Corporate Convergence: Previously, most innovator companies focused on commercializing original, branded products while generics companies exclusively sold generic copies. Increasingly, many large branded and generics companies are marketing both types of products. Novartis develops novel agents and sells generic products through its Sandoz division, one of the world's largest generics manufacturers. Sanofi-Aventis, an innovator company, has recently acquired generics manufacturers Zentiva (Czech Republic), Laboratorios Kendrick (Mexico), Medley (Brazil), and Helvepharm (Switzerland). Many other multinational brand companies, including Abbott, Pfizer, and GlaxoSmithKline have partnered with or purchased multiple generics companies. Conversely, generics maker Teva garners over 25 percent of its revenues from novel products, including Copaxone, the world's leading multiple sclerosis brand, and has new products in development for neurology, autoimmune diseases, and oncology.

Commercial Hybridization: As a result of corporate crossbreeding and intensifying competition, branded and generics companies have adopted many of each other's commercial approaches. For example, innovator companies are targeting and offering aggressive commercial terms to distributors and pharmacies, traditionally generic stakeholder strongholds. At the same time, generics companies in some countries are detailing physicians with sales forces that are larger than those of their innovative counterparts.

Perhaps the best example of commercial hybridization is the concept of "branded generics." Prominent innovator and generics companies both promote company-branded products, often stamped with their trusted name on product packages to convey authenticity and quality. For example, Glaxo- SmithKline has forged relationships with generics makers in India, South Africa, and other markets to sell branded generics. Similarly, Medley and EMS Sigma Pharma, Brazil's two largest generics makers, have standard corporate brand packaging to appeal to patients. Teva named its first biosimilar agent Tevagrastim, to compete with Amgen's brand drug Neupogen (filgrastim) for severe neutropenia. Some leading generics companies go even further by developing not only "me-too" products but also "me-betters" that are priced and promoted very much like their innovator brand rivals. For example, Sandoz specializes in differentiating complex generic products including injectibles, inhalables, patches, complex oral solids, and biosimilars, for which it has been a global leader.

Braneric competition is changing very quickly and dramatically. Recognizing the need to adapt to this dynamic landscape, successful innovator companies are adopting several approaches to help compete against generic competition:

Planning: The biggest mistake brand professionals make is waiting too long to plan for generic competition. According to a 2009 Thomson Reuters study, nearly half of surveyed pharmaceutical commercial professionals assume that generics companies begin their competitive planning against brands two years prior to patent expiry. In fact, generics companies often initiate competitive planning with targeting brands eight to 10 years earlier, beginning in Phase III or at the launch of an innovative product. The first sign of such competitive activities is a generics company's sourcing of active pharmaceutical ingredients, usually shortly after a brand's launch. Consequently, innovator professionals need to move beyond the relatively limited timeframe of traditional lifecycle management plans, which focus on extending the brand's patent life, and create more comprehensive, longer-term generic competitive plans that extend a brand's life. Innovators should develop these plans during a brand's prelaunch phase and update them as part of annual brand planning each year following launch.

Customization: Like their generics competitors who carefully select which brands to target, innovators need to analyze and prioritize potential markets, stakeholders, and competitors. Because every product, market, and competitor set is different, innovators should customize their approach for each situation to determine the appropriate timing, resources, and commitment.

Preparation: Prior to engaging generic competition, some companies utilize competitive simulations, war games, and other types of strategic planning exercises to role play and test strategies and tactics. These simulations can be used during brand versus brand exercises by adding a generics competitor; when competing against a generic copy of a rival brand; or when preparing to compete against the generic version of the company's brand.

Training: Innovator companies need to embed competitive mindsets, expertise, and capabilities throughout their organizations. Progressive brand companies are training not only members of their generic task forces and established brand groups but also a broader set of multidisciplinary professionals to compete with generics companies and products in fair and appropriate ways. These training sessions range from one- to two-day seminars and competition summits to simple lunch-and-learns or expert speaker presentations.

Stan Bernard is President of Bernard Associates, a global pharmaceutical industry competition consulting firm. He can be reached at SBernardMD@BernardAssociatesLLC.com
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