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Lifecycle management for pharmaceuticals is different from lifecycle management of other products. Drugs have not one, but three distinct lifecycle periods:
Furthermore, unlike most consumer products, the developmental and pre-marketing phase for drugs is highly regulated, complex, and lengthy - often lasting a decade or more. Pharmaceutical companies typically want to make the most out of the first two periods of a drug's lifecycle, because once a drug patent expires, generics often enter the market, and the competition brings prices down significantly. Drug makers can, however, prepare for the drug patent "cliff" and maximize all three stages of the product's lifecycle. Here are 6 steps pharmaceutical companies can take to do that.
Preparation for generic competition should begin early - ideally prior to the brand's market launch. But few pharma companies prepare for generics this early, with most waiting until only a few years remain before the drug patent cliff is reached. Be assured that the most aggressive generic pharmaceutical makers prepare well in advance of patent expiration, procuring active ingredients as soon as the brand name product reaches the market.
Pediatric exclusivity is a late stage lifecycle management technique that works out best for established, first-line treatments. By running a pediatric clinical trial with the FDA's approval, a manufacturer can earn an extra six months of market exclusivity whether or not the drug turns out to be effective in children. With blockbuster drugs, the money that can be earned during this extra six months of exclusivity alone can more than offset the cost of the clinical trial.
Strategic pricing isn't only for late stage lifecycle management, but is something that can be implemented earlier, helping manufacturers solidify their market share beyond drug patent expiration. Rebates and other co-pay agreements help drug lifecycle management teams keep their branded products competitive as generics enter the market, and build stronger customer loyalty. Strategic pricing should be explored early enough in the drug lifecycle to include a full pricing study to maximize chances of the desired outcome.
Branded pharmaceuticals tend to stand up better to generic competition when there is something that sets them apart from the generics. For example, a branded drug that comes with dedicated patient support services is more likely to retain its value in the face of generic competition. Product-plus-service "bundling" is worth exploring for some branded drugs.
Branded drugs with dedicated patient support services tend to fare well in the face of generic competition
One tactic that has been successfully used by branded pharmaceutical products is drug patent extension based on new drug indications or altered formulation. While this can put off patent expiration to some extent, it won't extend drug patent protection indefinitely, so it's still important for manufacturers to plan carefully for coping with the approach of the patent cliff.
As branded drugs reach market maturity and patent expiration looms, companies can shift away from expensive personal pharmaceutical representation and toward less expensive digital and remote marketing strategies. Not only will manufacturers spend less on marketing established drugs, they free up resources for more intensive marketing of newer products.
There's no reason for pharmaceutical companies to stop promoting products when drug patents expire. By preparing for the inevitable patent expiration early on and maximizing every stage of the drug's lifecycle, it's possible to minimize the effects of generic competitors and extend the effective product lifecycle. As more branded pharmaceutical makers start planning for generic competition earlier in product lifecycles, expect these branded products to remain stronger as investments for longer periods, even in the face of generic competition.