Your Patent is About to Expire: What Now? - Pharmaceutical Executive

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Your Patent is About to Expire: What Now?
New research reveals that product attributes are key to designing a post-generic strategy.


Pharmaceutical Executive



Patterns of Investment: Rapid pull back, Burst of late-life activity, Sustained investment
The variance in appropriate responses is illustrated by examining the promotional activity in recent patent expirations. Three patterns emerge. (See "Patterns of Investment,".) The first, showing a sharp drop in activity beginning well before the first generic competitor enters, is typical but hardly universal. The other patterns are the burst of late-life activity and the sustained investment associated with a product like Coumadin.

An effective model for postexpiration performance should consider the effects of continuing brand promotion (after accounting for the attributes and category dynamics). Such a model can be highly valuable for a wide range of products, helping to assess underlying potential and customer responsiveness.

The Big Picture More active, systematic management of brands facing loss of patent protection is essential for pharma companies. As more high-revenue brands, including biologics, lose exclusivity and as generic companies continue to grow in sophistication and strength, brand owners should look beyond traditional lifecycle management to ensure that postexpiration options are fully evaluated.

Understanding the intrinsic potential of a brand is an essential complement to the pursuit of the traditional lifecycle options of follow-on or reformulated compounds. A systematic, attribute-based approach to simulating product performance allows more informed consideration of appropriate options—both in terms of continued brand support and generic participation. This fuller picture should be the goal of all brand managers as their products advance toward inevitable patent expiration.

Edward Tuttle and Andrew Parece are managing principals, and Anne Hector is a vice-president of Analysis Group ( http://www.analysisgroup.com/), an economics, financial, and strategy consulting firm. The views expressed in the article are those of the authors and do not necessarily reflect positions of the firm or its affiliates.


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