In part 5 of our 6 part series, Optimizing the Pharma Brand Life Cycle At Every Phase, we explore the use of email before a pharma product encounters the loss of exclusivity. The ability to anticipate the drop in market share allows the brand to develop a highly targeted email campaign to reach and engage key opinion leaders before the patent cliff.
Few things strike fear into the hearts of pharma execs like the dreaded patent cliff. When a name-brand drug hits the patent wall, the original manufacturer loses its exclusive patent rights to the drug, opening up the market to generics. Also known as the loss of exclusivity (LOE), the patent wall has the potential to obliterate a manufacturer's market share.
While it once took months for a name-brand drug to lose its market share to generics, name brands now experience precipitous declines in a matter of days. The LOEs most illustrative of this phenomenon happened to Prozac and Lipitor. In 2001, Eli Lilly's blockbuster, Prozac, reached the patent cliff. When Fluoxetine hit the market at a lower cost, Prozac's market share dropped precipitously right off the bat, losing 73 percent of its share of new prescriptions in just two weeks.
Similarly, Pfizer's Lipitor lost exclusivity in 2011. The effects were immediate and devastating. Within one week, Lipitor lost half its market share. Within 30 days, Lipitor had lost 80 percent of its market. The drug went from generating $12.9 billion in 2006 sales to just $2.06 billion in 2014 sales. Most of the loss occurred within the first two years following LOE.
While a loss of market share upon LOE is inevitable, the drop doesn't have to be catastrophic. Pharmas can buffer against the patent cliff by developing a sound pre-generic marketing strategy three to four years prior to LOE.
Drive Market Share before the Patent Cliff to Help Slow the Share Loss
Even the most brilliant marketing strategy can't prevent a sales drop associated with an impending patent expiration. However, by driving market share as high as you can beforehand, you can help slow/delay sales from falling as low as they otherwise would. In other words, the first part of your pre-generic strategy is a market-shift build. Prepare for the patent cliff by extending your market share and solidifying your contracts. Admittedly, the higher you grow the market, the steeper the fall, but you're falling from a higher plane, elevating the bottom of the cliff.
Use every available resource at your disposal, especially the cost effective and highly targeted email channel to engage with your key stakeholders. Along with relationship building, email will continue the brand’s “value based” dialogue preceding and leading up to loss of patent. As you begin to redeploy your ever limited resources, well thought out, strategically driven email communications can help “fill that gap” and help control, if only for a time, share loss.
Initiate Defensive Strategies to Hold Your Ground
A more defensive approach, the second part of your pre-generic strategy is building up enough assets in the market to prevent customers from switching to the new generic brands.
For example, you've probably noticed more Celebrex ads on TV lately. Unsurprisingly, Pfizer’s Celebrex – a $4 billion brand – will have a generic competitor in the marketplace soon. Pfizer aims to build the association between Celebrex and pain management in preparation for the generic launch. Then, when the generic arrives, Pfizer will use an email campaign to offer copay max cards and other forms of discounts. These incentives keep the cost of name-brand Celebrex close to the generic to keep customers loyal to the brand.
Sales will always suffer at the patent cliff, but smart email marketing can help pharma brands mitigate the erosion of market share following LOE. A pre-generic strategy that focuses on market-shift build and brand loyalty with incentives will ease the sales plummet.