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.
Patterns of Investment: Rapid pull back, Burst of late-life activity, Sustained investment
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.