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Benchmarking Best Practice at Patent Expiry in the US

Maximizing ROI of Late-Stage Lifecycle

Publication Date   December 2004
Publisher   Datamonitor
Product Type   Strategic Report
Pages   97
ISBN Number   not applicable
Product Code   DAT265
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Price £4,000.00

approximately: $7,922 | €5,084

Summary


Successfully 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.

With 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.

Scope:

  • Analysis of Datamonitor's Patent Expiry Database of 45 patent expiries in the US market
  • Primary research with US hospital and retail pharmacists
  • Recommendations for market-specific best practice strategies at patent expiry, based on case studies and future focused environmental assessment
  • Analysis of the capabilities of circa. 30 generics players operating in the US market

Content


  • Chapter 1 Assessing The Impact Of Patent Expiry
    • The importance of planning for patent expiry
    • The operating environment: cost containment, customers and competitors
    • Product specific characteristics
    • Brand defense strategies: four underlying strategic options
    • Assessing the impact of patent expiry: typical generic erosion curves
    • Methodology - Datamonitor's Patent Expiry Database
  • Chapter 2 Operating Environment: Cost Containment, Customers And Competitors
    • Key findings
    • Understanding the local operating environment
    • Regulatory environment
    • US regulatory and legislative reforms
    • Cost containment
    • Stakeholder influence
    • Generics company capabilities
  • Chapter 3 Influence Of Product And Market Specific Characteristics At Patent Expiry
    • Key findings
    • Predicting the impact of patent expiry: guidance from product and market specific characteristics
    • Product specific characteristics: patient is most effective target for promotion of brand-specific features
    • Market specific characteristics: US patent challenge system creates opportunity for successful own-generic strategy
  • Chapter 4 Strategic Options For A Brand At Patent Expiry: A Case Study Analysis
    • Key findings
    • Introduction
    • Strategy selection: an interplay of product, company and market guided factors
    • Regulatory strategy and legal defense
    • Reformulation
    • Launch of second generation product
    • Develop (and patent) new indication
    • Rx to OTC switch
    • Maximize brand loyalty through sales and marketing
    • Strategic pricing
    • Launch own generic
    • Launch of licensed/ friendly generic
    • Divest the product
  • Chapter 5 Appendix
    • References
  • List Of Figures
    • Figure 1: Three key factors determining the impact of patent expiry
    • Figure 2: Stakeholder balance of power
    • Figure 3: Product specific characteristics influencing the impact of generic competition
    • Figure 4: Strategic aims of brand protection strategies
    • Figure 5: Average number of generics
    • Figure 6: Average generic price relative to brand
    • Figure 7: Average generic share of volume
    • Figure 8: Average generic share of value
    • Figure 9: Average brand price relative to 1Q prior to generic entry
    • Figure 10: Evolution in molecule sales following generic entry
    • Figure 11: Factors determining operating environment
    • Figure 12: Predicting time to generic entry in the US
    • Figure 13: Source of US total healthcare funding, 2002
    • Figure 14: States undertaking new Medicaid cost-containment initiatives, 2002-05
    • Figure 15: Cost containment methods used in employer-provided prescription drug coverage
    • Figure 16: Targets of effective cost containment strategies
    • Figure 17: Money flow in the Pharmaceutical distribution chain
    • Figure 18: Generic prescribing in the US is encouraged
    • Figure 19: Ranking of stakeholder influence on whether a branded or generic drug is received by the patient in the US
    • Figure 20: Ranking of factors influencing pharmacists' dispensing decisions in the US
    • Figure 21: Sales breakdown of major generics companies' top 20 US products, split by product formulation
    • Figure 22: Sales breakdown of major generics companies' top 20 US products, split by peak sales of originator's branded product
    • Figure 23: Product specific characteristics influencing the impact of generic competition
    • Figure 24: Attractiveness to generics varies by therapeutic area
    • Figure 25: Impact of product formulation on degree of generic penetration
    • Figure 26: Influence of product specific characteristics on generic substitution in the US
    • Figure 27: Average number of generics by product formulation
    • Figure 28: Average generic price relative to brand by product formulation
    • Figure 29: Average brand price relative to 1Q prior to generic entry by product formulation
    • Figure 30: Average generic share of volume and value by product formulation
    • Figure 31: Average number of generics by market size
    • Figure 32: Average generic price relative to brand by market size
    • Figure 33: Average generic share of volume and value by market size
    • Figure 34: Average brand price relative to 1Q prior to generic entry by market size
    • Figure 35: Average number of generics by patent challenge situation
    • Figure 36: Average generic price relative to brand by patent challenge situation
    • Figure 37: Average generic share of volume and value by patent challenge situation
    • Figure 38: Average brand price relative to 1Q prior to generic entry by patent challenge situation
    • Figure 39: Influence of number of generics on degree of generic penetration 4Q following launch
    • Figure 40: Pharmaceutical brand lifecycle
    • Figure 41: Implementation of early phase lifecycle management strategies prolongs time spent in maturity phase
    • Figure 42: Implementation of late phase lifecycle management strategies reduces the decline in sales in the post-patent phase
    • Figure 43: Factors determining optimal brand protection strategy