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At this point in the pharmaceutical game, generic drugs can’t really be considered the underdog. Today, nearly 8 in 10 prescriptions filled in this country are generics, with those transactions often saving consumers as much as 80 percent off the price of brand-name drugs.¹

Generics on tails of big pharma
It’s no surprise then that the world’s major pharmaceutical companies are continually feeling the heat of omnipresent generic competition.

Just last week, for example, a federal judge refused a request by British drug giant AstraZeneca (NYSE:AZN) to ban generic versions of its best-selling medicine, the cholesterol drug Crestor, from the U.S. market.² The ruling means open season on a drug that generated more than $5 billion in global sales last year – about one-fifth of AstraZeneca’s revenue. According to analyst estimates compiled by Bloomberg, sales of Crestor are likely to crater 30 percent to $3.5 billion this year as cheaper drugs become available.

But falling revenue from its top-selling drug is just the latest blow for AstraZeneca, which has already seen its overall sales fall as patents have expired on some of its other leading medicines. The company’s chief executive warned this year that profit and sales would continue to drop, partly because of Crestor.

On the other hand, the federal court ruling was good news for generic companies, eight of which had already had its applications for generic versions for Crestor approved by the Food and Drug Administration, including Mylan(NASDAQ:MYL) and Teva Pharmaceutical (NYSE:TEVA). The stocks of those two companies represent a nearly 16 percent weighting in the Drug-Patent Cliffs motif, which has risen 11.7 percent in the past month. Over that same time, the S&P 500 has increased 4.3 percent.

Over the last 12 months, the motif has fallen 18 percent; the S&P 500 has gained 2.8 percent.

One copycat version of Crestor, from Allergan‘s (NYSE:AGN) Watson Pharmaceuticals division, has already hit the market following a patent infringement suit settlement that gave the company exclusive rights to start selling its version in early May, more than two months before exclusivity ended on July 8.