Loss of exclusivity does not mean the complete loss of an income stream as drug patent expiration approaches.
Steps taken two years before loss of exclusivity can maximize brand value in the meantime.
But the arrival of competitors means something different with pharmaceuticals than it does with other types of consumer products. The concepts of brand affinity and brand equity in the pharmaceutical industry are different from other industries.
Many insurers have mandatory generic substitution built into their policies, and insurance benefit structures favor generics over branded competitors. Furthermore, there are more generics available now than ever before, and consumers are used to using them.
Nevertheless, there are many things pharmaceutical brands can do to soften the landing from the so-called “patent cliff.” Here are six ways brands can maximize product value as loss of exclusivity approaches.
1. Start Early, No Matter What
Ideally, pharmaceutical brands should develop their loss of exclusivity strategy for a product starting at least two years before drug patent expiration. Such a strategy can be started any time before loss of exclusivity, but waiting until the last minute will reduce the effectiveness of efforts to build drug brand affinity.
2. Shore Up Patient Loyalty, Brand Equity
Several key factors influence drug brand affinity. The following factors make it easier for brands to build and strengthen affinity:
- The drug is used to treat a chronic condition. Affinity is driven by familiarity and through retention of existing patients, which is easier than acquiring new ones.
- The drug alleviates symptoms. Simply put, when patients feel better after taking a medication, they are likelier to be loyal to the brand.
- It’s a lifestyle drug. Lifestyle drugs are rarely covered by insurers, so patients who use them are accustomed to paying full price for the medicine.
- The drug offers a unique patient experience. If, for example, a drug delivery system means only taking a drug once per day rather than several times, customers are likelier to prefer it.
- The drug has unique therapeutic attributes. Sometimes switching patients to another brand is medically risky. Hence, brand affinity is likelier.
Certain types of drugs tend to have higher brand affinity.
3. Explore Possibilities for an Over-the-Counter Version
Releasing an OTC drug allows brands to access a broader range of customers and alleviates concerns about insurer reimbursements. There are costs of taking a drug OTC, of course, but often these costs can be greatly offset by the expansion of the market.
4. Enter the Generics Market Yourself
Drug companies that create their own generic for a drug facing loss of exclusivity can mitigate the impact of the patent cliff. There are several types of generics, and each company must decide which is best:
- Branded generics – creating a generic drug that is given its own brand and sold at a lower price than the original
- Authorized generics – providing a private-label company with a generic manufactured by the branded company’s own manufacturing facilities
- Licensed generics – contracting with a generic competitor to produce the generic, thus allowing the generic competitor to enter the market earlier than would otherwise be possible
5. Develop a Novel Drug Delivery System
Innovations in how drugs are delivered can keep generic competition at bay. For example, the manufacturer of antipsychotic drug Risperidone methodically developed longer and longer-acting versions, one of which only has to be administered four times per year. The advantages in terms of patient compliance can make the branded drug clearly preferable over generics that do not offer the same long-term advantages for patients.
6. Sunset the Brand
Sunsetting a brand means suspending marketing and sales activities and adjusting inventory levels. The drug remains on the market, but without its previous marketing and sales activities (and associated costs). This allows the drug manufacturer to minimize expenditure while maintaining a presence in the market. It is often the preferred loss of exclusivity strategy in cases where there are a high number of generics and directly competing with them isn’t practical.
Brand affinity is a key influence in a drug manufacturer’s strategy when facing drug patent expiration. High brand affinity makes OTC options more promising, while low brand affinity makes the launching of generics or sunsetting the brand the better option. In some cases, brands can develop innovations that allow the brand to outcompete generics. Whatever a particular drug brand’s best option, it pays to start planning early, and to regularly monitor the market for changes that may affect their loss of exclusivity strategy.Copyright © DrugPatentWatch. Originally published at 6 Ways to Maximize Product Value as Loss of Exclusivity Approaches