Protecting patents after they expire

The day after our on-site visit to one of Pfizer's plants in County Cork, Ireland, the US drug maker announced that it would cut 177 jobs there. The company said the cuts were in response to a fall in demand for some of its medicine and the need to cut costs. A study of Pfizer Ireland's business shows the primary reason for the cuts is that the patent covering Lipitor, the biggest-selling prescription drug in the history of pharmaceuticals, has expired and the active pharmaceutical ingredients (API) of Lipitor are produced in Cork.

It is not just Pfizer. All of the world's largest producers of new drugs and medicines are facing an unprecedented situation as key patents expire and generic drugs swoop in as more affordable alternatives. It is reported that these producers face billions in losses as their patents expire in the US. Although China is a fairly small market compared with the US, the situation here could be even worse as many local Chinese pharmaceutical companies are now counting down to these expiry dates. But it is possible for pharmaceutical companies to survive this challenge in China, particularly if they make the most of the different layers of IP protection available.