Generic competition. A 2009 Thomson Reuters survey revealed most pharma professionals wait too late to prepare for generic
competition, usually only a few years instead of the eight to 10 years before a product's patent expiration. Innovator professionals
utilizing DLO initiate generic competitive planning prior to their brand's market launch, at the same time as generic companies
typically start their planning by procuring the brand's active pharmaceutical ingredients. Earlier competitive planning is
essential since increasingly aggressive generic companies are no longer waiting for patent expiration to enter the market.
Teva has launched over a dozen products "at risk" in the United States prior to patent expiration. Many other generic companies
have launched products prior to patent expiry in Europe and in some cases prior to the innovator's own product launch, as
occurred with Amgen/Pfizer's rheumatoid arthritis agent Enbrel in China.
Recalculating product valuations. Business development professionals can utilize the DLO framework to properly value in-licensing
and out-licensing opportunities by accounting for the full value of a product's life, not just during those middle years when
the product stands front and center in the market. In fact, companies can use DLO to persuade payers on how innovative brand
medicines can serve as a source of long-term value, setting prices in the context of a long duration of exposure to patients
and the market. Stephen Whitehead, chief executive of the Association of the British Pharmaceutical Industry (ABPI), has used
this DLO argument to expedite the adoption of novel products by payers in the UK healthcare system. He is determined to get
the National Health Service authorities to stop thinking about the product lifecycle as the patent lifecycle, because the
cumulative life of a product extends far beyond that—closer to 40 years. "The value of a medicine, starting from discovery
to the point where it is replaced by something else is much greater than what is currently taken into account by regulators,"
he says.
Stan Bernard MD, MBA is President of Bernard Associates, LLC, a leading global pharmaceutical industry competition consulting firm. He is also
a member of Pharm Exec's EAB Board. He can be reached at SBernardMD@BernardAssociatesLLC.com
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