It’s empirically disproven. Companies have diversified their investments after previous patent cliffs.

What business strategies have pharmaceutical companies employed to revitalize their growth following the patent cliff? This question has been answered and supported by the research presented throughout the thesis. Among biopharmaceutical companies, Biogen, Novartis, and Sanofi used a mixture of business strategy tools to revitalize their growth following the patent cliff. Biogen’s efforts were primarily concentrated on academic collaborations and R&D investment, Novartis’s around R&D, mergers and acquisitions, and emerging markets, and Sanofi’s around mergers and acquisitions, R&D, and emerging markets. This resulted in varying degrees of success, evidenced by the upward trend in net income of the companies, and will take some time to fully be realized as revenue generated from employing these tools adds to the overall strength of the companies, considering all of the other variables that may affect net income over time. Some of these tools may be easier than others to implement, but the success of these companies suggests that using more than one tool at a time can contribute to good health in the evolving biopharmaceutical landscape. To remain competitive, biopharmaceutical companies should internally develop aggressive strategies for clinical development and marketing potential for each of their products and portfolios so they can be proactive rather than reactive in taking steps to stabilize their net incomes. If a biopharmaceutical company was to do nothing to proactively stabilize their net income, a patent cliff could set them up to lose a significant portion of revenue in a short time, becoming a target for acquisition. This lends companies to employ the tool of mergers and acquisitions to bolster their own revenues and fortify their pipelines. If the company promoted themselves to be partially acquired, this could result in their earning additional cash to employ another one of the tools, investing in R&D, to stay in business with a portfolio to better suit their needs.

Thus far, this research shows the various reactions of pharmaceutical companies to the revenue lost to the patent cliff as well as highlighting some proactive measures that could be taken to avoid these situations in the future. With these strategies, if another patent cliff did occur, companies may see less revenue loss or a shorter period of plateau in net income. Companies seem to have learned to invest in R&D of novel next generation products, valuable partnerships with other companies and academic research facilities, and take stake in emerging markets as part of their plans to guarantee long term profitability across products and therapeutic specialties. It is essential for biopharmaceutical companies to understand the historical lesson that revenue loss due to patent expiry was concentrated in mainstream treatments. In the future, a patent cliff could repeat itself by impacting a franchise of contemporary blockbuster drugs concentrated around a specific disease state such as MS. Therefore, it is advisable for biopharmaceutical companies to incrementally invest in R&D of a diversified pipeline for sustainability.