The patent cliff

In the last weeks we have barely survived the fiscal cliff and now a new cliff is heading to us: the patent cliff.

In the language of experts the patent cliff means the approaching expiration of patents on key pharmaceuticals of big pharmaceuticals. And when the patent has expired, a murderous competition begins as competitors introduce cheap copies. This competition diminishes the margins of large pharmaceutical companies and therefore the profits.

Since the innovation of pharmaceutical companies is behind schedule there is a tendency for pharmaceutical companies to take over biotech companies. Biotech companies, who are quite innovative, develop “biological” technologies, for example in the field of genetic engineering and cell and texture technologies. According to these experts, biotech is the future.

And pharmaceutical companies obviously agree as technologies such as the use of human antibodies can be protected by patents and this allow the companies a new period of making profits.

Arnaud Bos

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