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

CHAPTER 1 EXECUTIVE SUMMARY 5
Scope of the report 5
Key findings 6

CHAPTER 2 INTRODUCTION TO LIFECYCLE MANAGEMENT 18
What is lifecycle management? 18
Why is lifecycle management so important now? 19
Patent expiries and thinning pipelines are compounded by tougher pricing and reimbursement conditions 20
Payers are stimulating generics use to cut costs 22
Faster brand erosion post generics entry 25
Growing competition and harder molecule differentiation 28
Other stakeholders are increasingly important 30

CHAPTER 3 CRITICAL CONSIDERATIONS FOR PRODUCT LIFECYCLE MANAGEMENT 32
What is the purpose? 32
Be realistic about your expectations 35
Counter-generic strategies are under growing public scrutiny 35
Timing of execution is critical but few companies consider LCM early enough 36
Think ahead 38
Lifecycle management is a continuous process 39
Capturing internal knowledge 40
What is the best method? 41
Formal or informal approach to lifecycle management? 41
Marketing- or development-driven LCM? 43
Internal company issues impact the choice of LCM strategy 44
Portfolio-led lifecycle management 45
What resources are required and what is available? 47
Understanding each market is crucial 48
Strong market intelligence is important 49
Focus on fulfilling the unmet need 50
Make sure you have a clear message and keep things simple 50
Product characteristics determine the choice of LCM strategy 50
Local versus global LCM drive and execution 51
Flexibility and creativity 53
LCM tactics can act synergistically 53

CHAPTER 4 SELECTING THE RIGHT LIFECYCLE MANAGEMENT STRATEGY 55
Commercial lifecycle management strategies 55
Authorized/own generics 56
Strategic pricing 60
Brand loyalty programs and increasing share of voice 61
Rx-to-OTC switching 63
Divestiture or market exit 65
Geographical expansion 66
Brand protection in non-exclusive markets 67
Developmental lifecycle management strategies 71
Reformulations and second generation products 72
Fixed dose combinations 76
New delivery devices 81
Indication expansion 82
Manufacturing process-based LCM 85
Legal and regulatory strategies 86
Patent litigation 89
Regulatory exclusivity 90

CHAPTER 5 CASE STUDIES OF RECENT LIFECYCLE MANAGEMENT STRATEGIES USED BY BIOPHARMA 96
Fosamax Plus D’s success was determined by market characteristics and timing of launch 96
Fosamax Plus D’s late launch proved fatal for Merck & Co’s alendronate franchise in Germany and the UK… 97
…while early launch resulted in a more successful brand protection in France and Italy 99
US – launching too early? 102
Will the second strategy to minimize losses work? 103
Novartis’s inability to defend its patent for combination drug Lotrel resulted in tremendous loss of sales after Teva’s challenge 104
Biaxin XL – a reformulation offering true benefits 106
Ambien CR – a moderately successful reformulation strategy 108
Actiq and Fentora – a mix of strategies gives mixed success to Cephalon 111
Mixed success for authorized and own generics 116
Merck & Co’s Zocor – authorized generic launched during 180-days exclusivity 116
Pfizer’s Zoloft – own generic launched during 180-day exclusivity 119
Pfizer Zithromax – successful own generic 121
Own generics in Europe 124
Oxycontin legal strategy was a success 126
The FDA rejected an abuse-proof tablet formulation for Oxycontin 129
Voltaren – success in uprotected markets is driving sales growth even after patent expiry 130
Strong differentiation of Aclasta from Zometa is the basis for success of this indication expansion strategy 132
Not only generic defense 134
Keppra – a case of good or bad lifecycle management? 134
Human growth hormones – a lifetime of lifecycle management? 138
Osteoporosis market – a move to intermittent dosage early in the product lifecycle 140

CHAPTER 6 BIBLIOGRAPHY 143
Publications and online articles 143
Conference literature 146
Datamonitor resources 147
Appendix 149
Glossary of Terms 149

LIST OF FIGURES
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

LIST OF TABLES
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