Patent Expiry and Pharmaceutical Market Opportunities at the Nexus of Pricing and Innovation Policy - Innovation and Marketing in the Pharmaceutical Industry - page 269

in patent or trademark prosecution/enforcement matters and likewise the USPTO is
not involved in drug market entry approval or marketing exclusivity decisions. The
Hatch Watchman extension for NDA review delays is the only exception. These deci-
sions are patent term-related and are made at the USPTO. Hence there are two regu-
lating agencies between which a particular fi rm can arbitrage a range of exclusivities
and or patent grants/term extension to fend off price-based competition for the great-
est period of time (Yoshitani 2007 ).
Note also that marketing exclusivity terms awarded by the FDA govern what can
be advertised about a drug to consumers or healthcare professionals. When issued,
the owner of a FDA marketing exclusivity is the only fi rm that can advertise the
approved drug to the market for the approved category/disease indication. All ANDA's
or approvals of generics of the drug in the category in question are delayed until
the exclusivity term expires.
Note that neither patent monopolies nor marketing exclusivities keep physicians
from prescribing drugs “off label” or for a disease indication that is not approved by
the FDA (Salbu 1999 ). While this may be risky for the doctor “why did you pre-
scribe a drug that was not approved?” it is not illegal. Off label prescriptions are not
something that can be directly infl uenced by direct to consumer advertising, detail-
ing to doctors or controlled through patent enforcement litigation. Note that some
authors suggest that expedited orphan drug review can be used to get approval for a
drug whose real market potential is for non-orphan disease indications that are as
yet underserved in the broader market. Hence the Orphan Drug process may be used
as a Trojan horse of sorts to get the drug into the market place and subsequently
supported by off label prescription sales (Fugh-Berman and Melnick 2008 ).

9.3 Empirical Evidence

As described above there are a number of policy options and marketing mix variables
that can be managed over the life cycle of a drug to minimize the revenue impact of
patent expiry illustrated in Fig. 9.1 . In what follows, we present empirical evidence
of how two fi rms attempted to proactively manage the patent expiry event.

9.3.1 AstraZeneca, Prilosec, and Nexium

An interesting example of comprehensive pharmaceutical marketing planning and
execution can be found in Astrazeneca's management of offerings in the gastro-
esophageal refl ux disease (GERD) drug category over the past 23 years (Conley
et al. 2006a , b ). In the late 1980s the target population of acid refl ux 11 patients was

11 Gastrointestinal track acid refl ux or “Heartburn” is a symptom of GERD.