More life than you think
DLO is a disruptive innovation because it requires a transformational change in the mindset of every pharmaceutical professional.
In contrast to LCM, DLO:
Incorporates early-stage development planning. The early period is a way to showcase not only the clinical but also the commercial
market potential of a new product. During this foundational period, pharmaceutical planners are tasked with making crucial
business planning decisions that will determine the ultimate sales, profitability, and therapeutic impact of the new agent,
over a period of decades. The early period also requires a forward looking accounting of the full range of investments to
position the drug for market success.
Includes the late generic period. Unlike the LCM curve, the DLO curve does not end with product patent expiration but includes
the late period beginning with the loss of market exclusivity and initial generic competition. DLO recognizes that patent
expiry is not necessarily the demarcation line for an abandonment of product support, since generic competitors are now entering
the market to grab brand share prior to patent expiration. Moreover, there is no longer a single, primary patent or patent
expiration date, even in the same market. Innovators utilize various types of patents (e.g., composition of matter, method,
formulation, etc.), which generic companies can challenge in different markets.
Realizes cumulative product sales. DLO focuses on maximizing product sales throughout the entire life of the product, including
the post-marketing exclusivity period. Consequently, the DLO approach assumes there is real business opportunity even for
products facing generic competition, in contrast to the historical practice of withdrawing support from products as LOE approaches.
A 2011 Leerink-Swann investor analysis reveals that innovative companies can capture as much as 20 to 30 percent of the total
value of an innovative product after patent expiration and the onset of generic competition, by considering a wide range of
Encourages a holistic business approach. LCM is preoccupied with winning during the middle years of the LCM curve; it relies
on traditional marketing and sales promotion channel strategies to compete. However, DLO offers many other ways to win, involving
the application of regulatory and legal tools; manufacturing, distribution, and formulation changes; partnerships, mergers
and acquisitions; public policy, public relations, and stakeholder reputation advocacy; portfolio management; and other actions.
Execution of DLO strategies thus demands an integrated, multi-disciplinary and cross-functional team approach to manage things
through the entire life of the drug.
Like LCM, DLO has several limitations. Different types of products, such as acute care products or vaccines, will have different
life curve "shapes." Because there are so many pharmaceutical stakeholders and market influences, the shape and duration of
the life curve for any given product is highly unpredictable. For example, new clinical data, regulatory requirements, or
market access can dramatically alter the drug's life. While the LCM and DLO curves are typically used cumulatively to reflect
total sales across geographies, the curves for a particular drug can be applied to a specific market. Unlike LCM, the DLO
curve includes the drug's pre-launch clinical and commercial investment, which represents only a relative estimation of actual