PHARMACEUTICAL LIFECYCLE MANAGEMENT MAKING THE MOST OF EACH AND EVERY BRAND

Tony Ellery Ellery Pharma Consulting Magden, Switzerland

Neal Hansen Datamonitor Limited London, United Kingdom

©WILEY A JOHN WILEY & SONS, INC., PUBLICATION

CONTENTS

ACKNOWLEDGMENTS

"

INTRODUCTION PART A LIFECYCLE MANAGEMENT BUSINESS ENVIRONMENT 1. Challenges Facing the Branded Drug Industry 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8

1.9

Depleted NME Pipelines/Lower R&D Efficiency Higher Development Costs Safety Concerns Tougher Environment for Pricing, Reimbursement, and Listing Increased Competition Earlier Genericization Faster Sales Erosion Following Patent Expiry Poor Image of Branded Drug Industry 1.8.1 Prosperity of the Branded Drug Industry 1.8.2 Lack of Innovation 1.8.3 Marketing Spend and Tactics 1.8.4 Safety Issues 1.8.5 Keeping Generics Off the Market Diversification

2. The Life Cycle of Industries, Technologies, and Brands 2.1 2.2 2.3

Diffusion of Innovations The Lifecycle Curve Lifecycle Phases 2.3.1 Development Phase 2.3.2 Introduction Phase 2.3.3 Growth Phase 2.3.4 Maturity Phase 2.3.5 Decline Phase

xvii xix

1 3 4 8 9. 12 16 17 18 20 21 22 22 .. 23 24 26 30 30 32 34 34 35 35 36 36 vii

viii

CONTENTS

3. The Life Cycle of a Pharmaceutical Brand 3.1

3.2

3.3

Lifecycle Curve of Pharmaceuticals 3.1.1 Slow Rate of Growth during the Growth Phase 3.1.2 Lack of a True Maturity Phase 3.1.3 Precipitous Decline Phase Factors Affecting Rate of Conversion to Generics 3.2.1 Government Policy 3.2.2 Disease 3.2.3 Size of Brand :.. 3.2.4 Hospital versus Nonhospital Drug Usage 3.2.5 Active Substance and Other Barriers to Entry The Life Cycle of a Pharmaceutical Brand

PART B LIFECYCLE MANAGEMENT REGULATORY AND LEGAL ENVIRONMENT 4. The Generic Approval Process 4.1 4.2 4.3

United States Europe Japan

5. Hatch-Waxman Legislation and Its Effects on LCM 5.1 5.2 5.3 5.4 5.5

Hatch-Waxman Act of 1984 Medicare Modernization Act of 2003 FDA Amendments Act of 2007 Ql Program Supplemental Funding Act of 2008 Discussion of Hatch-Waxman Legislation

38 41 42 43 43 44 44 44 45 45 46 46

55 57 57 59 61 62 62 64 65 66 66

6. U.S. Health-Care Reform 2010

69

7. European Sector Inquiry

72

PART C

PATENTS AND EXCLUSIVITIES

8. Patents and Other Intellectual Property Rights 8.1 8.2 8.3

Nonpatent Intellectual Property Rights What Are Patents? What Is Patentable? 8.3.1 Patentable Subject Matter 8.3.2 Novelty

77 79 79 81 83 83 84

CONTENTS

8.4 8.5 8.6 8.7 8.8 8.9 8.10

8.11 8.12

8.3.3 Inventive Step 8.3.4 Utility 8.3.5 Disclosure ., How Long Does a Patent Last? Patent Term Restoration in the United States Supplementary Protection Certificates in Europe Patent Term Extension in Japan How Are Patents Obtained? Patent Enforcement Types of Patents . 8.10.1 Composition of Matter Patent 8.10.2 Medical Use Patent 8.10.3 Formulation Patent KSR versus Teleflex—Raising the Nonobviousness Bar Patent Strategy

9. Nonpatent Exclusivities 9.1 9.2 9.3 9.4 9.5 9.6 9.7

NCE Exclusivity (United States) New Clinical Study Exclusivity (United States) Data and Marketing Exclusivity (Europe) Data Exclusivity (Japan) Orphan Drug Exclusivity Pediatric Exclusivity 180-Day Generic Product Exclusivity

IX

85 86 86 87 87 88 89 89 91 92 93 93 94 94 96 99 99 100 100 101 101 103 105

10. Patent Settlements

107

PART D

113

DEVELOPMENTAL LCM

11. Strategic Principles of Developmental LCM 11.1 11.2 11.3 11.4

Developmental LCM Goal 1: Provide a Meaningful Improvement in Clinical Profile Developmental LCM Goal 2: Increase the Potential Real-World Patient Potential for the Brand Developmental LCM Goal 3: The Ability to Generate an ROI Developmental LCM Goal 4: The Ability to Enhance Market Exclusivity of the Brand Franchise

12. Indication Expansion and Sequencing 12.1

Categories of Indication Expansion

115 116 118 120 121 123 123

X

CONTENTS

13. Patient Subpopulations and Personalized Medicine 13.1 13.2 13.3

What Does a Good Patient Selection Strategy Look Like? \ Patient Selection without Predictive Criteria: Post Hoc Approaches What about the Patients Who Are Not Selected?

14. New Dosage Strengths, New Dosage Regimens 14.1 14.2

New Dosage Strengths New Dosage Regimens

,

15. Reformulation, New Routes of Administration, and Drug Delivery

131 135 138 139 140 140 141 143

15.1

Reformulation and New Routes of Administration 15.1.1 Switch and Grow Strategy 15.1.2 Expand and Grow Strategy 15.1.3 Generic Defense

143 143 145 145

15.2

Drug Delivery Devices

149

16. Fixed-Dose Combinations (FDCs) and Co-Packaging

152

17. Second-Generation Products and Modified Chemistry 17.1 Isomerism 17.2 Polymorphism 17.3 Salts, Ethers, and Esters 17.4 Prodrugs and Metabolites

159 160 161 162 163

18. Other Developmental LCM Strategies

165

18.1 18.2 PART E

Manufacturing Strategies White Papers and Citizen Petitions COMMERCIAL LCM

19. Strategic Principles of Commercial LCM 19.1 19.2 19.3

Commercial LCM Goal 1: The Ability to Drive Widespread and Preferential Patient Access to the Brand Commercial LCM Goal 2: The Ability to Defend Market Access and Formulary Position Commercial LCM Goal 3: The Ability to Optimize Profitability of the Brand Franchise

, 165 166 167 169

170 170 171

CONTENTS

20. Geographical Expansion and Optimization 20.1 20.2

Geographic Expansion Harmonization and Rationalization

21. OTC Switching 21.1 21.2 21.3 21.4

What to Switch: Choosing the Best Approach Where to Switch: Dealing with Intermarket Variability When to Switch: Balancing the Product Life Cycle? How to Make the Switch Successful: What Corporate Support Is Required? " -

XI

172 174 175 178 179 181 183 184

22. Brand Loyalty and Service Programs

186

23. Strategic Pricing Strategies

190

23.1 23.2

Pricing Strategy and Tactics in the Launch and Growth Phases Pricing Strategy and Tactics Following Patent Expiry

24. Generic Strategies and Tactics Building a Generic Portfolio: Old versus New Thinking 25. Exit Strategies Executing the Exit Strategy

190 193 198 202 204 206

PART F BIOLOGICS AND BIOSIMILARS

207

26. Biologies and LCM

209

26.1 26.2 26.3 26.4

Emergence of Biotech Some Definitions 26.2.1 Biologies ; Uptake and Value of Biologies LCM of Biologies 26.4.1 Next-Generation Biologies 26.4.2 Reformulation 26.4.3 Indication Expansion 26.4.4 Self-Injection Devices

27. Biosimilars and Their Impact on Biologic LCM 27.1 27.2

Changing Terminology: Biogenerics, Biosimilars, and FOBs Why Are Biosimilars a Big Deal?

209 210 210 211 213 213 214 215 215 217 217 219

XN

CONTENTS

27.3 27.4

27.5

27.6 27.7

27.8 27.9

How Are Biosimilars Different? Biosimilar Approval Pathways 27.4.1 Biosimilars in Europe 27.4.2 Biosimilars in the United States 27.4.3 Biosimilars around the World Substitution of Biosimilars 27.5.1 Automatic Substitution 27.5.2 Therapeutic Substitution , Innovator Responses to Biosimilar Threats The Future for Biologies LCM - 27.7.1 Legal Strategies in the United States 27.7.2 Indication Expansion in Europe 27.7.3 Brand Loyalty Programs and Services The Emergence of the "Innovasimilar" Biopharma Company Final Words

220 220 220 221 222 223 223 224 225 226 227 228 229 229 231

PART G THE INTEGRATED BRAND LCM STRATEGY AND ITS IMPLEMENTATION

233

28. Strategic Goals of LCM Brand Plans

235

28.1 28.2 28.3

Position to Market Comparative Clinical Profile versus Gold Standard Level of Market Unmet Need

235 237 237

29. Ten Keys to Successful LCM Excellent Functional Expertise 29.1.1 Patent Attorneys 29.1.2 Regulatory Affairs 29.1.3 Clinical Development 29.1.4 Formulation Scientists 29.1.5 Marketing and Sales 29.1.6 Manufacturing 29.2 Visible Management Support 29.3 Unambiguous Ownership 29.4 An Early Start 29.5 A Robust "Broad to Bespoke" Process 29.6 Focus on "High LCM Value Brands" 29.7 Adequate Resources 29.8 Measurements and Rewards 29.9 Training and Support 29.10 Realism

238

29.1

.,. '•'!}'•';

238 239 240 240 241 242 243

244 245 246 248 249 250 250 252 252

CONTENTS

30. Organizational Structures and Systems for Ensuring Successful LCM 30.1

30.2 30.3 30.4

Organization of Project and Brand Management 30.1.1 Functional Structure 30.1.2 Project Structure 30.1.3 Matrix Structure Project and Brand LCM Structures LCM Center of Excellence Composition of the LCM CoE

31. The LCM Process: Description, Timing, and Participants 31.1 31.2 31.3

Purpose of the LCM Process Timing of the LCM Process Description of the LCM Process

XiM

254 254 255 255 257 259 263 266 268 268 269 271

PART H INTEGRATING LCM WITH PORTFOLIO MANAGEMENT

277

32. Principles of Portfolio Management

279

33. LCM Projects in the Development Portfolio

284

34 Managing Established Brand Portfolios

286

34.1 34.2 34.3

What Do You Do with a Priority Established Brand? What about the Nqnpriority Brands? Building the Ideal Established Brands Portfolio

288 289 290

CONCLUSIONS

291

APPENDK: CASE HISTORIES

294

A.I

A.2

Market and Product-Shaping Dynamics in Action Alzheimer's Disease Therapies: Aricept®, Exelon®, and Reminyl®/Razadyne® Learnings Optimizing Clinical Profile versus Gold Standards Angiotensin II Receptor Blockers (ARBs): Cozaar®, Micardis®, and Benicar® Learnings '

294 294 297 298 298 299

XiV

CONTENTS

A.3

A.4

A.5

A.6

A.7

A.8

A.9

A.10

A.11

A.12

A.13

A.14

Partnering to Ensure Reimbursement and Collection of Cost-Effectiveness Data Aricept .. Learnings Active Metabolites and Late-Listed Patents Buspar® Learnings A Fixed-Dose Combination (FDC) That Could Not Fail, or Could It? Caduet® Learnings Indication Expansion Certican®/Zortress® and Afinitor® Learnings Killing a Franchise through Over-the-Counter (OTC) Switching Claritin® Learnings Moving FDCs to the Fore in Diabetes Diabetes Therapies: Glucophage®, Avandia®, Actos®, and Januvia® Learnings FDCs and Multiple Dosage Strengths Diovan® and Tekturna®/Rasilez® Learnings Building a Compliance Support Program Enbrel® Learnings Targeting Responders with High-Price Cancer Agents Erbitux® Learnings \ Failure of a "No-Brainer" LCM Strategy Exubera® Learnings At-Risk Launches and Prodrug Patents Famvir® Learnings New Dosages, FDC, and Patent Litigation Fosamax® Learnings

299 299 301 301 301 303 303 303 304 305 305 306 307 307 308 308 308 310 310 310 312 312 312 314 314 314 315 315 315 319 320 320 321 322 322 324

CONTENTS

A. 15 High Regulatory Hurdles for Lifestyle Drugs Girosa® Learnings , A.16 Big Money from Orphan Indications Gleevec® Learnings A. 17 Not Giving Up on a Controversial Brand Iressa® Learnings A.18 Expanding a Medical Aesthetics Franchise with an Ophthalmic Drug Latisse® Learnings A.19 Patent Expiry of the Biggest Drug Brand Ever Lipitor® ^ Learnings A.20 Early Out-Licensing by Biotech: Take the Money and Run Macugen® Learnings A.21 Codevelopment and Comarketing Deals End in a Megamerger . Merck and Schering-Plough: Zetia®/Vytorin® and Claritin/Singulair® Zetia/Vytorin Claritin/Singulair ' Learnings A.22 A Hugely Successful LLCM Switch Strategy: Business Needs and Reputational Issues Collide Prilosec® and Nexium The Facts The Public Reaction Learnings A.23 Combining Production Outsourcing with Settlement with a Generic Competitor Nexium Learnings A.24 Reformulating for Success in Osteoporosis Osteoporosis Drugs: Fosamax, Actonel®, Boniva®, and Aclasta® Learnings

XV

325 325 327 327 327 329 330 330 332 332 332 334 335 335 336 336 336 338 338 338 339 342 343 344 344 344 345 347 349 349 351 351 351 353

XVi

CONTENTS

A.25

Isomerism, Polymorphism, and Settlements Plavix® Learnings A.26 Payers versus Brand for Patient Selection Plavix and Brilinta Learnings A.27 Litigation Can Delay Generic Entry in the OTC Field Too Prilosec OTC Learnings A.28 Inconsistent Court Decisions Can Hurt Both Brand and Generic Companies Protonix® Learnings Holding on to an Antipsychotic Franchise A.29 Risperdal®/Invega® Learnings A.30 LCM Creates an Almost Immortal Brand Voltaren® Learnings A.31 LCM of a Women's Health Franchise The Yasmin® Family Learnings A.32 Indication Expansion/New Dosage Strength Zometa/Reclast® (Aclasta) Learnings INDEX

354 354 355 356 356 357 358 358 359 360 360 361 362 362 363 364 364 365 366 366 368 369 369 370

371