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Sales & Marketing

Maximizing Product Returns Through Reformulation

Old Molecules, New Opportunities

Publication Date   August 2004
Publisher   Datamonitor
Product Type   Report
Pages   189
ISBN Number   not applicable
Product Code   DAT194
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Price £8,000.00

approximately: $14,948 | €10,146

Summary


Introduction

Pharmaceutical profit margins are being squeezed by rising costs, high promotional investment and a pipeline crisis. Alongside restoring productivity companies must implement strategies that fully exploit the commercial potential of existing molecules. Whether seeking to expand a market or protect sales following patent expiry, reformulation is one strategy available for maximizing ROI.

Scope of this report

  • Benchmarks the performance of reformulations against competitive differentiation, promotional support, pricing and launch timing in the US market
  • Review of reformulations in cardiovascular, CNS, dermatology, gastrointestinal, infectious disease, oncology, urology and women's health therapy areas
  • Case studies, analysis and interactive Datapack based on a basket of more than 30 reformulations launched in the US market between Q1 1999 and Q4 2003
  • Examines the role of reformulations in growing sales, expanding the scope of molecules, countering generics and seizing untapped market opportunities

Research and analysis highlights

While only 41% of reformulations are deemed to be therapeutically superior to other formulations within their brand franchises, even when poorly differentiated, manufacturers can still achieve market success through effectively managing relative pricing, promotional support and launch timing.Companies are effectively employing reformulations to boost franchise growth. 87% of 'switch and grow' franchises exhibited an increase in the rate of sales growth following reformulation launch. Competitive differentiation and promotional activity are key factors influencing the success of 'switch and grow' reformulations.'Generic defense' reformulations do not receive the same degree of promotional support as 'switch and grow' reformulations and are not sufficiently differentiated from their predecessors to prevent rapid generic erosion. Manufacturers must review their use of reformulations in anti-generic strategies with a focus on promotional support and timing.

Key reasons to read this report

  • Understand how companies employ reformulations in 'switch and grow' 'expand and grow', 'generic defense' and 'market grab' strategies to drive growth
  • Benchmark the success of reformulations in driving franchise sales and delivering a return on investment
  • Gain insight into how competitive differentiation, pricing, promotion and launch timing influence the success of reformulation strategies

Content


  • Chapter 1 Assessing The Roi Of Drug Reformulation
    • The pressure to reformulate
    • Lifecycle management options
    • Combination products
    • Over-the-counter (OTC) switching
    • Drug reformulation
    • What is the ROI of reformulation?
    • Benchmarking relative performance across 'switch and grow' reformulations
    • Benchmarking absolute performance across 'switch and grow' reformulations
    • Benchmarking return on investment across 'switch and grow' reformulations
  • Chapter 2 Tactical And Strategic Objectives For Product Reformulation
    • Key findings
    • The tactical objectives of drug reformulation
    • Lifecycle management and the strategic objectives of drug reformulation
    • Strategic objectives prior to market entry - reducing attrition during development and providing a competitive profile at launch
    • Strategic objectives following market entry - realizing a molecule's full commercial potential and maximizing return on investment
    • Four major post-launch strategic objectives defined
    • Classification of key reformulations launched in the US since Q1 1999 according to strategic objective
    • Strategic objective: 'switch and grow'
    • 'Switch and grow' case studies
    • Detrol LA - reformulating to maintain market dominance
    • Fosamax and Actonel - improving patient convenience
    • Lescol XL (fluvastatin) - clinical trail support and serendipity
    • Strategic objective: 'expand and grow'
    • 'Expand and grow' case studies
    • Avelox IV (moxifloxacin) - accessing patients and indications within the hospital setting
    • 'Keep-up and compete' - an additional strategic consideration?
    • Atypical neuroleptics - reformulating to access the full spectrum of patient segments within the psychotic population
    • Strategic objective: 'generic defence'
    • 'Generic defence' case studies
    • Paxil CR vs. Prozac Weekly - the importance of launch timing
    • Adderall XR - the importance of competitive differentiation and promotional support
    • Wellbutrin SR and XL - a decade of generic defense
    • Strategic objective: 'market grab'
    • 'Market grab' case studies
    • Concerta - exploiting a stagnant market through competitive differentiation
    • Actiq - establishing new market niche for an old molecule
    • Other strategic objectives for reformulation
  • Chapter 3 Benchmarking Reformulations Against Key Success Factors
    • Key findings
    • Executing reformulation strategies - key driver of success
    • Competitive differentiation
    • Benchmarking competitive differentiation
    • Competitive differentiation - 'switch and grow' vs. 'generic defence' reformulations
    • Improved dosing - the most common strategy for achieving competitive differentiation
    • Launch timing and sequencing
    • Launch timing critical in executing 'generic defence' strategies
    • Relative pricing
    • Benchmarking relative pricing
    • 'Expand and grow' and 'market grab' strategies - differentiation and stakeholder value leads to premium pricing opportunities
    • 'Switch and grow' and 'generic defence' strategies - switching and low levels of differentiation introduces discounting
    • Promotional activity
    • Benchmarking promotional activity
    • Promotional activity by strategic type - percentage of promotional activity dedicated to reformulations
    • Promotional activity by strategic type - change in total promotional activity across franchises following launch
    • Benchmarking promotional activity by strategic type - 'promotional score'
  • Chapter 4 Benchmarking Reformulation Performance And Identifying Key Success Factors
    • Key findings
    • Benchmarking reformulation performance and identifying drivers of success
    • Benchmarking reformulation performance and identifying drivers of success
    • Benchmarking switching speed - 'switch and grow' vs. 'generic defence'
    • 'Switch and grow' reformulations - performance benchmarked
    • Benchmarking total franchise growth
    • Change in total franchise growth rate following reformulation launch
    • Benchmarking success by estimating reformulation driven sales growth
    • Identifying the drivers of success in 'switch and grow' strategies
    • Relative pricing
    • Promotional activity
    • Differentiation
    • 'Generic defence' reformulations benchmarked
    • Benchmarking performance by the change franchise sales following generic incursion
    • Benchmarking performance by percentage share of total molecule sales captured following generic incursion
    • Identifying the drivers of success in 'generic defence' strategies
    • Relative pricing and performance
    • Promotional activity
    • Timing
    • Competitive differentiation
    • Supplementary data
    • Definitions for volume, sales and pricing analysis
    • Key strategy team members
    • Neal Hansen, Lead Analyst-Strategic and Competitive Intelligence
    • Andrew Jones, Senior Analyst-Strategy
    • Linda McNamara, Senior Analyst-Strategy
    • Johannes Inama, Strategy Lead Consultant
    • How to contact experts in your industry
  • List Of Tables
    • Table 1: 'Switch and grow' strategies - reformulation driven US revenue four quarters following launch
    • Table 2: Return on investment in the US over a three-year period
    • Table 3: Return on investment in the US over a five-year period
    • Table 4: Classification of key reformulations launched in the US since Q1 1999 (I)
    • Table 5: Classification of key reformulations launched in the US since Q1 1999 (II)
    • Table 6: 'Switch and grow' case studies (key reformulations launched since Q1 1999)
    • Table 7: 'Expand and grow' case studies (key reformulations launched since Q1 1999)
    • Table 8: 'Generic defense' case studies (key reformulations launched since 1999)
    • Table 9: Change in total US sales across six franchises four quarters following generic incursion
    • Table 10: Prozac Weekly vs. Paxil CR - first and second quarter US sales performance post generic incursion
    • Table 11: 'Market grab' case studies (key reformulations launched since 1999)
    • Table 12: Calculating relative pricing - Prozac 20-mg vs. Prozac Weekly
    • Table 13: Decline in US promotional activity across nine franchises immediately prior to reformulation launch
    • Table 14: Lescol XL vs. Lescol - US ex-manufacturer pricing comparison
    • Table 15: 'Generic defense' strategies - change in total US sales four quarters following generic incursion across six franchises
    • Table 16: Remeron SolTab US sales as a percentage of total molecule (mirtazapine) sales (Q3 2002 - Q4 2003)
  • List Of Figures
    • Figure 1: Combination as a lifecycle management option - GlaxoSmithKlines HIV franchise (abacavir, lamivudine, zidovudine) US quarterly sales data (Q1 1999 - Q4 2003)
    • Figure 2: Over-the-counter switching as a lifecycle management option - Schering-Plough's Claritin franchise (loratadine) US quarterly sales data (Q1 1999 - Q4 2003)
    • Figure 3: Reformulation as a lifecycle management option - Shire Pharmaceuticals' Adderall (mixed amphetamine salts) franchise US quarterly sales data (Q1 1999 - Q4 2003)
    • Figure 4: Benchmarking relative reformulation driven increase in total franchise sales over the four quarters following launch
    • Figure 5: 'Switch and 'grow' strategies - reformulation driven increase in franchise sales following reformulation launch
    • Figure 6: 'Switch and grow' strategies - reformulation driven US revenue four quarters following launch
    • Figure 7: 'Switch and grow' reformulations - relative and absolute performance summary
    • Figure 8: Three key tactical objectives for drug reformulation
    • Figure 9: Four classes of strategic objectives for drug reformulation
    • Figure 10: Average lifecycle launch timing of reformulations in 'switch and grow' strategies
    • Figure 11: 'Switch and grow' reformulation strategy
    • Figure 12: Sustiva US volume by quarter 200-mg vs. 600-mg (Q1 1999 - Q4 2003)
    • Figure 13: Detrol LA US sales & volume by quarter (Q4 2000 - Q4 2003)
    • Figure 14: Oxybutynin and tolterodine US sales and volume by quarter (Q1 1999 - Q4 2003)
    • Figure 15: Detrol LA US average pricing by quarter (Q4 2000 - Q4 2003)
    • Figure 16: Fosamax US sales & volume by quarter (Q4 2000 - Q4 2003)
    • Figure 17: Fosamax 70-mg US average pricing by quarter (Q4 2000 - Q4 2003)
    • Figure 18: Fosamax vs. Actonel US sales by quarter (Q1 1999 - Q4 2003)
    • Figure 19: Average US price Fosamax 70-mg vs. Actonel 35-mg (Q2 2002 - Q4 2003)
    • Figure 20: US sales by bisphosphonate franchise - Actonel, Didronel, Fosamax, Skelid and Zometa (Q1 1999 - Q4 2003)
    • Figure 21: Lescol XL US sales & volume by quarter (Q4 2000 - Q4 2003)
    • Figure 22: Lescol XL US average pricing by quarter (Q4 2000 - Q4 2003)
    • Figure 23: Average lifecycle launch timing of reformulations in 'expand and grow' strategies
    • Figure 24: 'Expand and grow' reformulation strategy
    • Figure 25: Avelox IV German volume sales by quarter (Q2 2002 - Q4 2003)
    • Figure 26: Avelox IV average pricing in the German market by quarter (Q2 2002 - Q4 2003)
    • Figure 27: US hospital uptake of Avelox oral formulation driven by Avelox IV (Q1 1999 - Q4 2003)
    • Figure 28: Geodon IM US sales by quarter (Q3 2002 - Q4 2003)
    • Figure 29: Key reformulations within the atypical neuroleptic market
    • Figure 30: Average lifecycle launch timing of reformulations in 'generic defense' strategies
    • Figure 31: 'Generic defense' reformulation strategy
    • Figure 32: 'Generic defense' - average performance of original formulation, reformulation and total franchise sales four quarters following launch of first generic competitor in the US
    • Figure 33: Prozac weekly vs. Paxil CR US sales by quarter (Q1'99 - Q4'03)
    • Figure 34: Adderall XR US sales & volume by quarter (Q4 2001 - Q4 2003)
    • Figure 35: Adderall XR US average pricing by quarter (Q4 2001 - Q4 2003)
    • Figure 36: Adderall franchise market share of the US ADHD market (1999 - 2003)
    • Figure 37: US promotional spend on the Adderall franchise (Q1 1999 - Q4 2003)
    • Figure 38: Wellbutrin franchise US sales by quarter (Q1 1999 - Q4 2003)
    • Figure 39: Global sales forecast for Wellbutrin (2003 - 2011)
    • Figure 40: 'Market grab' reformulation strategy
    • Figure 41: Concerta US sales & volume by quarter (Q2 2000 - Q4 2003)
    • Figure 42: Concerta US average pricing by quarter (Q2 2000 - Q4 2003)
    • Figure 43: Adderall XR and Concerta's share of the US stimulant-based ADHD market (1999 - 2003)
    • Figure 44: Actiq US sales & volume by quarter (Q1 1999 - Q4 2003)
    • Figure 45: Plasma concentrations of fentanyl following oral transmucosal or oral delivery
    • Figure 46: Actiq US average pricing by quarter (Q4 2001 - Q4 2003)
    • Figure 47: Benchmarking therapeutic differentiation between reformulation and preceding formulation across 27 brands
    • Figure 48: Therapeutic differentiation - 'Generic defense' reformulations vs. 'switch and grow' reformulations
    • Figure 49: Improved dosing - the most common strategy for achieving competitive differentiation
    • Figure 50: Average lifecycle launch timings for four strategic types of reformulation
    • Figure 51: Sequence of once-daily reformulation launches in the US ADHD (Q1 1999 - Q2 2003)
    • Figure 52: US launch timing of generic defense reformulations in relation to entry of 1st generic competitor
    • Figure 53: Comparative analysis by strategic type - relative average US pricing four quarters following launch for 26 reformulations
    • Figure 54: Relative average US pricing - 'switch and grow' vs. 'generic defense'
    • Figure 55: Relative average US pricing 12 quarters following launch in 'switch and grow' reformulations
    • Figure 56: US promotional activity across the Paxil franchise (Q1 1999 - Q4 2003)
    • Figure 57: Comparative analysis by strategic type - percentage of US promotional activity dedicated to reformulations
    • Figure 58: US promotional spend on the Protonix franchise (Q1 1999 - Q4 2003)
    • Figure 59: US promotional spend on the Betapace franchise (Q1 1999 - Q4 2003)
    • Figure 60: Comparative analysis by strategic type - change in total US promotional activity across franchises following reformulation launch
    • Figure 61: US promotional spend on the Prozac franchise (Q1 1999 - Q4 2003)
    • Figure 62: Comparative analysis by strategic type - 'promotional score'
    • Figure 63: 'Switch and grow' strategies - average switching speed three years following launch
    • Figure 64: Supply driven switching - US quarterly volume data for Copaxone (glatiramer acetate) (Q1 1999 - Q4 2003)
    • Figure 65: 'Switch and grow' vs. 'generic defense' - speed of switching
    • Figure 66: 'Switch and grow' strategies - average growth in total US franchise sales three years following reformulation launch
    • Figure 67: 'Switch and grow' strategies - change on total US sales growth following reformulation launch across fifteen franchises
    • Figure 68: 'Switch and 'grow' strategies - reformulation driven increase in total franchise sales over the four quarters following reformulation launch
    • Figure 69: 'Switch and grow' strategies - relationship between the degree of premium/discount and strength of switching four quarters following launch
    • Figure 70: 'Switch and grow' strategies - relationship between the degree of premium/discount and reformulation performance
    • Figure 71: 'Switch and grow' strategies - relationship between increase in total promotional activity and reformulation performance
    • Figure 72: 'Switch and grow' strategies - relationship between percentage of promotional activity dedicated to reformulation and reformulation performance
    • Figure 73: Switch and grow' strategies - relationship between 'promotional score' and reformulation performance
    • Figure 74: 'Switch and grow' reformulations - role of competitive differentiation in driving reformulation performance
    • Figure 75: Average US ex-manufacturer price - Ritalin LA vs. Concerta and Adderall XR
    • Figure 76: US promotional spend on the Finevin/Finacea franchise (Q3 2000 - Q4 2003)
    • Figure 77: 'Switch and grow' reformulations - role of competitive differentiation in driving reformulation performance (B)
    • Figure 78: Sustiva US sales by quarter (Q4 1999 - Q4 2003)
    • Figure 79: Depakote US sales by quarter (Q4 1999 - Q4 2003)
    • Figure 80: Zoladex US sales & volume by quarter (Q4 1999 - Q4 2003)
    • Figure 81: 'Generic defense' strategies - average performance of original formulation, reformulation and total franchise sales four quarters following generic incursion in the US
    • Figure 82: 'Generic defense' strategies - percentage of total US molecule sales captured by reformulations four quarters following generic incursion across five franchises
    • Figure 83: 'Generic defense' strategies - relationship between pricing and change in franchise sales four quarters following generic incursion
    • Figure 84: Cipro vs. Glucophage - franchise sales following generic incursion in the US market
    • Figure 85: 'Generic defense' strategies - relationship between pricing and percentage of total molecule sales captured by reformulations four quarters following generic incursion
    • Figure 86: 'Generic defense' strategies - change in total promotional activity vs. change in total franchise sales four quarters following generic incursion
    • Figure 87: 'Generic defense' strategies - percentage share of total promotional activity dedicated to reformulation vs. change in total franchise sales four quarters following generic incursion
    • Figure 88: 'Generic defense strategies' - relationship between 'promotional score' and percentage of total molecule sales captured by reformulations four quarters following generic incursion
    • Figure 89: 'Generic defense' strategies - factors influencing reformulation success, change in promotional activity vs. percentage of promotional activity dedicated to reformulation four quarters following generic incursion
    • Figure 90: 'Generic defense' strategies - relationship between reformulation launch timing and change in franchise sales four quarters following generic incursion
    • Figure 91: 'Generic defense' strategies - relationship between launch timing and percentage of total molecule sales captured by reformulations four quarters following generic incursion
    • Figure 92: 'Generic defense' strategies - relationship between differentiation of reformulation and change in franchise sales four quarters following generic incursion
    • Figure 93: Remeron franchise US sales by quarter (Q1 1999 - Q4 2003)
    • Figure 94: US promotional spend on the Prozac franchise (Q1 1999 - Q4 2003)
    • Figure 95: 'Generic defence' strategies - relationship between differentiation and percentage of total molecule sales captured by reformulations four quarters following generic incursion
    • Figure 96: 'Switch and grow' strategies - switching data for 13 reformulations
    • Figure 97: 'Switch and grow' strategies - growth in total US sales across 13 franchises following reformulation launch
    • Figure 98: 'Generic defense' strategies - switching data for seven reformulations
    • Figure 99: US hospital uptake of Tequin oral formulation driven by Tequin IV (Q1 1999 - Q4 2003)