Patent Expiry and Pharmaceutical Market Opportunities at the Nexus of Pricing and Innovation Policy - Innovation and Marketing in the Pharmaceutical Industry - page 254

both pre and post expiry. We then briefl y investigate how promotional activities and
newer product branding actions such as advertising and product confi guration
impact the behavior of patients exposed to such innovations. We further consider
other bodies of literature to learn how researchers beyond the management academy
view intellectual property options and how they may be integrated to sustain the
market premiums of the original innovation beyond the end of the patent life.
Finally, we will examine how these theories are applied in two distinctly different
pharmaceutical product categories, namely the markets for gastroesophageal refl ux
disease and neurological medicines. Refl ecting on these fi ndings the article will
offer observations useful to practitioners and researchers.

9.2 Literature Review

What does the academic and professional literature say about the options that phar-
maceutical marketing professionals have when they are planning for the inevitable
market entry of generic price-based competition? 1 In order to address this question
we will fi rst explore the general rules of the market game from the perspective of
regulatory measures, property-based exclusions and licensing options and other tac-
tics that can be deployed to slow down the entry of the generics. Related literature
on pre and post expiry pricing (Jain 2010 ; Eliashberg and Jeuland 1986 ; Kamien and
Zang 1999 ) promotion, e.g., advertising and effects of direct to consumer (DTC)
media and product extensions, new disease indications, new molecules etc. and pill
color or packaging will then be reviewed. The relevant literature on value transfer-
ence, an integrated approach to sustaining the differences associated with the inno-
vation of the original molecule, will be discussed. Finally the execution of the above
pharmaceutical marketing options will be examined in a number of contexts.

9.2.1 The Ground Rules of Pharmaceutical Competition

A selection of the literature characterizing the options that pharmaceutical marketing
professionals may consider when anticipating the market entry of generic competi-
tion is given in Table 9.1 . In what follows the tactical implications of each option
listed in the table are discussed.

1 To address this question it is helpful to consider the marketing mix management variables of
product, price, promotion, and place (Kotler 1988 ). In the pharma context the place variable is
constrained to the dispensation system of established prescribers (doctors) and dispensers (phar-
macists) in most countries. The mix variables that have the potential to be varied and hence man-
aged are product (alter or improve the formulation/extend), promotion (DTC advertising and
aggressive detailing to doctors), and or price. In the context of the US market, product, and promo-
tion activities are both government regulated and require considerable advanced planning.