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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