"Despite expiring patents on blockbuster drugs and a wave of new regulation from the Affordable Care Act that will cost drug makers, the pharmaceutical industry will reap between “$10 billion and $35 billion in additional profits over the next decade,” a new analysis shows.
The health law, which will bring millions of uninsured Americans health benefits beginning in January 2014, will be a critical boon to pharmaceutical industry balance sheets, increasing revenue by one-third by the end of the decade, according to a new report from research and consulting firm GlobalData of London. That means the U.S. pharmaceutical industry’s market value will mushroom by 33 percent to $476 billion in 2020 from $359 billion last year.
The increase in sales and profits comes amid a wave of expiring patents on some of the industry’s most popular brand name drugs such as Lipitor from Pfizer PFE -0.60% (PFE), the blood thinner Plavix sold by Bristol-Myers Squibb BMY -0.45% (BMY), the diabetes drug Actos from Eli Lilly (LLY) and Takeda Pharmaceuticals as well as various cholesterol treatments sold by Abbott Laboratories ABT +0.93% (ABT) and its recently spun off proprietary business AbbVie ABBV +0.39% (ABBV). In large part because of competition from cheaper generic drugs, a report last year from IMS Health, for example, said pharmaceutical manufacturers will see “minimal growth in their branded products through 2016.”