Patent cliff
The steep drop in revenue when a drug's patents expire and generic competition launches.
Definition
A patent cliff is the sharp revenue decline a branded drug experiences when its primary composition-of-matter patents expire and generic equivalents enter the market. Generic launch typically erodes 80–90% of branded revenue within 12 months. Major historical patent cliffs include Lipitor (Pfizer, 2011), Plavix (BMS, 2012), and Humira (AbbVie, 2023).
See also
- Generic drug — A bioequivalent copy of a small-molecule drug after its patent and exclusivity expire.
- Paragraph IV — A generic manufacturer's certification that a brand drug's patents are invalid or not infringed.