Loss of patent exclusivity leads brands to seek new blockbusters and law firms to find clients

Eight of the world's top ten selling brand-name medicines, with combined annual revenues of €32bn will lose their patented status during the next five years. Unsurprisingly, manufacturers of generic equivalents are looking to produce their own versions of blockbuster drugs like Lipitor (Pfizer's anti-cholesterol product), Zyprexa (Eli Lilly's treatment for schizophrenia), Seretide (GlaxoSmithKline's asthma control) and Diovan (Novartis' high-blood pressure treatment). What happens globally inevitably impacts Iberia.

To combat the loss of patents and harmonise the costs of new product research and development, the brand pharmaceutical giants have engaged in a wave of mergers, the latest being Pfizer with Wyeth, Merck and Schering-Plough, Roche and Genentech and Eli Lilly with ImClone. While these mega-deals boosted work for international M&A lawyers, the downside has been that IP lawyers, especially in Iberia, have seen their client portfolio shrink. In addition the new combined pharmaceutical giants are using their greater corporate weight to bear down on lawyers' fees. Pfizer has announced that the 19 firms on its legal panel will be paid a flat monthly fee with a discretionary annual bonus for additional performance.

Iberian-owned brand pharmaceuticals rarely merge or get involved in acquisitions of rivals so the indigenous client pool remains largely static, say lawyers. While their number is not great, a number have promising products in clinical trials and are already focusing on patent protection and commercialisation strategies.Almirall will this year launch Eklira, a treatment for chronically obstructed lungs. Rival Laboratorios Rovi is completing clinical trials of its Bemiparin medicine to treat venous thromboembolisms, while other Iberian laboratories developing innovative treatments include Cellerix, Esteve, Zeltia and its subsidiary Noscira.

Such products should provide new opportunities for some of the Iberian IP lawyers who lost out when their international clients merged. But specialists know that generics manufacturers, with a market share in Iberia of around 17%, will push patent laws to the limit. Good news for boutiques like Catalonia's Amat i Vidal- Quadras and Portugal's Rui Pena Arnault that have become leading advisers to generics companies. Additionally, law firms previously advising brand pharmaceutical companies will not want to find themselves conflicted by advising their generics counterparts.

However the real long term threat to branded pharmaceutical IP lawyers’ practices comes from the EC, suggest some. At a Competitiveness Council meeting last December, EU Ministers agreed that Member States should continue working towards a supranational European patent system. This would mean a revision of the current European Patent Convention as well as drawing on the recently signed Lisbon Treaty to cover translation arrangements for the new EU patent. However, to the relief of some IP lawyers, no decision was taken as to when the new system would become operational.