patent cliff has fueled a surge in biopharma dealmaking, with 2026 deal values expected to exceed $250 billion, the highest since 2019. GSK has spent nearly $11 billion on cancer drugmaker Nuvalent and another $2.2 billion on immune drug developer Rapt Therapeutics, and paid Boston Pharmaceuticals $1.2 billion upfront for a liver disease treatment in advanced testing.