Over the next few years, generic competition is likely to significantly reshape the U.S. and international markets for the impotence drugs known as PDE5 inhibitors. This family of drugs, used to treat erection problems linked to insufficient blood flow, includes Cialis, Viagra, Levitra, Staxyn, and Stendra.
Some of these changes are already being seen in a number of markets outside the United States where Pfizer’s patent for Viagra, the first of these medications to hit the market, has expired. Such markets include much of the European Union, China, and Canada.

Generics Arrive as Patents Expire

With Pfizer’s patent on the little blue pill having expired in those markets, generic formulations of sildenafil citrate, Viagra’s active ingredient, have become available at much lower prices than those for which the brand-name drug was previously sold.
This added competition affects not only Viagra but also its brand-name competitors, such as Cialis. The availability of less expensive generic alternatives to any of these medications is almost certain to lure many customers away from the brand-name drug of their choice.

Drugs Function Similarly

After all, the drugs in this category work very much the same way, although each has its own unique chemical structure. Many men get satisfactory results from all of these drugs and may have settled on a particular brand pretty much by chance. For such customers, the switch to a cheaper alternative is a no-brainer.
Even for customers who selected a particular PDE5 inhibitor because it worked faster, lasted longer, or had fewer side effects, the availability of a less expensive alternative could be enough to get them to switch.
To prepare for this coming period of increased competition — much of it from generics — Eli Lilly & Company, the patent-holder for Cialis, has taken steps to protect its interests and hang on to whatever profits it can extract from its Cialis franchise.

Lilly Strikes Deal with Sanofi

In May 2014, Lilly announced a licensing agreement with Sanofi S.A., the French-based pharmaceuticals giant. Under the terms of that accord, Sanofi would sell an over-the-counter formulation of Cialis in the United States, Europe, Canada, and Australia after certain patents expire. Obviously, Sanofi will need to obtain authority from the relevant regulatory agencies in each country before an OTC version of Cialis can be marketed.
Lilly Research Laboratories in Indianapolis was the site of some of the work that went into the development of Cialis. 

Lilly Research Laboratories in Indianapolis was the site of some of the work that went into the development of Cialis.

If such approvals can be obtained, and that is by no means certain, Lilly’s agreement with Sanofi would allow the U.S. drugmaker to continue profiting from its interests in Cialis through the licensing fees it would receive from Sanofi.

Lilly’s gambit with the Sanofi licensing deal is not the first such move by the manufacturers of PDE5 inhibitors to take one of their drugs off prescription. However, if it goes through, it will be the first one to find success. In November 2008, Pfizer withdrew an application to switch Viagra from a prescription to a non-prescription drug in the European Union. It did so in response to some misgivings expressed by the regulatory authority that governs the sale of all medications within the European Union.

Pfizer Hedging Its Bets

Ironically, Pfizer’s U.S. patent for Viagra doesn’t expire until April 2020, despite the fact that the little blue pill was the first of this new wave of impotence drugs to hit the market, arriving on U.S. pharmacy shelves in 1998. But Pfizer, like Lilly, is hedging its bets in an effort to continue to profit from Viagra for as long as possible.