In the world of pharmaceuticals, patents matter. They grant drugmakers exclusive rights to sell a medicine for a defined period, allowing companies to recover massive research and development costs and, in many cases, generate profits to fund future innovation. Once those patents expire, however, the competitive landscape shifts dramatically as cheaper generic or biosimilar versions can enter the market, often leading to steep price reductions and sharply reduced revenue for the original brand.
This steep decline in revenue, known as a patent cliff, is a familiar feature of the industry’s business cycle. However, 2026 marks the start of a particularly pronounced cliff, with key patents on billion-dollar drugs set to expire. The US market alone is projected to lose more than $230 billion in revenue between 2025 and 2030.
Among the most exposed are Merck and Pfizer, whose portfolios include several blockbuster small-molecule drugs reaching loss of exclusivity, including Merck’s diabetes treatments Januvia and Janumet, as well as Pfizer’s autoimmune therapy Xeljanz. According to DrugPatentWatch, these products generated more than $5 billion in annual sales, making them prime targets for generic manufacturers and a focal point for payer-driven cost containment once exclusivity ends.
As 2026 continues, the industry is entering a period in which strategic execution — from lifecycle management and pipeline productivity to acquisitions and partnerships — will be critical in determining which companies can successfully navigate the cliff and which will struggle to regain their footing.
The wave of blockbuster drugs facing patent expiry in 2026
A range of major therapeutic areas — including diabetes, cardiovascular disease, immunology, oncology, and pain management — will see widely prescribed drugs lose patent protection in 2026.
Merck’s Januvia
Launched in 2006, Januvia (sitagliptin) was one of the first DPP-4 (dipeptidyl peptidase-4) inhibitors approved for type 2 diabetes. At the time, it offered a differentiated safety and tolerability profile compared with older therapies, helping it achieve blockbuster status. Even as newer drug classes such as GLP-1 (glucagon-like peptide-1) receptor agonists and SGLT2 (sodium-glucose cotransporter 2) inhibitors gained prominence, Januvia has remained widely prescribed, particularly for patients requiring oral therapies.
Merck has reported robust global sales of Januvia, with annual revenue totaling over $2 billion in 2022 and 2023. However, once generic sitagliptin enters the market, that revenue is likely to erode quickly. DPP-4 inhibitors are a crowded and price-sensitive category, and payers are expected to move rapidly to generics once available.
For Merck, the challenge is not unexpected. The company has settled with 25 generic manufacturers, allowing them to launch generic versions of Januvia in May 2026, while Merck has already shifted its strategic focus toward oncology, vaccines, and newer cardiometabolic therapies.
Merck’s Janumet and Janumet XR
Closely tied to Januvia’s fate are Janumet and Janumet XR, Merck’s fixed-dose combinations of sitagliptin and metformin. Combination therapies like these play an important role in diabetes management, simplifying treatment regimens and improving adherence for patients requiring multiple agents.
In 2023, Janumet and its extended-release version generated approximately $1.43 billion in combined sales. Like Januvia, these products face patent expiry that will open the door to generic equivalents, triggering rapid price erosion and a sharp decline in revenue.
Combination products often enjoy a slightly different competitive dynamic compared with single-agent drugs. While both sitagliptin and metformin are already available separately — metformin has been generic for decades — branded combinations can retain some prescriber loyalty due to convenience. However, once generic fixed-dose combinations become available, payers are likely to encourage switching aggressively.
Pfizer’s Xeljanz
Xeljanz was the first Janus kinase (JAK) inhibitor approved for rheumatoid arthritis, later expanding into psoriatic arthritis and ulcerative colitis. Its oral administration distinguished it from injectable biologics and helped drive adoption in immune-mediated inflammatory diseases.
In 2024, Xeljanz generated $1.1 billion in sales, down from earlier peaks but still substantial. Unlike diabetes therapies, however, the competitive landscape for Xeljanz is shaped not only by generics, but by safety concerns and class-wide regulatory scrutiny. In recent years, JAK inhibitors have faced warnings related to cardiovascular risk and malignancy, dampening growth across the class.
Even so, generic tofacitinib is expected to appeal strongly to payers. As a small molecule, Xeljanz is far more straightforward to replicate than monoclonal antibodies used in similar indications. This raises the prospect of rapid substitution, particularly in healthcare systems under cost pressure.
Bristol Myers Squibb and Pfizer’s Eliquis
Co-marketed by Bristol Myers Squibb (BMS) and Pfizer, Eliquis has been one of the world’s top-selling anticoagulants, widely prescribed to reduce the risk of stroke and blood clots in patients with atrial fibrillation and other cardiovascular conditions.
As a high-volume oral small molecule, Eliquis is structurally exposed to rapid, multi-generic competition once exclusivity ends — particularly in healthcare systems where substitution is straightforward and reimbursement incentives favor lower-cost alternatives.
For BMS, the stakes are particularly high. Eliquis, together with the company’s immuno-oncology flagship drugs Opdivo, accounts for roughly half of BMS’s total earnings. As both drugs approach the end of their exclusivity, the company faces what analysts describe as the largest growth gap among its large-cap pharmaceutical peers, estimated at approximately $38 billion in future at-risk revenue.
A broader industry reckoning
BMS is not alone in confronting a looming revenue shortfall. Merck and Pfizer are also facing mounting pressure as multiple blockbuster products approach patent expiry. For Merck, the challenge extends well beyond its diabetes portfolio. While the loss of exclusivity for Januvia and Janumet in 2026 represents a meaningful headwind, the company is also preparing for a far larger disruption in 2028 as Keytruda, currently the best-selling drug in the world, is expected to lose patent protection.
As Eliquis, Januvia, Janumet, and Xeljanz move closer to generic competition, the divergence between pharmaceutical companies with deep, diversified pipelines and those with concentrated revenue bases is becoming more pronounced. The 2026 patent cliff is therefore not just a story about expiring drugs, but about how resilient business models are when exclusivity ends.
