SOURCE: Cutting Edge Information

Cutting Edge Information

August 02, 2011 09:11 ET

Defensive Pricing and Patent Litigation Are Favored Counter-Generics Strategies, for Now

Cutting Edge Information's Study Finds That Short-Term Strategies Are Giving Way to Long-Term Strategies

RESEARCH TRIANGLE PARK, NC--(Marketwire - Aug 2, 2011) - Short-term strategies, such as patent litigation and defensive pricing, have been the most popular counter-generics tactics for pharmaceutical brand teams to pursue in the last four years, according to research from Cutting Edge Information. 57 percent of brand teams facing generic copies implement defensive pricing strategies, while 60 percent pursue patent litigation.

Both strategies can be initiated within the last two years of a branded drug's patent life. "Many of the short-term strategies companies employ are effective and relatively inexpensive," said Ryan McGuire, senior analyst at Cutting Edge Information. "Line extensions can offer high reward as a counter-generics strategy, but that should not come at the expense of short-term marketing solutions such as defensive pricing."

The recent study, "Countering Generic and Biosimilar Threats: Near-Term and Long-Term Strategies," shows that the counter-generics story does not end with short-term strategies. Benchmark partners reported that, although they are more inexpensive, short-term tactics do not deliver as high a return on investment as more difficult long-term strategies, such as line extension, can provide.

Line-extension strategies, such as new formulations and new indications, require more time for successful execution. Planning for new formulations begins an average 5.7 years before patent expiration and requires an average of 35 months to impact market performance. New indication strategies require brand teams to begin planning an average six years before patent expiry and take at least 32 months to fully execute.

Although line-extension strategies take longer, new formulations, new indications and next-generation drugs rank as the first, second and third most popular counter-generics strategies that companies will be employing between now and 2013. While executives expect to see increases in the use of these three long-term strategies, the use of short-term strategies such as litigation and defensive pricing are each expected to drop by 8 percent.

"Countering Generic and Biosimilar Threats: Near-Term and Long-Term Strategies," available at, examines counter-generics task forces and ad hoc teams who come together to guide generics defense strategies. Benchmark findings include an in-depth analysis of 12 key tactics to combat generics, complete with investment, ROI/results data, case studies, and brand profiles to support these teams in planning for maximum lifecycle profitability. The study also provides metrics and strategic recommendations for proactively reviewing potential biosimilar competition.

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