Pfizer, Eli Lilly Report Sharp Profit Declines due to Drug Patent Expiries
Pfizer Inc. and Eli Lilly & Co., two of the world’s largest pharmaceutical corporations, reported sharp profit declines of 50% and 27% respectively for their 2011 fourth-quarter results.
Both companies attributed the squeeze in earnings to exposure of their best-selling drugs to competition from cheaper generic alternatives following expiration of the relevant US patents. In Pfizer’s case, it relates to the expiry of patent for Lipitor, a cholesterol-lowering pill, and for Eli Lilly, it concerns the anti-psychotic drug Zyprexa and the cancer treatment drug Gemzar.
In response to the challenges, the companies are fighting to retain their competitive strength and market share by revising their patent strategies and accelerating R&D work on new drugs.
