Many pharma companies entered 2012 preparing for, or adapting to, loss of exclusivity (LoE) for successful mature products. Although losing patent protection for a marketed drug typically results in a significant loss of market share and revenue, strategies exist to help make the transition less painful.
The loss of Intellectual Property (IP) protection is a major (and inevitable) milestone in the life cycle of any branded drug product. A life cycle maximization strategy ensures that as many patents as possible are taken out to protect the product from copycat versions in key markets. Securing this IP protection is vital to safeguard the sizeable investment needed to bring any NCE or NBE through clinical development to market. Timing is important: file too early in the R&D process and you will reduce the time that a product will be protected if the drug is later approved and marketed; file too late and a competitor may lay claim to the same invention first...
Just as a diversified pipeline containing products for discrete indications can reduce overall commercial risk, having drugs for which the product LoE occurs in different years will ensure that the scenario of losing protection for several products simultaneously is avoided. At industry level, the dreaded “patent cliff” is a major concern as many current blockbusters are nearing the end of LoE while the hurdles for new drugs to reach the market are getting tougher, so there is a shortage of approved next generation “new and improved” medicines which can compete against generic replacements for the outgoing blockbusters and protect against the loss of revenues that LoE brings.
Pre-emptive preparation for LoE – what are the options?
When developing your brand plan and strategy, several potential approaches exist to delay and/or minimize revenue loss associated with patent expiry. Not all of these will be suitable for every product, so consult the appropriate internal teams and experts with objective and independent external perspectives when evaluating the options to help you get the most from the brand, while ensuring alignment with your company’s overall commercial strategies.
- Divest - cutting all promotional and research expenses for the product whose patent has expired allows a company to reallocate resources to other drugs in the portfolio/pipeline or to in-license new drug candidates. This can avoid having to compete in a crowded generics market and keep the company focused on core priorities for its other branded prescription-only medicines
- Authorize - this increasingly popular option involves the original manufacturer licensing exact copies of its branded drug to a generic manufacturer (or its own subsidiary which specializes in generics), allowing it to hang on to some of the generic revenues. Because the licensed generic is marketed under the existing brand, this strategy can harness brand loyalty. The authorized generic may also command a premium price versus a non-licensed version of the same medicine marketed as new brands (which will have low recognition among prescribers). In the US, this approach also allows companies to market their own authorized generic within the 180 days of marketing exclusivity normally reserved for the first approved generic competitor under the Waxman-Hatch Act of 1984
- Innovate - advances in the formulation, route of administration, dosage strength or conditions of use may be patentable and allow extension of IP protection. Companies can also combine an out-of-patent drug with one of their patent-protected drugs to offer a fixed dose combination which will be exclusively available from that company
- Extend - gaining approval for use in a new indication can expand the target market and provide additional patent-protected market exclusivity. In certain cases, it may be possible to re-launch a drug under a different brand name for a novel indication. These strategies allow the company to enter new markets while capitalizing on existing experience with the drug gained from the initially approved indication(s)
- Re-price - generic manufacturers avoid the substantial R&D costs and lengthy clinical trial programs needed for the original developer to gain marketing approval. In addition, their marketing costs are kept low, so that their key selling point is price, i.e. a medicine with proven benefits, now available at a lower price. Reducing the price of a brand name product will help bridge the gap between the generic competition, whilst supporting brand loyalty from customers who are familiar with the branded version. This option may be particularly useful for biosimilars, where the complex manufacturing processes mean that generics may be priced at a 20–25% reduction to the reference product rather than the more substantial price reductions applicable for small molecule drugs. If the original manufacturer reduces its pricing by a similar extent, this may deter competitors from risking the costly manufacture start-up costs needed to launch a biosimilar as prescribers may prefer to stick with the “tried and trusted” brand if there is negligible cost benefit from switching to a biosimilar
- Investigate - in both Europe and the US, 6 months of additional marketing exclusivity can be obtained for products for which pediatric information has been added to labeling based on studies
- Differentiate - companies may also innovate by introducing added-value services for patients prescribed a drug, for example medical helplines, improved medical devices/delivery systems, home delivery and sharps disposal. Ensure your value proposition is clearly understood and focuses on patient benefits, not just science
Here to help, a partner who recognizes the opportunities for building and maintaining brand loyalty
PHASE II has worked with products at every stage of the life cycle. With over 20 years’ experience, we can help you understand the most appropriate options for your product in your market(s), and support you in planning and implementing these successfully to maximize the commercial return for your company. We are experienced in finding solutions that dovetail with other products in your portfolio and ensuring that overall strategic goals are achieved.
Our work includes developing culturally sensitive promotional campaigns for older products in emerging markets, providing launch support for reformulated products in European markets, and harnessing long-term clinical experience with mid-cycle products to develop cost-effectiveness and value demonstration resources to maintain customers in the face of cheaper, newer competition.
