Market Report Source

Overview

As competitive pressures from the entry of generics post-patent expiry and new brands are growing, product lifecycles are evolving for the worst. Effective lifecycle management is becoming a must for Pharma looking to maximize their return on investment, regardless of which stage of the lifecycle a drugs is in. However such strategies are becoming most prominent immediately before patent expiry.

Scope of this report:

• Review of key reasons why lifecycle management is important now
• Analysis of key considerations Pharma need to take care of when devising lifecycle management strategies
• Discussion of most commonly used lifecycle management strategies
• Case study analysis of successful and unsuccessful lifecycle management strategies employed by Pharma

Research and analysis highlights:

One of the key challenges for Pharma is the loss of corporate memory regarding specific brands as brand managers spend on average only 18 months on one product with mainly short term goals in mind. Pharma need to take a structured approach to lifecycle management with a regular review of their strategies in response to internal and external events.

Lifecycle management should not be left until only few years are left to patent expiry. Revenues can be maximized during launch and peak phases by employing the right approaches. If a company starts planning its lifecycle management strategy early, it has more strategies available. However, many companies leave planning until late in the lifecycle.

Payers and physicians are becoming more sceptical of certain steps taken by Pharma as they consider them to be pure lifecycle management. Follow-on products such as reformulations and fixed dose combinations need to ensure they truly satisfy an unmet need in order to achieve even moderate uptake.
Key reasons to read this report

• Identify critical considerations for creating the optimal lifecycle management plan
• Understand when the different lifecycle management strategies are most appropriate
• Gain insight into recent successful and unsuccessful lifecycle management strategies

Table of Contents

CHAPTER 1 EXECUTIVE SUMMARY 4
Scope of the report 4
Key findings 5

CHAPTER 2 INTRODUCTION TO LIFECYCLE MANAGEMENT 10
What is lifecycle management? 10
Why is lifecycle management so important now? 11
Patent expiries and thinning pipelines are compounded by tougher pricing and reimbursement conditions 12
Payers are stimulating generics use to cut costs 14
Faster brand erosion post generics entry 17
Growing competition and harder molecule differentiation 20
Other stakeholders are increasingly important 22

CHAPTER 3 CRITICAL CONSIDERATIONS FOR PRODUCT LIFECYCLE MANAGEMENT 24
What is the purpose? 24
Be realistic about your expectations 27
Counter-generic strategies are under growing public scrutiny 27
Timing of execution is critical but few companies consider LCM early enough 28
Think ahead 30
Lifecycle management is a continuous process 31
Capturing internal knowledge 32
What is the best method? 33
Formal or informal approach to lifecycle management? 33
Marketing- or development-driven LCM? 35
Internal company issues impact the choice of LCM strategy 36
Portfolio-led lifecycle management 37
What resources are required and what is available? 39
Understanding each market is crucial 40
Strong market intelligence is important 41
Focus on fulfilling the unmet need 42
Make sure you have a clear message and keep things simple 42
Product characteristics determine the choice of LCM strategy 42
Local versus global LCM drive and execution 43
Flexibility and creativity 45
LCM tactics can act synergistically 45

CHAPTER 4 SELECTING THE RIGHT LIFECYCLE MANAGEMENT STRATEGY 47
Commercial lifecycle management strategies 47
Authorized/own generics 48
Strategic pricing 52
Brand loyalty programs and increasing share of voice 53
Rx-to-OTC switching 55
Divestiture or market exit 57
Geographical expansion 58
Brand protection in non-exclusive markets 59
Developmental lifecycle management strategies 63
Reformulations and second generation products 64
Reformulation/dosage change/Route of administration (ROA) change 65
Second generation products 67
Fixed dose combinations 68
Achieving protection for FDC products is critical 71
Have a clear message and keep it simple 72
New delivery devices 73
Indication expansion 74
Manufacturing process-based LCM 77
Legal and regulatory strategies 78
Patent litigation 81
Regulatory exclusivity 82
Pediatric exclusivity 84

CHAPTER 5 CASE STUDIES OF RECENT LIFECYCLE MANAGEMENT STRATEGIES USED BY BIOPHARMA 88
Fosamax Plus D’s success was determined by market characteristics and timing of launch 88
Fosamax Plus D’s late launch proved fatal for Merck & Co’s alendronate franchise in Germany and the UK… 89
...while early launch resulted in a more successful brand protection in France and Italy 91
Fosamax patent was reinstated in Europe but is it having an effect? 93
US – launching too early? 94
Will the second strategy to minimize losses work? 95
Novartis’s inability to defend its patent for combination drug Lotrel resulted in tremendous loss of sales after Teva’s challenge 96
Biaxin XL – a reformulation offering true benefits 98
Ambien CR – a moderately successful reformulation strategy 100
Actiq and Fentora – a mix of strategies gives mixed success to Cephalon 103
Mixed success for authorized and own generics 108
Merck & Co’s Zocor – authorized generic launched during 180-days exclusivity 108
Pfizer’s Zoloft – own generic launched during 180-day exclusivity 111
Pfizer Zithromax – successful own generic 113
Pfizer’s reformulation strategy was a failure 113
Pfizer’s own generic azithromycin is still the best selling generic in the US 114
Own generics in Europe 116
Sanofi-Aventis’s launched generic Ambien/Stilnox through Winthrop 116
Oxycontin legal strategy was a success 118
The FDA rejected an abuse-proof tablet formulation for Oxycontin 121
Voltaren – success in uprotected markets is driving sales growth even after patent expiry 122
Strong differentiation of Aclasta from Zometa is the basis for success of this indication expansion strategy 124
Not only generic defense 126
Keppra – a case of good or bad lifecycle management? 126
Indication expansion and development of follow-on products demonstrate commitment to the epilepsy market 127
Brand loyalty programs 129
A variety of formulations 130
Human growth hormones – a lifetime of lifecycle management? 130
Pfizer used a comprehensive approach for Genotropin brand management 131
Osteoporosis market – a move to intermittent dosage early in the product lifecycle 132

CHAPTER 6 BIBLIOGRAPHY 135
Publications and online articles135
Conference literature 138
Datamonitor resources139
Appendix 141
Glossary of Terms 141

List of Tables
Table 1: The impact of generics entry on brand franchises varies across the US and 5EU markets 19

Table 2: Keppra received approval for several different indications and patient populations 128

List of Figures
Figure 1: Different stages of a drug lifecycle 10

Figure 2: Product lifecycles are getting shorter 11

Figure 3: A range of factors are impacting drug lifecycles 12

Figure 4: $102 billion worth of branded drugs from the top 50 Pharma companies face patent expiry from 2008 to 2012 13

Figure 5: Decline in the number of NMEs and new BLAs approved by the FDA, 1993-2006 14

Figure 6: Payers are introducing a range of measures designed to curb drug spending 15

Figure 7: Payers and governments have introduced a range of measures aimed at increasing generics use 16

Figure 8: Various factors impacting brand erosion at patent expiry 18

Figure 9: Entry of generic simvastatin resulting in significant reduction of Lipitor sales in Germany 21

Figure 10: Lifecycle management can have a different purpose 24

Figure 11: Early and mid-phase LCM strategies tend to have a two-fold effect on ROI 25

Figure 12: Late-phase strategies target sales in the mature and declining phases of a drug’s lifecycle 26

Figure 13: Developmental, commercial and legal LCM tactics 26

Figure 14: Depending on the stage of the lifecycle many or only few LCM strategies may be available 29

Figure 15: Key questions that need to be answered at each stage of the lifecycle 30

Figure 16: LCM strategy selection is a continuous process 32

Figure 17: A variety of functions need to be involved in the choice and design of LCM strategies 34

Figure 18: Marketing- versus development-driven LCM 35

Figure 19: A range of internal factors impact the company’s choice of LCM strategy 37

Figure 20: Resources required for different LCM strategies 39

Figure 21: Individual market characteristics impact LCM tactic selection 40

Figure 22: LCM strategies have varying levels of success depending on individual market conditions 41

Figure 23: Product characteristics also impact the choice of LCM tactics 43

Figure 24: Global versus local LCM – the focus changes across the product lifecycle 44

Figure 25: Commercial LCM strategies tend to have the greatest impact post-patent expiry 47

Figure 26: Success drivers and resistors of employing an own/authorized/licensed generic strategy 48

Figure 27: Authorized generics agreements can be either co-operative or competitive in nature 50

Figure 28: Pros and cons for generics companies of entering into authorized generic agreements 51

Figure 29: Pricing strategies at patent expiry 52

Figure 30: Success drivers and resistors of brand loyalty programs and increasing share of voice 54

Figure 31: Drivers and resistors of Rx-to-OTC switching 55

Figure 32: Drivers and resistors of Rx-to-OTC switching in the seven major markets 56

Figure 33: Advantages and disadvantages of divestiture as an LCM strategy 58

Figure 34: Success drivers and resistors of geographical expansion as an LCM tactic 59

Figure 35: Protected vs unprotected markets 60

Figure 36: Two types of unprotected markets exist 60

Figure 37: Routes for brand differentiation in unprotected markets 61

Figure 38: Developmental lifecycle management strategies can boost sales in both mid and late stages of the lifecycle 63

Figure 39: Reformulation and second generation products are developed with different aims depending on the stage of the lifecycle 65

Figure 40: Success drivers and resistors of reformulation as an LCM strategy 67

Figure 41: Success drivers and resistors of second generation product development and launch as an LCM strategy 68

Figure 42: Drivers and resistors of launching fixed dose combinations (FDCs) as an LCM strategy 68

Figure 43: Advantages and disadvantages of single or multiple indication FDCs 70

Figure 44: Success drivers and resistors to launching new delivery devices 73

Figure 45: Success drivers and resistors of indication expansion as an LCM strategy 74

Figure 46: Early versus late launch of new indication 75

Figure 47: Multiple options exist for indication expansion 76

Figure 48: Legal and regulatory strategies tend to extend the protected life of a drug 78

Figure 49: Success drivers and resistors of legal and regulatory LCM strategies 79

Figure 50: Critical considerations for legal and regulatory LCM strategies 81

Figure 51: The length of market exclusivity achievable in the US is different from the EU 83

Figure 52: UK sales of Fosamax suffered extensive generic erosion post patent expiry, Q4 2004-Q4 2007 90

Figure 53: Late launch of Fosavance resulted in failure to protect Merck & Co’s alendronate franchise in Germany, Q1 2005-Q4 2007 91

Figure 54: Fosavance proved to be a successful LCM strategy in France and Italy, Q1 2005-Q4 2007 92

Figure 55: Despite its late launch Fosavance achieved high sales in Spain, Q3 2005-Q4 2007 93

Figure 56: Fosamax Plus D was launched 3 years prior to patent expiry in the US, Q1 2005-Q4 2007 95

Figure 57: Novartis lost almost a half of its Lotrel sales (brand and own generic) after just one generic entrant 97

Figure 58: Biaxin XL proved to be a successful reformulation strategy for Abbott in the short term, 2003-07 99

Figure 59: Sanofi-Aventis focused most of its promotional efforts on Ambien CR following its launch, Q1 2005-Q4 2007 101

Figure 60: Ambien CR managed to retain some of Sanofi-Aventis’s Ambien franchise following generic entry, Q2 2005-Q4 2007 102

Figure 61: Fentora is only moderately successful in protecting Cephalon’s fentanyl franchise, Q2 2006-Q4 2007 105

Figure 62: Cephalon increased the price of Actiq to drive Fentora uptake 106

Figure 63: Cephalon directed all the promotional activities from Actiq to Fentora after its launch 107

Figure 64: Teva and Ranbaxy grabbed the biggest share of the generic simvastatin market despite Dr Reddy’s authorized generic, Q1 2006-Q4 2007 110

Figure 65: Pfizer’s own generic Zoloft diminished the impact of generics entry on the product franchise, Q1 2006-Q4 2007 112

Figure 66: Pfizer’s generic Zithromax was a success despite the lack of 180-days exclusivity for any generics player, 2005-07 115

Figure 67: Early entry enabled Winthrop to hold onto its share of market even after further generic companies entered the market, Q32003-Q42007 117

Figure 68: Purdue’s legal in resulted in return to growth for Oxycontin, Q4 2003-Q4 2007 120

Figure 69: Sales of Voltaren are still growing (2003-2007) 122

Figure 70: Novartis employed a range of commercial and development lifecycle management strategies for Voltaren 123

Figure 71: Zometa’s sales in the six major markets (2003-2007) 124

Figure 72: Aclasta had a strong uptake, especially in the US (2007) 125

Figure 73: Keppra’s sales are still growing even close to patent expiry 126

Figure 74: US sales of Boniva (2005-2007) 133