Extending the Product Lifeline

July 1, 2003
John Ho, MD

Pharmaceutical Executive

Pharmaceutical Executive, Pharmaceutical Executive-07-01-2003,

Pharma companies seem to have forgotten one key lesson: Blockbusters are made, not discovered. Few drugs achieve top sales based on their initial formulation and indications.

Pharma companies seem to have forgotten one key lesson: Blockbusters are made, not discovered. Few drugs achieve top sales based on their initial formulation and indications. Instead, most major products succeed because of a company's concerted efforts to expand and extend their application through product lifecycle management (PLM). Pharma powerhouses Pfizer and Novartis have reaped superior rewards by balancing their efforts in pursuit of both new chemical and biological entities (NCEs/NBEs) and line extensions. They pursued PLM to capture the full value of the products they already had, while continuing to investigate novel NCEs.

This article outlines how pharma companies can use enhanced PLM opportunities for growth and profitability. During the ten years of additional patent life that reformulation can bring, the average blockbuster earns more than $2 billion in net profits. Although other avenues-a switch from brand-name prescriptions to over-the-counter products, branded generics, and combination products-are applicable for a few medications, reformulation is a cost-effective way to extend the lifeline of most brand-name therapies.

Lifecycle Strategies

During the patent exclusivity period, companies can increase sales through eight PLM strategies:

Marketing. By developing prelaunch awareness, taking the product launch global, and creating marketing and promotional alliances, companies can ensure the broadest access to the available customer base and thus the fastest ramp-up in sales. Warner-Lambert/Pfizer's co-promotion efforts for Lipitor (atorvastatin), and Pharmacia/Pfizer's for Celebrex (celecoxib) are good examples of how companies can join forces to create "category killers."

Indication expansion. Maximizing the label before patent expiry-the preferred approach of many franchises-is another way to enhance brand image and sales. Companies should always consider that development option, assessing both the therapeutic area and cross-therapeutic area opportunities of their candidates and targets. (See "Reformulating Rewarded," page 74.)

Pediatric or orphan indications. These can speed approval time and bring six months or seven years of market exclusivity, respectively, but in most cases they expand the market only marginally, because children don't take many medications and orphan products have small markets.

Combination products. Although attractive as a way to extend a therapy's life, combination products are difficult to develop because FDA treats them almost as though they are new NCEs. Although GlaxoSmithKline's Combivir, which combines Epivir (lamivudine) and Retrovir (zidovudine), is a success story, Merck and Schering-Plough' s difficulties in combining Singulair (montelukast) with Claritin (loratadine) highlights the challenges of this approach. Because these combinations are treated as new NCEs, they must go through lengthy trials to show they are more efficacious than their individual active ingredients.

New forms. These include salts, co-crystals, and hydrates that have benefits of their own or enhance the effectiveness of a drug delivery technology.

New formulations. Many successful product extensions come through formulation changes such as:

  • controlled release and delivery systems

  • chiral forms/isomers and active metabolites

  • process technologies, such as purification and expression systems

  • drug delivery systems such as patches, devices, and implants.

Of those enhancements, drug delivery technology has traditionally held the greatest promise. By marrying an off-patent opiate with a novel, transdermal drug delivery system, for example, Alza created a $1 billion-a-year blockbuster in Duragesic (fentanyl patch). Still, drug delivery systems often have considerable limitations, such as utility with only certain types of compounds and challenges in delivering the dosage desired. Those factors can add significantly to cost and regulatory complexity.

Switch from Rx to over-the-counter. Although an Rx-to-OTC switch can be lucrative, only a few types of medication are suitable for OTC sales: those for non-serious conditions and those with good therapeutic to toxicity ratios. Antihistamines, H2 blockers to relieve heartburn and gastroesophageal reflux disease, and antidiarrheals are three common success stories. Other potential categories-such as statins, antibacterials, and hormones-may not be successful because of concerns about self treatment, toxicity, and misuse.

Branded generics. Given Big Pharma's limited success in competing with generics companies, few innovator pharma companies have pursued this approach, but there are exceptions: Bristol-Myers Squibb (Coumadin/warfarin), Pfizer (Dilantin/phenytoin), Novartis (Tegratol/carbamazepine), Abbott (Depakote/divalproex), and GlaxoSmithKline (Dyazide/hydrochlor-othiazide/triamterene). Many products that have crossed over to OTC status still have some innovator-only dosage forms. In other cases, only the innovator's original product has been approved for a particular indication. Either situation can be the basis for branding a generic.

Threats to Ownership

Patent expiry is not the only threat to a company's products. If competitors find novel, commercially relevant forms of an active ingredient, those new formulations can erode the market share of the originator. In the worst case, a competitor could find novel forms, formulations, or delivery systems for a molecule and block the company that owns it from using those forms or formulations as part of its own products' lifecycles. Sepracor used that strategy to identify isomers or metabolites of other companies' drugs and to license them back to the owners of the original molecule.

The same potential exists with novel solid forms-polymorphs, salts, hydrates, and co-crystals-and drug formulations. Aggressive generics and specialty pharma companies have begun to exploit that potential, filing rafts of patent claims on others' molecules. In that way, such "upstarts" can skirt the patent process of mature companies.

Three such examples are Pfizer's Zoloft (sertraline) and Norvasc (amlodipine) and GlaxoSmithKline's Paxil (paroxetine). In each case, one or more competitors claim to have identified an alternative solid form of the active ingredient that is bioequivalent to the brand-name product. In each case, the competitors seek to launch these products before the innovator's patents on the specific solid form of the compound expire.

Pfizer and GSK made themselves vulnerable to such attack by failing to patent-protect, in a timely fashion, all of the forms with potential commercial value. That is not surprising, because there is little internal incentive, given the time and expense of conventional "low throughput" screening, for innovators to keep looking for every way to develop an acceptable version of a drug once they have identified one acceptable form. But that might be penny wise and pound foolish. Although both companies benefit from exclusivity until their NCE patent expires, they may lose several years of additional exclusivity on preferred solid forms of their compounds because they failed to identify and patent all other viable alternative forms.

To prevent other companies from prematurely entering their markets, innovator companies must investigate their drug molecules thoroughly before they bring them to market, then file patent claims on all commercially relevant and potentially beneficial solid forms and formulations of each one, as well as delivery systems that might be used with the compound. Otherwise, they risk losing a piece of the pie at later stages of their products' lifecycles.

One way innovator pharmas can address this issue is by employing the kinds of sophisticated high-throughput screening techniques and informatics that they typically reserve for new product discovery. Traditionally, form and formulation experiments have been done in a manual, low-throughput manner, involving only tens of experiments per compound.

By using high-throughput techniques, companies can conduct thousands of experiments on compounds that are already patented in search of nonobvious forms as well as synergistic, excipient combinations for use in product extension and enhancement. Using such an approach, companies with approved products could harvest significant additional lifecycle opportunities.

Promise and Peril

New technologies are also increasing the range of possibilities for biologics, and that is critical, because many major first-generation biologics are under generic threat. In this arena, too, companies have several ways to extend patent life:

  • post-expression modifications, such as glycosylation

  • directed evolution

  • targeted coupling, conjugation, and fusion of molecules to enhance therapeutic value

  • expression system improvements, including molecular biologic approaches

  • drug-delivery systems, such as depot, needleless, and inhaled/nasal forms.

A majority of biological products currently on the market are glycoproteins-proteins with attached sugar chains. Glycosylation is critically important in the pharmokinetics, bioactivity, solubility, and immunogenicity of such products. Its critical role enables companies to improve the performance of therapeutic proteins and extend their intellectual property life. Neose's GlycoPEGylation technology, for instance, has been shown to significantly improve the pharmacokinetics of many products, including several currently marketed glycoprotein blockbusters such as erythropoietin and follicle-stimulating hormone.

Amgen's Neulasta (pegfilgrastim), a pegylated version of Neupogen (filgrastim)-the man-made form of granulocyte colony-stimulating factor-is another example. It offers a more convenient dosing schedule and a longer half-life for the compound, which stimulates production of white blood cells in users, most of whom are cancer patients. With Aranesp (darbepoetin alfa), Amgen's follow-on product to Epogen (epoetin alfa), the company reengineered the basic protein to create a "next generation" drug. Aranesp has an additional two N-linked glycosylation sites beyond Epogen's three sites. These sugar molecules attached to the protein significantly increase half-life and reduce dosing frequency for the red blood cell-producing protein.

Management's Role

Pharmaceutical executives must play a critical role in rejuvenating interest in PLM within their companies. They must understand new technologies but also be aware of opportunities for, and threats to, the company's products. They need to ensure that their companies maintain an appropriate balance of PLM, drug discovery, and innovation. Here's how:

Prioritize franchise development. Both commercial and R&D executives must stop giving automatic priority to "sexy" new NCEs and NBEs over lifecycle extension efforts. The typical rationale is that NCEs and NBEs are the future and that line extensions lack strategy. That is false. In fact, the latter may have earlier and more certain market impact.

Line extensions are part of protecting and building a hard-won franchise. Often, when companies trade off valuable line extensions for more risky new products, they fail to ensure funding for important line-extension activities. The two should not be mutually exclusive. Executives need to balance those interests and their impact on returns, costs, risks, and timing and use the best evaluation tools to do so. That means protecting their portfolio investment opportunities by growing and protecting franchises as well as by creating new markets.

Integrate marketing and R&D during development. Involvement of a company's commercial groups is critical to developing the best PLM approach. Marketing executives traditionally pay scant attention to early-stage drug discovery activities. To provide high-quality input and strategies, most companies need to greatly enhance connectivity between these two halves of the company. Earlier commercial involvement will ensure that more attention is placed on how to create PLM product ideas through form and formulation opportunities.

Integrate lifecycle management into product planning. PLM must be integral to the process of drug development and not just an add-on a few years before patent expiry. Ideally, companies should consider PLM during the target validation period pursue it aggressively thereafter.

They should:

  • Refine and integrate late-stage drug discovery and early development plans with product lifecycle plans.

  • Modify stage gates to include consideration of projects' lifecycle potential.

  • Consider product lifecycle options at each stage of development, not only in Phase III. In the earlier phases, companies should consider follow-on targets, based on the target family opportunities, and follow-on compounds. In Phase III, as success seems more assured, companies could explore follow-on indication and form and formulation opportunities.

  • Refine portfolio and productivity management systems to reflect the lower risk and faster return of PLM efforts. Allocate enough R&D budget to line extensions, which have lower risks and faster returns.

  • Improve functional acceptance. Too often, R&D functions are not interested in PLM and would rather work on novel compounds. In addition, the technologies are rejected and seen as threatening by the very R&D and formulation groups that could best use them. To move forward and exploit new opportunities for growth, companies must change any destructive, not-invented-here attitude.

  • Improve partner relationship management. Many key technologies come from companies outside Big Pharma. To move projects forward successfully, Big Pharma must work seamlessly across teams and functions, both internally and with partners.

  • Reward successes for product lifecycle management "genius." Too often, R&D incentives, such as professional recognition, patents, and financial rewards, favor those who come up with NCEs and NBEs. But companies should reward all contributions to product success, including pursuit of opportunities through inventive use of PLM tools and techniques.

Companies that follow those guidelines can greatly expand their ability to explore new product forms and formulations to build, sustain, and preserve their product franchises. But to succeed in today's marketplace, they must plumb the opportunities inherent in the full range of product lifecycle management. In the face of competitors' aggressive attempts to sidestep or overtake originators, few companies can afford not to.