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1 Emerging-Market Threat to Big Pharma

By Max Macaluso – Updated Apr 7, 2017 at 1:13PM

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The biggest players in the pharmaceutical space, including stalwarts Pfizer, Merck, and Bristol-Myers Squibb, are facing headwinds from the patent cliff. Pfizer's blockbuster drug, Lipitor, lost patent protection last year, and year-over-year sales of the drug were more than halved last quarter by generic competition. Patents for Merck's asthma drug Singulair and Bristol-Myers Squibb's blood thinner Plavix also recently expired. These companies are searching for fresh revenue streams that can quickly boost sales.

In addition to the development of new drugs, many pharmaceutical companies are targeting revenue growth from patients in emerging markets. However, litigation between German drugmaker Bayer and the Indian government suggests that these markets may become increasingly difficult to enter.

Bayer isn't alone. Biotech company Gilead is also trying to protect its intellectual property for an HIV drug in India, and industry giant Novartis is spending time in Indian courts trying to uphold its patent for oncology therapeutic Glivec.

In the following video, analysts Brenton Flynn and Max Macaluso discuss the woes of the drug industry and the international patent issues that you need to think about before investing in this sector.

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Brenton Flynn has no positions in the stocks mentioned above. Max Macaluso has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple and McDonald's. Motley Fool newsletter services recommend Apple, Gilead Sciences, McDonald's, and Novartis. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Stocks Mentioned

Pfizer Stock Quote
$49.50 (-2.42%) $-1.23
Bristol-Myers Squibb Stock Quote
Bristol-Myers Squibb
$79.58 (-1.39%) $-1.12
Novartis Stock Quote
$90.61 (-0.39%) $0.35
Merck Stock Quote
$108.63 (-1.25%) $-1.38
Gilead Sciences Stock Quote
Gilead Sciences
$87.56 (-0.48%) $0.42

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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