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As pharma research and development (R&D) becomes increasingly expensive, we explain why making the most of ‘mature’ brands through bespoke, effective strategies takes on greater significance.

Continued innovation is key to pharmaceutical companies being able to develop safer and more effective drugs that deliver better patient outcomes. However, development is expensive with the average cost per new prescription drug totalling over $2.5bn, when failures and capital costs are accounted for. R&D expenses reflect this, with many of the largest pharmaceutical companies spending almost 20% of their revenues on R&D – far higher than in other industries.

This focus on pipeline and newly-launched products means that mature brands approaching loss of exclusivity (LOE) must often operate with significantly reduced resources.

“Our support following transition is focused only on critical activities to ensure
patient safety and regulatory requirements are continued.”

Senior Medical Leader of a top 10 pharmaceutical company

Non-essential activities are closed, teams are downsized and personnel transitioned to newer drugs, often taking with them important customer, product and disease area knowledge. The perception of mature brands as less innovative and exciting, and therefore less important to patients and clinicians, can also result in a lack of attention both internally and externally.
What is often not fully appreciated is the value that these older products continue to deliver from a clinical, strategic and financial perspective. If appropriately managed, mature brands can:

  1. Continue to hold significant market share and generate sizeable revenues. Historically, brands have successfully retained 30 – 40% of their market share in the US, several months after generic entry through the implementation of both offensive and defensive strategies and tactics 36% of the top 100 best-selling brands in the US are in their peri-LOE phase (1 – 2 years before or after LOE)
  2. Act as a bridge between company and customer to sustain customer relationship and engagement prior to the launch of follow-on molecules, minimising the time and effort required to re-establish them
  3. Improve portfolio breadth and depth by providing a greater selection of treatment options for patients, healthcare professionals and payers. This enhances competitive differentiation and secures market position by enabling more options for innovative contracting.

However, if a selective, intelligent investment strategy for mature brands is not developed and implemented, market share may deteriorate more rapidly than anticipated in the face of increasing competitive pressure. Furthermore, the lack of attention to healthcare providers and patients due to inadequate resourcing can damage customer perception of the company, potentially impacting the success of future product launches.

While selected strategies and tactics can maintain the value of brands as they lose market exclusivity, specific viable approaches can differ based on a myriad of market characteristics and product attributes. For example, in markets with guidelines that favour generic usage (eg. automatic substitution by pharmacists) and for which there is a low level of brand loyalty among customers, it makes little sense to maintain in-person promotion prior to generic entry. Instead, profitability can be maximised prior to LOE by decreasing promotion levels, and the launch of a branded generic following this point might be considered to maintain market share at a lower price. Conversely, if a product is particularly complex to manufacture, an increase in both in-person and multichannel promotion during the peri-LOE period (1 – 2 years before or after LOE) might be an appropriate strategy, with messaging focusing on brand quality and reputation. An individualised assessment is therefore crucial to ensure that protection strategies are selected appropriate to the brand and its market situation.

About the authors
Sean Cheng is Senior Consultant and Charlie Hewitt is Senior Analyst at InterPhase Consult, an Ashfield company part of UDG Healthcare plc.

To find out more about InterPhase Consult and how it’s supported mature brands and portfolios with measureable impact, please contact sean.cheng@interphase-global.com, or visit www.interphase-global.com.

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