Generic Series: Optimizing Brand Lifecycle Management Winning Strategies to Maximize Revenue in the Face of Growing Generic Competition

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.

Report 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.
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Overview 1
Catalyst 1
Summary 1
Methodology 1
Executive Summary 2
Packages are a popular choice for SMEs with employers’ and public liability being common products among SMEs 2
A number of players have enhanced their product offerings and service features in a bid to target SMEs 2
The broker channel continues to dominate the market with retention levels remaining high 2
A large proportion of SMEs are unlikely to switch to a new provider 3
A significant proportion of SMEs are open to purchasing their insurance via the internet or phone 3
Market Context 9
Introduction 9
The general liability, commercial property, commercial motor and pecuniary loss markets recorded a fall in GWP in 2006 9
SMEs account for the vast majority of firms in the UK, and SME GWP is estimated to be in the region of £3.5 billion 13
Packages are a popular choice for SMEs with employers’ and public liability being common products among SMEs 16
A number of new players entered the SME market in 2007 and 2008, increasing competition 18
Alliances between brokers and insurers were evident in 2008, as players continue to target growth in the SME sector 19
A number of players have enhanced their product offerings and service features in a bid to target SMEs 21
Insurance providers tend to target the SME market through size and industry segment 22
Distribution Dynamics 24
Introduction 24
The broker channel continues to dominate the market with retention levels remaining high 24
Most SMEs do not receive additional services from their insurance providers and are satisfied with this arrangement 31
Potential Switchers 35
Introduction 35
A large proportion of SMEs are unlikely to switch to a new provider 35
A significant proportion of SMEs are willing to purchase insurance from a bank or direct in a bid to save money 41
A significant proportion of SMEs are open to purchasing their insurance via the internet or phone 46
Action Points 51
Banks should challenge their current image among SMEs and focus their attention on targeting start ups 51
Brokers must remain competitive on price when targeting SMEs and focus on advisory services 51
Direct insurers would benefit from emphasizing their low cost and industry expertise 52
APPENDIX 53
Definitions 53
Methodology 53
2005 definitions for lines of business 62
Pre-2005 definitions for lines of business 68
Further reading 72
Ask the analyst 72
Datamonitor consulting 72
Disclaimer 72
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Table 1: The impact of generics entry on brand franchises varies across the US and 5EU markets 27
Table 2: Keppra received approval for several different indications and patient populations 136
Figure 1: Different stages of a drug lifecycle 18
Figure 2: Product lifecycles are getting shorter 19
Figure 3: A range of factors are impacting drug lifecycles 20
Figure 4: $102 billion worth of branded drugs from the top 50 Pharma companies face patent expiry from 2008 to 2012 21
Figure 5: Decline in the number of NMEs and new BLAs approved by the FDA, 1993–2006 22
Figure 6: Payers are introducing a range of measures designed to curb drug spending 23
Figure 7: Payers and governments have introduced a range of measures aimed at increasing generics use 24
Figure 8: Various factors impacting brand erosion at patent expiry 26
Figure 9: Entry of generic simvastatin resulting in significant reduction of Lipitor sales in Germany 29
Figure 10: Lifecycle management can have a different purpose 32
Figure 11: Early and mid-phase LCM strategies tend to have a two-fold effect on ROI 33
Figure 12: Late-phase strategies target sales in the mature and declining phases of a drug’s lifecycle 34
Figure 13: Developmental, commercial and legal LCM tactics 34
Figure 14: Depending on the stage of the lifecycle many or only few LCM strategies may be available 37
Figure 15: Key questions that need to be answered at each stage of the lifecycle 38
Figure 16: LCM strategy selection is a continuous process 40
Figure 17: A variety of functions need to be involved in the choice and design of LCM strategies 42
Figure 18: Marketing- versus development-driven LCM 43
Figure 19: A range of internal factors impact the company’s choice of LCM strategy 45
Figure 20: Resources required for different LCM strategies 47
Figure 21: Individual market characteristics impact LCM tactic selection 48
Figure 22: LCM strategies have varying levels of success depending on individual market conditions 49
Figure 23: Product characteristics also impact the choice of LCM tactics 51
Figure 24: Global versus local LCM – the focus changes across the product lifecycle 52
Figure 25: Commercial LCM strategies tend to have the greatest impact post-patent expiry 55
Figure 26: Success drivers and resistors of employing an own/authorized/licensed generic strategy 56
Figure 27: Authorized generics agreements can be either co-operative or competitive in nature 58
Figure 28: Pros and cons for generics companies of entering into authorized generic agreements 59
Figure 29: Pricing strategies at patent expiry 60
Figure 30: Success drivers and resistors of brand loyalty programs and increasing share of voice 62
Figure 31: Drivers and resistors of Rx-to-OTC switching 63
Figure 32: Drivers and resistors of Rx-to-OTC switching in the seven major markets 64
Figure 33: Advantages and disadvantages of divestiture as an LCM strategy 66
Figure 34: Success drivers and resistors of geographical expansion as an LCM tactic 67
Figure 35: Protected vs unprotected markets 68
Figure 36: Two types of unprotected markets exist 68
Figure 37: Routes for brand differentiation in unprotected markets 69
Figure 38: Developmental lifecycle management strategies can boost sales in both mid and late stages of the lifecycle 71
Figure 39: Reformulation and second generation products are developed with different aims depending on the stage of the lifecycle 73
Figure 40: Success drivers and resistors of reformulation as an LCM strategy 75
Figure 41: Success drivers and resistors of second generation product development and launch as an LCM strategy 76
Figure 42: Drivers and resistors of launching fixed dose combinations (FDCs) as an LCM strategy 76
Figure 43: Advantages and disadvantages of single or multiple indication FDCs 78
Figure 44: Success drivers and resistors to launching new delivery devices 81
Figure 45: Success drivers and resistors of indication expansion as an LCM strategy 82
Figure 46: Early versus late launch of new indication 83
Figure 47: Multiple options exist for indication expansion 84
Figure 48: Legal and regulatory strategies tend to extend the protected life of a drug 86
Figure 49: Success drivers and resistors of legal and regulatory LCM strategies 87
Figure 50: Critical considerations for legal and regulatory LCM strategies 89
Figure 51: The length of market exclusivity achievable in the US is different from the EU 91
Figure 52: UK sales of Fosamax suffered extensive generic erosion post patent expiry, Q4 2004–Q4 2007 98
Figure 53: Late launch of Fosavance resulted in failure to protect Merck & Co’s alendronate franchise in Germany, Q1 2005–Q4 2007 99
Figure 54: Fosavance proved to be a successful LCM strategy in France and Italy, Q1 2005–Q4 2007 100
Figure 55: Despite its late launch Fosavance achieved high sales in Spain, Q3 2005–Q4 2007 101
Figure 56: Fosamax Plus D was launched 3 years prior to patent expiry in the US, Q1 2005–Q4 2007 103
Figure 57: Novartis lost almost a half of its Lotrel sales (brand and own generic) after just one generic entrant 105
Figure 58: Biaxin XL proved to be a successful reformulation strategy for Abbott in the short term, 2003–07 107
Figure 59: Sanofi-Aventis focused most of its promotional efforts on Ambien CR following its launch, Q1 2005–Q4 2007 109
Figure 60: Ambien CR managed to retain some of Sanofi-Aventis’s Ambien franchise following generic entry, Q2 2005–Q4 2007 110
Figure 61: Fentora is only moderately successful in protecting Cephalon’s fentanyl franchise, Q2 2006–Q4 2007 113
Figure 62: Cephalon increased the price of Actiq to drive Fentora uptake 114
Figure 63: Cephalon directed all the promotional activities from Actiq to Fentora after its launch 115
Figure 64: Teva and Ranbaxy grabbed the biggest share of the generic simvastatin market despite Dr Reddy’s authorized generic, Q1 2006–Q4 2007 118
Figure 65: Pfizer’s own generic Zoloft diminished the impact of generics entry on the product franchise, Q1 2006–Q4 2007 120
Figure 66: Pfizer’s generic Zithromax was a success despite the lack of 180-days exclusivity for any generics player, 2005–07 123
Figure 67: Early entry enabled Winthrop to hold onto its share of market even after further generic companies entered the market, Q32003-Q42007 125
Figure 68: Purdue’s legal in resulted in return to growth for Oxycontin, Q4 2003–Q4 2007 128
Figure 69: Sales of Voltaren are still growing (2003-2007) 130
Figure 70: Novartis employed a range of commercial and development lifecycle management strategies for Voltaren 131
Figure 71: Zometa’s sales in the six major markets (2003-2007) 132
Figure 72: Aclasta had a strong uptake, especially in the US (2007) 133
Figure 73: Keppra’s sales are still growing even close to patent expiry 134
Figure 74: US sales of Boniva (2005-2007) 141
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