A generic drug maker has announced the availability of a treatment of the signs and...

The last few weeks have seen a lot of acquisition activity among large pharmaceutical companies....

The situation is like having plans to bake a loaf of bread for dinner, but discovering at 5 p.m. that the flour is running low, and there is little time to go to the supermarket to buy more. Generic drug makers depend on a steady supply of expiring patents coming from large pharmaceutical companies for their business. In recent years, a whole slew of blockbuster drugs have come off patent, allowing generic drug makers to lap up the drug compounds. Over the next several years, however, the supply of expiring patents will begin to run dry. Between this year and 2016, $131 billion worth of drugs will come off patent, followed by a long decline often called the patent cliff. Facing this precipice, generic drug companies will have to adapt as the market becomes increasingly commoditized.