Global credit rating agency Moody’s has predicted a negative outlook for the pharmaceutical industry as a number of patents are due to expire, increasing pressure on large drug companies.

Moody’s believes that, despite several recent high-profile successes and other products awaiting approval, the overall quality of late-stage pipelines remains “mediocre”.

Moody’s Coporate Finance Group vice-president and senior analyst Marie Fischer-Sabatie said, “Moody’s expects earnings growth to continue to slow in 2011 for most of the industry’s major players as they come up against the patent cliff.

“Downward pressure on earnings is likely to increase in 2012, when the impact of many other patent expirations will be more heavily felt, which could result in pressure on some ratings and/or outlooks,” added Fischer-Sabatie.

Moody’s expects global drug-pricing pressures to persist and intensify in Europe, particularly in countries with large budget deficits.

But the agency has a positive outlook for generics-focused companies who are expected to benefit from many of the negative trends affecting branded drugs.