The upcoming pharmaceutical patent cliff is rapidly approaching, which means many pharmaceutical companies must be prepared for a loss of exclusivity (LOE), which can bring millions, if not billions, in lost sales to such a company. For instance, Evaluate Pharma is expected in 2014 to have nearly $70 billion, or 40 percent of its brand drug sales lose their patents, subsequently exposing those sales to dramatic reductions. This is just one example. To better illustrate the influence that LOE can have on a company and its pharmaceutical drug sales, let's dive deeper into the potential outcomes that these companies will face in 2014, and how pharma marketers can best prepare for the cliff.
The Patent Cliff
The concept of the patent cliff came about with the expected expiration of patented pharmaceutical drugs in 2014, 2015, and 2016. The patents on drugs like Abilify and Gleevec are expected to lose patent protection in 2015, as well as Crestcor and Benicar in 2016. The patents for these drugs will all expire in this time period causing concern for their manufacturers. For companies like Evaluate Pharma, it could mean a sudden drop off in sales, but if the company's marketing team acts swiftly and accordingly, LOE does not have to cause as much of a loss in sales as is predicted.
While generic prescription drug makers like Actavis, or Mylan, are set to capitalize most from the patent cliff, just because a patent on a drug is set to expire does not mean the company with the patent must lose out entirely, it just needs to vamp up marketing efforts.
How Pharma Marketers Can Prepare for LOE and the patent cliff
Taking a page out of the marketing handbook for a generic drug manufacturer, one way to potentially weather a loss in sales during the patent cliff is to, well, think like a generic drug maker. In other words, sell your patented drug as the alternative. Sure your brand may be more expensive, but you have a competitive advantage in the market: people know your brand name opposed to the drug's generic name.
Another method is to focus your marketing efforts on the angle of quality. As mentioned, your brand is likely synonymous with quality, because up until its patent expires, there simply will not be any alternative to compare it to. At least initially, it is best to work this angle, and then, when, or if, a generic brand establishes itself as a legitimate competitor, providing comparable quality, then you can consider marketing with a different angle.
Outlook Moving Forward
Some industry experts expect Actavis, a generic drug maker to boost its annual sales by more than 20 percent in 2014 due to the LOE on several major patented brand name drugs. While some could see this patent cliff as having the reverse effect on the companies whose patents are expiring, which may be true to a certain extent, however, it is not entirely true. These companies will still likely sell considerable quantities just not as much as they did with a patent intact. Plus, if their marketing efforts work to reduce some of the fallout, by, in some cases, marketing as a generic drug maker would, and in other cases, focusing on quality as a competitive advantage opposed to a cheaper selling price. In terms of weathering the pharmaceutical drug patent cliff, it is also important to keep in mind the new patents and drugs that are going to be established this year, as well as in coming years to fill the void of the loss of exclusivity on the expired patents.
Without question, marketers certainly have their work cut out for them preparing for the pharmaceutical drug patent cliff, and its single biggest year in 2014. With that said, using some of the previously mentioned tactics, these marketers can and should be able to ultimately weather the storm by implementing either a strategy of emulating a generic drug maker's marketing efforts, or conversely, focusing on the quality of their drug as a competitive advantage opposed to a lower selling price.
To learn more about how the patent cliff will impact pharmaceutical marketing as a whole, join your peers at the iPharma 2014, May 8-9th in New York City.
(Image courtesy of h-monk via Flickr)