Companies do not renew Xeljanz generic licenses

29 out of 75 approved products have expired

Only 14 products listed for reimbursement… the fallout of “blind approvals”

Pfizer’s rheumatoid arthritis drug Xeljanz Tab

Despite the five year await for Xeljanz’s patent expiry, an increasing number of companies are abandoning sales of the generic versions of their rheumatoid arthritis treatment ‘Xeljanz.’

This is largely attributed to drastic changes in the competitive landscape compared to the time of development. Some in the industry point to the negative consequences of so-called “blind approvals,” where companies follow competitors without question.

According to the Ministry of Food and Drug Safety (MFDS) on the 14th, the license for Youngil Pharm’s Youngil Tofacitinib Tab 5 mg (tofacitinib aspartate) expired on the 14th and was removed from the product registry. This marks the 29th tofacitinib product to expire without renewal.

By March, an additional six products are scheduled to expire, suggesting that more companies may forgo renewal.

Of the 45 products that remain approved, only 14 have been listed for reimbursement.

This situation reflects how the market environment changed dramatically during the 5-year wait for the original product’s substance patent expiry.

Generic manufacturers attempted to bypass the extended substance patent by developing salt variants. Had this strategy succeeded, launch would have been possible after November 23, 2020, instead of waiting until the original substance patent expired on November 23, 2025.

However, after legal disputes, the Supreme Court ruled in favor of the originator, Pfizer. The latecomers who received approval in 2020 had to wait until the substance patent expiry date of November 23, 2025.

As a result, companies spent five years unable to launch, merely waiting for patent expiry. When the patent finally expired in November last year, several companies launched their products.

However, the market had changed substantially compared to five years earlier. While Xeljanz became a blockbuster product generating sales in the KRW 10 billion range due to expanded reimbursement, its growth faced limitations as strong competitors emerged.

New JAK inhibitors like Lilly's Olumiant and AbbVie's Rinvoq have entered the market since then. According to 2024 UBIST outpatient prescription data, Xeljanz recorded KRW 14.3 billion, Olumiant KRW 17.1 billion, and Rinvoq KRW 26.1 billion, showing Olumiant and Rinvoq surpassed Xeljanz in terms of sales.

Furthermore, to counter latecomers, Pfizer released a more convenient extended-release formulation for Xeljanz, making it even harder for competitors to challenge it. The extended-release formulation, Xeljanz XR Tab 11mg, also holds a patent valid until March 12, 2035.

As a result, more generic manufacturers are choosing not to renew their approvals despite the original drug’s substance patent expiry.

Some point out that this incident highlights one of the drawbacks of the ‘blind approval’ system for latecomers. Many domestic pharmaceutical companies operating primarily in generics tend to develop products simply in line with the original drug’s patent expirations.

Moreover, under Korea’s patent-linkage system, the first generic applicants that successfully bypass patents are granted nine months of market exclusivity. This has triggered a rush of follow-the-leader development, where competitors simply follow suit once a rival starts developing a generic.

An industry executive commented, “In the case of some Xeljanz generics, the market has certainly changed, but fundamentally, the problem lies in companies blindly following competitors instead of pursuing independent business strategies, which has now backfired.”