Pharma industry could use a shot in the arm, says Fitch; FT views bribery settlements

2012 will be a critical year for the pharmaceutical industry, as drugmakers struggle with record patent expirations, disappointing results of expensive clinical trials and ongoing regulatory challenges against an already challenging economic backdrop, observes Fitch Ratings.

The global rating agency says that large pharmaceutical companies remain pressured and some are bracing themselves for a steep drop off the patent cliff, commenting: 'We believe the loss of patent exclusivity on blockbuster drugs will continue to spur increasing competitive pressure as generic versions of branded medications hit the market. We note that more than $70 billion of branded drug revenues (based on 2010 sales) will lose or have already lost patent protection from the second half 2011 to the end of 2015.'

A reduction in workforce has been a common response to cutting costs. Swiss drugmaker Novartis recently slashed 1,960 jobs in the USA (1,600 were sales positions). The company previously announced 3,400 job cuts in late 2010 and 2011 (The Pharma Letters passim).