Pharma confronts the 21st century: Generic competition, compulsory licensing, and drug access and safety challenges from abroad

The worldwide pharmaceutical market is undergoing very profound adjustments across the turn of this century and beyond, apparent even before the current global financial crisis. Multinational drug firms, which have dominated the production of Western pharmaceuticals for the past three decades, are now facing formidable new challenges. Their research and development has not been well sustained with breakthrough entities, and scores of branded drugs have been losing patent protection; many of these drugs were considered “blockbusters” in that their sales tallied in the billions. Without patents, the rise of the generic drug industry (chiefly based outside the Northern Hemisphere) represents a major shift in revenues and easy profits. Moreover, the upgrading in technological capability and manufacturing scope of various firms from Israel, India, China, Brazil, South Africa, and elsewhere allows these nations to better address the mounting unmet pharmaceutical needs across the developing world that firms in the US and Europe have historically neglected. Additionally,'s use of compulsory licensing on a stream of brand drugs may represent a shift to open access to much needed advanced therapeutics for increasingly prevalent chronic diseases across the developing world.  Further, specific challenges in trade policy (namely, national price setting) are directed at multinational drug firms, which, along with concerted actions to address access and drug safety, may delimit Western multinationals' previous power to shape the marketplace.  While Western manufacturers remain cash-rich, analysts predict a merger and acquisition trend, which has already been indentified within both brand and generic players.  This paper will explore these ongoing dynamics and some of their implications for public health.