Loss of exclusivity (LOE)

What does Loss of exclusivity (LOE) mean?

Loss of exclusivity is the point when a branded medicine loses its patent protection and any regulatory exclusivity, so generic or biosimilar competitors can enter. For simple chemical (small-molecule) drugs, sales often fall steeply within a year or two as cheap generics take over; for biologics, the fall from biosimilars is usually slower. Example: a drug selling 5 billion a year might keep only about 1 billion two years after generics arrive, if copies take most of the volume at much lower prices. A wave of upcoming LOEs is called a patent cliff, and it drives much of large pharma companies' dealmaking, because they must replace the lost sales.