Patent Expiry and Pharmaceutical Market Opportunities at the Nexus of Pricing and Innovation Policy - Innovation and Marketing in the Pharmaceutical Industry - page 260

Aside from regulatory and or patent actions, 4 additional steps to delay generic
entry include:

1. Monopolizing the supply of key ingredients (Labaton 2000 ). Note this approach
works better for larger bioactive molecules (Coan and Ellis 2001 ).
2. Lobby congress to grant patent term extensions (Schacht and Thomas 2002 ;
Paige 1997 ). Very unlikely this will be possible going forward.
3. Pay the generics to not enter the market once they have an approved ANDA
(Gold 2001 ; Rosenthal 2002 ).

An incumbent pharmaceutical companies marketing power can also be extended
by clever brand and trademark management (Conley and Szobocsan 2001 ). Drug
brand equity such as color or shape that is developed pre patent expiry may be used
to move or transfer the prescription preferences of a brand loyal population from the
original drug to a new patented drug (Conley et al. 2008 ). The brand equity thus acts
as an agent of transference to migrate the brand loyal population to the new drug. 5

9.2.2 Perspectives from the Economics and Legal Literature

In discrete industries like chemicals and pharmaceuticals, the leveraging of intel-
lectual property rights can be very effective. The pursuit of multiple intellectual
property regimes (patents + marks + copyrights + secrets etc.) can be coordinated
over the life cycle of a particular offering to build and sustain the functional advan-
tages of the original offering. Using large scale survey methods examining compa-
nies from a variety of industries in Europe, Japan, and North America, Granstrand

4 Beyond the FDA marketing exclusivities outlined above, incumbent fi rms also have the options to
extend their pre-expiry market advantages through patents that are invented and fi led subsequent
to the original molecule patent. While scaling to production there may be new inventions and pro-
cess patents on the methods of fabrication that are relevant to effi cient scale production of the NDA
approved drug. These process patents will have an expiry date years beyond that of the molecule
patent and are listed on the FDA orange book (orange book reference here). All interested generic
providers who may fi le an ANDA can see the process patents related to the NDA approved drug
via orange book (available online). Generic fi rms need to certify in their ANDA application that
production of the bioequivalent product that they seek to have approved has avoided the infringe-
ment of valid orange book patents (Hill 2005 ).
Patents on reformulations of the active ingredient can also lead to market place exclusivities of
a sort, at least to the extent that patients using the older formulation can be switched to the new,
patent protected formulation pre-expiry of the older formulation patent (Yoshitani 2007 ). This
tactic is central to life cycle planning for a portfolio of products or for a drug offering in a particular
class and may play into pricing strategies.
5 Appropriately defi ned brand equity such as color or pill shape can be registered as a trademark
(see Table 9.2 ) with a life that can be indefi nite assuming continuous use of the mark (Conley and
Orozco 2005 ). These same trademark rights can be bundled into licensing agreements that can
have regional and or global specifi city to help with the controlled expansion of the drug to multiple
markets (Downing 2003).