Biomedical Engineering Reference
In-Depth Information
increasing impact of generics, has lead fi rms to increasingly focus on lifecycle
extensions. The academic literature reviewed in this chapter has focused mainly on
the determinants and consequences of generic entry. Strategies to extend the drug's
lifecycle have received less attention. Further research in these areas is warranted to
increase our understanding of how various strategies work, which strategies are suc-
cessful, and why they are successful. Future research can utilize the enormous
amounts of data available on drugs. The FDA Orange book contains detailed infor-
mation for each branded and generic drug, including the approval and expiry date
for every patent, the manufacturer, the form of the drug, line extensions, and com-
bination drugs. The FDA website contains information on extra indications and
label changes for every drug. Organizations such as the Tufts Center for the Study
of Drug Development and the Kaiser Family Foundation have extensive data avail-
able on, respectively, approved drugs in the United States and Europe, and health
outcomes. Data providers like IMS Health, Kantar Media, and Wolters Kluwer have
detailed information on sales, price, and marketing expenditures. While detailed
information on sales and marketing is often limitedly available, publicly available
data at a more aggregate level is provided by, for example, IMS Health and
http://
Marketing strategies to extend the lifecycle of drugs nearing patent expiry can
benefi t from the extensive literature on marketing strategies in other industries.
Insights on optimal pricing, promotion, and divestiture paths can be derived using
theoretical models and dynamic empirical models. However, a large cross-sectional
research on various moderators of pricing and promotion strategies around patent
expiry is necessary. Such as study should explore how the success of these market-
ing strategies depends on the competitive landscape, trademarks of the branded
drug, brand loyalty, chronic or acute disease, insurance type of patients, etc. Branded
generics are a longer-term strategy which has already received some attention in the
literature, but a large-scale empirical study that measures its impact in practice is
valuable. Switching a prescription drug to become available over the counter
requires the combination of different data sources and is a topic with ample oppor-
tunities for future research.
For the R&D strategies, many open areas for future research exist. In addition to
extra research on the what-question—what strategy should a fi rm use and what is
the impact of such a strategy—the when-question is very important. When should a
fi rm implement the reformulation or combination drug to maximize the return on
investment? Is it optimal to make a combination drug available when the single
components are still under patent, or should a fi rm launch it near the patent expira-
tion date of a single component? Research on the market impact of reformulations,
combination drugs, and next-generation product is lacking in general. They are all
a form of line extensions and questions on brand name, spillover effects in market-
ing, and cannibalization are important for future research to address.
Legal lifecycle extension strategies are also widely used by pharmaceutical
fi rms. Marketing research can benefi t from an improved understanding and clear
outlining of how the regulations on patent extensions and market exclusivity impact
fi rms decisions.
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