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We know of patents and benefits it can incur to the company which has it and has been able make it commercially viable. Treated as a normal commercial issue, besides the R&D part of it and its discovery. There is a sector which is heavily dependent on it, and the life of the patent is of extreme critical value. Given the backdrop of the recent proven breakthroughs in AI, things might change considerably for the better in this area. We are talking of the pharmaceutical industry and the likely possibility of it impacting global health proactively. But for now, one element which nags this industry is Patent Cliff.

Given the fact that drugs deal with human life, the regulatory requirement are quite complex and intense across the world. One or two wonder drugs going through the process and it is a windfall for the company. There is another spin in the game, that is Patent Cliff. It means “the potential sharp decline in revenues upon patent expiry of one or more leading products of a firm.” The revenues “fall off the cliff.” How does this happen? When one or more products go off patent, these products can be replicated as generic drugs and can be sold at as good as throw away prices by the competitors.

US has a new patent life in this field at 20 years, from the day patient has been filed. The cost of developing a drug is both costly and time consuming, most of it being the research and development expense. The woes don’t end here. Getting the drug approved at the end of research process is an expensive and a lengthy process. Number of drugs don’t cross the lab stage itself and there are also ones which are not approved by the Food & Drug Administration. Profit margins look impressive for any single brand name drug, but with the cost of research and developed and failed drugs factored in, it looks less profiteering.

Biggest pharmaceutical companies like Pfizer and GlaxoSmithKline tend to lose billions in the revenues and profits from the post patent expiration of their blockbuster drugs. Generic drugs also need to sustain for the yeoman service it can provide to the poor patients. But the research and development also need to sustain the interest of humanity. Patent Cliff will remain, where it stands and for valid reasons. The untying of a knot in the drug lifecycle has the potential to create a New Drug Regime, that is to shorten the time for drug discovery. Easier said than, but today for the first time we can see this possibility with AI facilitating in a big way with few researches in this field giving very promising results.

Sanjay Sahay

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