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Benchmarking Best Practice at Patent Expiry in the US - Maximizing Return on Investment of Late-Stage Lifecycle Management
Market Report, December 2004, 6080  €


Description

IntroductionSuccessfully managing the lifecycle of molecules within marketed portfolios is an essential capability for the pharma industry.
With R&D productivity stalling, and profit margins increasingly eroded by cost containment initiatives, maximizing the return on investment of in-line brands, by extending the time on the market without generic competition, is a key objective for pharmaceutical companies.ScopeAnalysis of Datamonitor's Patent Expiry Database of 45 patent expiries in the US marketPrimary research with US hospital and retail pharmacistsRecommendations for market-specific best practice strategies at patent expiry, based on case studies and future focused environmental assessmentAnalysis of the capabilities of circa.
30 generics players operating in the US marketHighlightsWith the closure of the multiple 30-month stay loophole of the US generic approval process, new regulatory tactics are expected to emerge.
For example, branded companies may deter generics from entering the market by failing to sue for patent infringement, thereby reserving the right to file suit once the generic has reached the market.The price of oral brands tends to be maintained post patent-expiry.
It is likely that there is no benefit in operating a ``maximize volume sales`` strategy against US commodity generics, as the presence of low cost manufacturers means generic competitors can squeeze prices further than the originator can.As other avenues become closed to branded manufacturers, companies are increasingly implementing a licensed-generic strategy, with 12 such deals occurring in 2004 prior to December, up from nine in 2003 and seven between 1993 and 2002.Reasons to PurchaseIdentify the optimal late stage lifecycle management strategy for your brandIdentify the key stakeholders to target to secure success of your chosen brand protection strategyPredict the impact of patent expiry on a brand, assisting with brand business planning or generic target identification

Sommaire
 
TABLE OF CONTENTS
 
STUDY SCOPE AND AIMS 3
 
Study components 3
 
CHAPTER 1 ASSESSING THE IMPACT OF PATENT EXPIRY 9
 
The importance of planning for patent expiry 9
 
The operating environment: cost containment, customers and competitors 10
 
Product specific characteristics 13
 
Brand defense strategies: four underlying strategic options 15
 
Assessing the impact of patent expiry: typical generic erosion curves 17
 
Methodology – Datamonitor’s Patent Expiry Database 17
 
CHAPTER 2 OPERATING ENVIRONMENT: COST CONTAINMENT, CUSTOMERS AND COMPETITORS 26
 
Key findings 26
 
Understanding the local operating environment 27
 
Regulatory environment 28
 
US regulatory and legislative reforms 32
 
Cost containment 37
 
Stakeholder influence 48
 
Generics company capabilities 55
 
CHAPTER 3 INFLUENCE OF PRODUCT AND MARKET SPECIFIC CHARACTERISTICS AT PATENT EXPIRY 57
 
Key findings 57
 
Predicting the impact of patent expiry: guidance from product and market specific characteristics 58
 
Product specific characteristics: patient is most effective target for promotion of brand-specific features 62
 
Market specific characteristics: US patent challenge system creates opportunity for successful own-generic strategy 64
 
CHAPTER 4 STRATEGIC OPTIONS FOR A BRAND AT PATENT EXPIRY: A CASE STUDY ANALYSIS 79
 
Key findings 79
 
Introduction 80
 
Strategy selection: an interplay of product, company and market guided factors 80
 
Regulatory strategy and legal defense 85
 
Reformulation 87
 
Launch of second generation product 88
 
Develop (and patent) new indication 89
 
Rx to OTC switch 90
 
Maximize brand loyalty through sales and marketing 91
 
Strategic pricing 91
 
Launch own generic 93
 
Launch of licensed/ friendly generic 93
 
Divest the product 94
 
CHAPTER 5 APPENDIX 96
 
References 96
 

 
LIST OF FIGURES
 
Figure 1: Three key factors determining the impact of patent expiry 10
 
Figure 2: Stakeholder balance of power 12
 
Figure 3: Product specific characteristics influencing the impact of generic competition 14
 
Figure 4: Strategic aims of brand protection strategies 15
 
Figure 5: Average number of generics 19
 
Figure 6: Average generic price relative to brand 20
 
Figure 7: Average generic share of volume 21
 
Figure 8: Average generic share of value 22
 
Figure 9: Average brand price relative to 1Q prior to generic entry 23
 
Figure 10: Evolution in molecule sales following generic entry 24
 
Figure 11: Factors determining operating environment 27
 
Figure 12: Predicting time to generic entry in the US 31
 
Figure 13: Source of US total healthcare funding, 2002 37
 
Figure 14: States undertaking new Medicaid cost-containment initiatives, 2002-05 39
 
Figure 15: Cost containment methods used in employer-provided prescription drug coverage 43
 
Figure 16: Targets of effective cost containment strategies 48
 
Figure 17: Money flow in the Pharmaceutical distribution chain 49
 
Figure 18: Generic prescribing in the US is encouraged 50
 
Figure 19: Ranking of stakeholder influence on whether a branded or generic drug is received by the patient in the US 52
 
Figure 20: Ranking of factors influencing pharmacists’ dispensing decisions in the US 53
 
Figure 21: Sales breakdown of major generics companies’ top 20 US products, split by product formulation 55
 
Figure 22: Sales breakdown of major generics companies’ top 20 US products, split by peak sales of originator’s branded product 56
 
Figure 23: Product specific characteristics influencing the impact of generic competition 58
 
Figure 24: Attractiveness to generics varies by therapeutic area 59
 
Figure 25: Impact of product formulation on degree of generic penetration 60
 
Figure 26: Influence of product specific characteristics on generic substitution in the US 62
 
Figure 27: Average number of generics by product formulation 65
 
Figure 28: Average generic price relative to brand by product formulation 66
 
Figure 29: Average brand price relative to 1Q prior to generic entry by product formulation 67
 
Figure 30: Average generic share of volume and value by product formulation 68
 
Figure 31: Average number of generics by market size 69
 
Figure 32: Average generic price relative to brand by market size 70
 
Figure 33: Average generic share of volume and value by market size 71
 
Figure 34: Average brand price relative to 1Q prior to generic entry by market size 72
 
Figure 35: Average number of generics by patent challenge situation 73
 
Figure 36: Average generic price relative to brand by patent challenge situation 75
 
Figure 37: Average generic share of volume and value by patent challenge situation 76
 
Figure 38: Average brand price relative to 1Q prior to generic entry by patent challenge situation 77
 
Figure 39: Influence of number of generics on degree of generic penetration 4Q following launch 78
 
Figure 40: Pharmaceutical brand lifecycle 82
 
Figure 41: Implementation of early phase lifecycle management strategies prolongs time spent in maturity phase 83
 
Figure 42: Implementation of late phase lifecycle management strategies reduces the decline in sales in the post-patent phase 84
 
Figure 43: Factors determining optimal brand protection strategy 85
 

 
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