Ahead of the Curve

Your team believes your brand could retain a higher percentage of sales post-LOE—now what? Importantly, ex-US markets may offer greater post-LOE opportunities due to still maturing generic competition, pharmacists' larger roles in drug selection, or less established markets. Not surprisingly, pharma continues to look abroad. Pfizer's newly launched and newly chewable Viagra Jet demonstrates how reformulations tested in key ex-US markets—in this case Mexico—often have global overtones.

Even on the home front, however, brands have two complementary sets of options: bolster unit sales or increase profitability. In the former category, we recommend three approaches:

» Support messaging with investigator-initiated research and niche data; and

» Leverage aggressive contracting to preserve or build access for higher utilization products.

As an example, in the anti-epileptic drug market, UCB undertook product enhancements for Keppra, but complemented them with strong physician branding and patient advocacy outreach, keeping its sales ahead of the curve. Building such loyalty doesn't need to be expensive. Physician and patient groups often bemoan the loss of product education and support materials as manufacturers harvest their brands, but manufacturers can leverage these resources.

Brands can also maintain marketing efforts. Even if label expansion is out of reach, brands should go into LOE full steam ahead. Supporting physician-led research or targeting co-morbid populations with higher unmet needs can cement peri-LOE positioning. Repackaging old data or broadcasting new trial results helps create buzz from the podium for an otherwise tired brand. Unfortunately, such tactics require a deft touch. Overly aggressive promotion lands hefty fines, as Novartis unfortunately discovered with its $185 million settlement for off-label promotion of Trileptal, as its patent expiry approached.

Even if brands cannot rely on consumer loyalty, aggressive contracting can grow sales. Different brands have gone to different discounting lengths, depending on managed care's appetite. Merck successfully got UnitedHealth Group to move Zocor into the cheapest tier on its three-tier formulary, saddling Teva's generic simvastatin on tier three with a $15-higher co-pay. Such approaches firmly cement long-term relationships with payers and providers while pumping up post-LOE sales, at least for another six months. For sub-blockbusters—such as the Cosopt or Razadynes of a particular class—group-purchasing organization private labels, integrated deliver network's formularies, and Medicaid preferred drug lists all offer additional potential opportunities to bolster unit sales. The trick, of course, is to make sure a brand does not buy market share at the expense of profit.

Extra Tactics

What if unit sales can't be maintained? In this case, it is worth focusing on leveraging existing market share through harvesting brand equity through price increases, or growing a brand's margin by streamlining COGS, sales, or marketing expenses.

Particularly for sub-blockbusters, more aggressive price increases can often capture higher margins with limited volume loss. Payers report price increases of up to 25 percent in the last 24 months before LOE, and typically view this as the "cost of doing business." Alternatively, or in parallel, brands can employ various cost-cutting tactics. Streamlining manufacturing and distribution by reducing SKU variety or the number of batch runs can generate easy savings while maintaining brand loyalty. In addition, brand teams should carefully evaluate the optimal peri-LOE advertising mix across major spend categories, as well as the use of emerging technologies such as sales force automation, e-detailing, and customer relationship management. Brands may take a page from AstraZeneca's Nexium playbook and wind down their sales forces while capturing economies of scale through new call centers, online information, and online sampling. When deployed effectively, such strategies can help identify brand-loyal customers and maintain profitability.

Andrew Matthews is Associate at Leerink Swann Consulting. He can be reached at Andrew.Matthews@leerink.com

Frank David is Director at Leerink Swann Consulting. He can be reached at Frank.David@leerink.com

Jeffrey Aroy is Senior Managing Director and Head of Leerink Swann Consulting. He can be reached at jeff.aroy@leerink.com