How to make money from copycat drugs

The patents protecting several of today's big drug brands are about to expire, clearing the way for substitutes that could cost from 30% to 80% less. Big Pharma is set to suffer - but the future's bright for generic firms.

Growing old isn't what it used to be. Where once old age meant nursing homes and days in the park, a new generation of yuppy' pensioners are staving off decline with a cocktail of prescription drugs. Over the past 20 years, drugs such as impotence treatment Viagra and anti-cholesterol drug Lipitor have become regular fixtures in the average medicine cabinet.

But as the baby-boomer generation moves into old age, the labels on their pills will look very different, even though the drugs will be much the same. That's because the patents protecting several of today's big drug brands are about to expire, clearing the way for generic substitutes that could cost from 30% to 80% cheaper. "Over the next five years, analysts forecast a golden era for generic drugs, as patents begin to run out on brand-name medications with more than $60bn in combined annual sales," says Stephanie Saul in the New York Times.

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Eoin came to MoneyWeek in 2006 having graduated with a MLitt in economics from Trinity College, Dublin. He taught economic history for two years at Trinity, while researching a thesis on how herd behaviour destroys financial markets.