Life Cycle Management Strategies Optimizing revenues and defending generic competition

GBI059CBR July 2015

Table of Contents • • • • • • • • •

Executive Summary Introduction Overview of Product Life Cycle Product Life Cycle Curve Objectives of Life Cycle Management (LCM) Classification and Benefits of LCM Strategies Strategic Planning for LCM Factors Impacting Choice of LCM Strategies Developmental Strategies

• Multiple Developmental Strategy Approach • Commercial Strategies  Rx-to-OTC/BTC Switch  Geographical Expansion  Pricing Strategy and Tactics

 Pricing Strategy for Targeting Multiple Indications  Coupons  Co-pay Cards

 Awareness, Brand Loyalty and Service Programs

• Regulatory and Legal Strategies

 Indication Expansion/Sequencing and Repositioning  Authorized Generics  Patient Subpopulations and Personalized Medicine  Legal Defense and Pay for Delay  Citizen’s Petition  Reformulation  Patent Term Extension and Market Exclusivity  New Dosage Forms  New Route of Administration  Special Cases

 New Dosage Strengths and Regimen  Fixed-Dose Combination and Co-packaging  Next Generation Products and Modified Chemistry  Metabolites  Chiral Switching  Polymorphs

• The Pharmaceutical Pipeline and LCM • Successful Implementation of LCM Strategies • Appendix

Executive Summary • With shrinking R&D pipelines and increasing time and costs involved in drug development, companies need to maximize revenue and the lifespan of their portfolios to compete in the cost-constrained healthcare market by implementing suitable Life Cycle Management (LCM) strategies at the right time. • There is a strong need to overcome impending challenges such as brand erosion, weak portfolios and the stringent regulatory atmosphere in the pharmaceutical industry. • Successful LCM planning commences early in the life cycle of a drug, ideally during the R&D phase. Multiple factors such as timing, disease characteristics and market environment should be considered when choosing an LCM strategy. • This report discusses the key LCM strategies – which can be categorized into developmental, commercial, and regulatory/legal strategies – by providing detailed case studies for each. 

Developmental strategies are implemented to significantly increase revenue along with the patent duration/market exclusivity period. These strategies include indication expansion, sequencing and drug repositioning, patient subpopulation, personalized medicine, reformulation, new dosage strengths/regimen, Fixed-Dose Combinations (FDC), co-packaging, next-generation products, and modified chemistry.



Commercial strategies help in increasing the uptake and commercial value of the product. These strategies include Prescribed (Rx) to Over the Counter (OTC) switch and Behind the Counter (BTC) switch, geographical expansion, pricing strategies, brand loyalty, awareness , and service programs.



Regulatory/legal strategies intend to maximize the protected life of the drug, thereby increasing the revenue. These strategies include authorized generics, legal defense, pay for delay, citizen’s petition, patent term extension, and market exclusivity.

Classification and Benefits of Life Cycle Management LCM strategies Developmental strategies Indication expansion/sequencing Product repositioning Patient sub-population Reformulation

Commercial strategies

Regulatory/legal strategies

New dosage strengths/regimen

Over the Counter (OTC)/Behind the Counter (BTC) switch

Fixed Dose Combination (FDC)

Geographical expansion

Next-generation product

Significant revenue increase for extended time period with developmental strategies

Pricing strategies Awareness programs

Revenue

Increased commercial value of the product with commercial strategies

Authorized generics Legal defense and pay for delay Citizen’s petition Patent/exclusivity extension

Extension of patent duration/market exclusivity with regulatory/legal strategies Revenue generated during a typical PLC without LCM strategies

Time

FDA Approvals: Pediatric Use 2014–May 2015 Drug

Applicant

Indication

Date of approval

Migraine

April 16, 2015

Perennial and seasonal allergic rhinitis

March 23, 2015

Perennial and seasonal allergic rhinitis

March 23, 2015

Treatment of cancer (recurrent ependymoma)

March 18, 2015

Schizophrenia and bipolar disorder

March 3, 2015

Adjunctive treatment of seizures associated with Lennox-Gastaut syndrome

January 13, 2015

Acute otitis externa

August 25, 2014

Attention deficit hyperactivity disorder

October 17, 2014

Autism and autism spectrum disorder

June 16, 2014

Allergic conjunctivitis

December 16, 2014

Prevention of postoperative nausea and vomiting and chemotherapy-induced nausea and vomiting

April 10, 2014

Treatment to reduce blood phenylalanine levels in patients with hyperphenylalaninemia due to BH4responsive phenylketonuria

March 13, 2014

‡ A second period of pediatric exclusivity was granted for this moiety; earlier pediatric use approval was granted for different indications

Life Cycle Management and Reformulation • In the past decade, 60% of applications received by the FDA involved molecules that were previously approved.

Importance of reformulation

• Development of a new drug and obtaining a patent require huge investments in capital and time, while with reformulation, a novel product can be launched with less time and money, expanding its PLC. • A perfect reformulation strategy is one that is advantageous for all stakeholders.

Without reformulation

With reformulation

Many candidates

Many candidates

Fewer candidates approved

More candidates approved

Peak revenues eroded by early generic competition

Peak revenues higher and sustained for longer Payer/patient Sponsor/company Physician

Next Generation Product – Chiral Switching AstraZeneca’s Nexium (esomeprazole) The success of Nexium was based on several key factors: •

•

It was launched prior to patent expiry of first-generation product – Nexium launched in March 2001, well before generics entered the US market (late 2002) and generic omeprazole didn’t enter the US market until December 2002 The key advantages of single enantiomer versions are:  Reduced adverse

events

 Increased potency

(with lesser dose)

 Reduced drug-drug interactions

Moreover, chiral switching can also provide benefits such as more selective pharmacodynamic profile, less complex pharmacokinetic profile, and improved therapeutic index. However, with these advantages, companies are increasingly developing single enantiomer drugs as first-generation products in order to compete effectively.

Revenue ($bn)

•

7 6 5 4 3 2 1 0

Global revenue

2000

2001

2002

2003

2004

2005

Nexium

2006

2007

Combined

2008

2009

2010

Losec

2011

2012

2013

2014

Multiple Developmental Strategy Approach: Abbott’s Tricor Revenue of Tricor series

1.0

XX XX

XX

XX

XX

XX

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

0.0

1999

0.5

1998

Revenue ($bn)

1.5

XX

XX XX XX XX XX

1998

1999

2000

2001

2002

2003

XX 2004

2005

2006

2007

2008

2009

2010

2011

2012

Lowering triglycerides Lowering low-density lipoprotein FDA-approved indications

Raising high-lipoprotein Co-administration with a statin

2013

2014

Life Cycle Management Strategies of Pipeline Products– GlaxoSmithKline Oncology

Respiratory

Indication expansion

FDC

Tafinlar + Mekinist NSCLC, rare cancers and metastatic melanoma, adjuvant therapy Tafinlar + Mekinist + Panitumumab Colorectal cancer Revolade/Promacta Acute myeloid leukaemia and myelodysplastic syndromes Arzerra Chronic lymphocytic leukaemia and follicular lymphoma Votrient Renal cell cancer, adjuvant therapy

Fluticasone furoate + Umeclidinium Asthma COPD overlap syndrome Indication expansion Relvar/Breo Ellipta COPD – mortality outcomes Relenza i.v. Influenza

Immuno-inflammation and neurosciences Indication expansion Benlysta Transplant rejection, systemic lupus erythematosus, vasculitis and myaesthenia gravis Ofatumumab Neuromyelitis optica and multiple sclerosis

Dermatology Rare diseases Indication expansion Volibris Chronic thromboembolic pulmonary hypertension

Note: Pipeline as of April 30,2015

FDC Umeclidinium Hyperhidrosis Chlorhexidine Umbilical cord care Ofatumumab Pemphigus vulgaris Toctino Chronic hand eczema

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