Practical Defense Strategies for Combating Generics Competition

This publication has been discontinued on December 21, 2011.

Introduction

Abstract

Introduction:

Can branded pharmaceutical companies ever win the war against generics? No. But they can win some of the battles. Growing pressures on innovator companies means that innovator companies are becoming more inventive in searching for blockbuster products--which in turn increases the pressure on generics companies to find ways of bypassing new defense barriers. Now, innovator companies can choose from among a variety of specific, practical tactics to defend themselves from the threat of generics--either by defending the company as a whole or by defending key individual products that come under attack.

Get the Answers You Need to Shape Your Strategy:

• In May, 2007, after previously enjoying success from its diversification into generics, Merck KGaA sold its generics business to Mylan for $6.6 billion. What strategy is Merck KGaA now taking to help avoid the threat of generics and help define its future?
• Medco Health Solutions, a pharmacy benefits manager, has been looking forward to the 2007 expiries of patents on ten major branded drugs. Which of these drugs has Medco singled out as providing huge savings after patent expiry?
• Biological products present several barriers to companies wishing to manufacture imitations. Thus, an increased focus on biologics--such as vaccines, protein products, and hormones--can help a branded company move its product assortment out of the range of generics companies. Which companies have already switched their R&D focus to biologics? What barriers must generics companies overcome if they wish to play the biologics game. Which generics players are most likely to overcome these barriers?
• Originator companies have embraced the use of authorized generics; however, in early 2007, the FTC recommended legislative changes after examining the issue of authorized generics. What lies ahead for this popular tool?
• Innovator companies are more risk averse than they used to be; the latest trend has been for companies to contract out some of their R&D risk by cooperating with other R&D specialists--including generics companies. Which R&D company is at the top of the list of generics companies tapped by Big Pharma for their R&D capabilities?

Scope:

Importance of defense strategies: the slowing pace of NCE introductions; generics penetration in the United States, Europe, and Japan; lessons from the loss of patents to Pfizer' s Norvasc and AstraZeneca' s Prilosec; patent expiries due in 2007 on ten major brands.

Company-based defense strategies: mergers, increased emphasis on biologics R&D, contract research, and acquisitions of generics companies.

Product-specific defense strategies: adding patents to existing products; developing new isomers and enantiomers of existing products; introducing new versions, formulations, and combinations of existing products; adding new indications for existing products; switching products from prescription basis to OTC; pursuing litigation; launching or supplying authorized generics.

Outlook: threats to authorized generics; cooperation between innovator companies and generics companies; the swing to biological research.

Table of Contents

• Executive Summary
  • Strategic Considerations
  • Stakeholder Implications
• Importance of Defense Strategies
• What Does Pharma Stand to Lose?
• Overview of Potential Strategies
  • Company-Based Strategies
    • Mergers
    • Increase Emphasis on Biotech R&D
    • Improved Productivity and Reduced Risk Through Contract Research
    • Acquisition of a Generics Company
  • Product-Based Strategies
    • Additional Patents
    • New Isomers or Enantiomers
    • Modifi ed-Release Versions and Alternative Delivery Methods
    • Combination Products
    • New Indications/Switch to Over-the-Counter Promotion
• Litigation
  • Prospects for Success in the Courts
  • Authorized Generics Strategy
    • Is It Better to Litigate or Settle?
    • A Useful Short-Term Strategy
    • Challenges to the Authorized Generics Strategy
  • European Strategies
• Outlook

Tables

• 1. Sales of the Four Largest Domestic Generics Manufacturers in Japan, Fiscal Year Ended March 2006
• 2. Select Generics Defense Strategies
• 3. Generics Companies Bulk Up, 2006
• 4. Product-Specifi c Defense Strategies
• 5. Branded Drugs Authorized as Generics in 2006

Figure

• 1. Worldwide Share of Generics Market by Value of Sales, 2006
• 2. Blockbusters Facing Patent Expiry in 2007 (with 2006 Worldwide Sales)
• 3. New Chemical Entity (NCE) Launches, 1990-2005
• 4. Approvals of New Biopharmaceutical Products in the United States, 1990 Through October 2006
• 5. Ideal Timeline for Extending a Product' s Lifecycle
• 6. Authorized Generics Agreements, 1998-2006

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