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Secrets of a youthful brand

Published on 12/04/05 at 04:54pm


Today, more than ever before, the pharmaceutical industry is constantly being reminded that a blockbuster drug's days are numbered and that the hour of the generic drug is nigh.

With a staggering $80 billion worth of products facing patent expiration by 2008, fewer drugs in the pipeline, greater generic competition and decreasing revenue and growth rates, the pharma industry is facing a huge challenge.

This is compounded by the fact that generics' growth easily outstripped branded drugs partly assisted by government measures designed to drive down the cost burdens of medicines.

In January this year, Business Insights published a report, Generics Defence Strategies: Effective Brand Protection through Patent, Formulation, OTC and DTC Strategies which revealed that 27% of branded pharma executives believe that over 25% of the turnover of their top three brands are at risk from generic competition in the next five years.

Most alarmingly, over 22% of executives said that their company does not have a defence strategy in place. Furthermore, despite strong evidence that generics companies emerge more favourably than branded pharma companies from patent challenges, aggressive legal defence is the most favoured brand defence strategy.

Given that a modern drug can cost around $800 million to develop, no brand manager worth his or her gold, should sit back and accept declining revenues with a 'that's life' shrug. While brand leaders can do little to change the overall pattern, they do have the power to extend their product lifespan, and stave off generic competition, in order to maximize their ROI - the question is, how?

The life of a brand

Darius Naigamwalla, a consultant with Campbell Alliance, explains that a brand lifecycle progresses through four key phases.

"The first phase is marked by a rapid uptake at launch, after which comes a steady growth phase. Stage three sees revenues peak at maturity which is followed by stage four - that is, a decline in revenues."

Many consultants believe that a realistic approach to maximising profit potential is to have a long-term strategy from the start of a product lifecycle. However, given that the first phase of the lifecycle is marked by the launch, this may be too late.

Brand managers have a greater chance of keeping their product alive, by executing an effective strategy long before a drug hits the market. But how long before it hits the market?

Rick Keating, president and chief executive of Keating & Co, a strategic communications firm, advises that companies should start the branding process as early as possible.

"To keep the branding fresh, you need to go through a great deal of research, focus groups and trial and error," says Keating.

"Give yourself the time you need, by starting as early in the drug development process as possible, to develop the right brand."

Campbell Alliance's Naigamwalla agrees that starting the branding process early gives a product a better chance of long-term survival and recommends starting the process early in the drug development programme, which "gives the brand management team the best possible chance of coming through with an effective strategy".

Rebecca Robins, global marketing director at Interbrand Wood Healthcare, and co-author of the book, Brand Medicine: The Role of Branding in the Pharmaceutical Industry, agrees that companies should be starting the brand development process earlier than before, and says that some companies are now starting to embed processes and protocols for brand development within their organisations.

"As companies are no longer able to rely on a stream of blockbusters, they are recognising brands and branding as a source of value creation, which means that they are looking hard and fast at the benefits of early-stage branding. Many of the larger companies are now thinking about branding as early as phase II," she says.

"Investment in branding at this stage is, necessarily, a question of risk management, one which is all the more heightened for smaller speciality/biotech companies, who may be commercialising their products. However, I would counter that there are greater risks to be run in the missed opportunities of seating a brand with key stakeholders in the lead-up to launch and in ensuring that a brand is optimised at launch."

Even for those companies who regard investment in early branding as a high risk activity, looking ahead is vital.

Craig Mills, director of brand planning at PAN Advertising, believes this hasn't happened often enough. In other words, companies frequently fail to define the brand's platform.

"Companies often tend not to look at brand values early enough. For example, when a product is launched, awareness is driven on a rational basis, but if we spent more time on both the intangible and tangible values associated with a product upfront, we would have a firmer brand presence in people's minds down the line. This would mean being in a stronger position in the face of generic competition."

Be proactive, not reactive

Knowing not just how but when brand managers need to revitalise their brand is key, so what are the indications that it's time to inject some energy into a brand?

Clearly, declining revenues are a glaring sign, but if brand managers leave it until this stage it is probably too late to pick the brand up, dust it down and start all over again. Instead, brand managers should be proactive and manage and maintain the brand while it is still on patent, rather than waiting until the competition has already made its move.

Mills believes there are a number of questions brand managers can address in order to determine whether their brand is in a need of a little ip and tuck such as:

  • What does the market need - has it shifted?
  • How are the communications performing?
  • Are messages recalled and persuasive?
  • What is the internal/external feedback like?
  • What are the competitors doing? Are we still differentiating ourselves?
  • How long have we been doing what wee doing? Is the current approach 'tired'.

Naigamwalla asserts that one proactive strategy for keeping a brand at the top of the list is ensuring that the product remains at the forefront of doctors' minds and the way to achieve that is through new and interesting data.

"It is essential to provide new and meaningful data to physicians. If not, you seriously run the risk of another company taking over your space. Sales reps should always have new and interesting data to present."

Seek out new indications

Many would argue that the most effective way of extending the life of a brand and helping it realize its maximum revenue potential, not to mention providing new and interesting data to doctors, is through identifying and evaluating new indications.

Naigamwalla argues that seeking out new indications is not only realistic, but essential, and believes brand teams should explore growth opportunities and exploit them aggressively. By applying a systematic methodology, brand teams will be better equipped to enhance revenue while avoiding costly mistakes.

During the past few years, the marketing of older drugs under new indications has become more and more commonplace. Examples include Eli Lilly's Sarafem (fluoxetine) a medication which was originally indicated as a pediatric growth hormone and which is now being used to treat body wasting.

Also consider the case of Alliance Pharmaceuticals' Symmetrel (amantadine). The company determined its potential as an anti-influenza antiviral and subsequently created Lysovir, an influenza-specific brand of amantadine. And it didn't stop there - Alliance also identified Symmetrel as a neuroprotective NMDA antagonist in the treatment of Parkinson's disease and, as a result, Symmetrel achieved double digit sales growth.

One of the great line extension success stories, however, has been that of Aventis' ACE inhibitor, Tritace (ramipril). During the last decade, the ACE inhibitor market was centred around the management of hypertension, of which Tritace held only a 10% market share. However, in 2000, data from the Heart Outcomes Prevention Evaluation (HOPE) study was published which proved Tritace (10mg) reduced cardiovascular risk in high-risk patients aged 55 and over.

In fact Tritace was shown to reduce the relative risk of heart attack by 20%; death from cardiovascular problems by 26%; and stroke by 32%. As a result, Tritace became completely redefined. In other words, it went from being a humble hypertension drug, to one that could reduce cardiovascular events. In America, where it is jointly marketed by Wyeth and King Pharmaceuticals as Altace, it became the number one prescribed name brand in its class among cardiologists and endocrinologists.  

The above examples represent cases where line extension not only boosted revenues but also provided clear benefits to doctors and their patients - a fact which should not be overlooked. According to Robins line extension can be effective and, in many cases, essential, but should not be seen as an 11th hour panacea for patent loss.

"As brand managers have invested in the initial development of brands, so they should be investing in maintaining and managing a brand throughout its life - extending a brand should be part of the long-term strategy of maximising the brand's lifecycle.

"Leveraging the value of line extensions has long been established in the fast-moving consumer goods industry. Extending the lifecycle of a brand is becoming a vital means of exploiting the equity of established brands in our industry, which is faced with the ongoing challenge of a finite patent life and the increasing challenge of generic entrants which are coming to market harder and faster than ever before," says Robins.

"Companies are looking to new formulations, dosages and innovative delivery systems as ways to 'add value' and keep the brand alive. Claritin is a good example of this, which has been extended to include, amongst others: Claritin RediTabs, Claritin Syrup and Claritin-D 24 Hour."

Patent dispute a concern for new formulations

Although expanding the use of a product into new indications, is a savvy and popular method of adding value to blockbuster brands, a Reuters report, Patent Protection Strategies, points out that line extensions do not offer the same level of protection as reformulations, especially in an increasingly pro-generic environment, "because there is potential for off-label prescribing of generic versions of the original compound, as well as branded drugs in the same class".

The combination of a drug delivery technology with a patented active substance creates a new formulation of the original product, and in recent years pharmaceutical companies have been able to extend a drug's commercial shelf-life through such novel formulations. In fact, new formulations of existing drugs accounted for more than 50% of all NDAs approved by the FDA in 2002.

Despite the enthusiasm for reformulating best-selling brands, a case between Eli Lilly and the Israeli generics company, Teva Industries, that went through the European Court of Justice (ECJ) last year, could cause concern to companies that use reformulation as a way of extending the patented lifespan of their medicines.

Teva and Eli Lilly have been locked in a patent dispute relating to the reformulation of Prozac (fluoxetine). In 1999, the UK Medicines and Healthcare products Regulatory Agency (MHRA) ruled that Lilly's liquid formulation of Prozac was still covered by formulation patents, despite the fact that the patent on fluoxetine had already expired.

However, Teva is seeking to overturn the patent on the liquid formulation. The main issue is thought to be that the liquid formulation is not sufficiently indistinct from the original dosage form, and does not qualify as being novel and according to speculation, Teva looks set to win its appeal. A report in The Wall Street Journal has suggested that this case could set a precedent in which companies find it difficult to defend patents based on reformulation.

Nevertheless, the fact remains that many drugs have undergone reformulation and as a result extended their patent life.

Consider the HIV arena: one of the first drugs to undergo reformulation was Hoffmann-La Roche's protease inhibitor, saquinavir. Invirase, the original formulation of saquinavir, was repackaged into capsules made of soft rather than hard gelatine and is now sold under the name of Fortovase.

Bristol-Myers Squibb's Videx (didanosine) has gone through a number of reformulations, starting with the company reducing the size of the 100mg tablets and adding an orange flavour, followed by the development of 200mg tablets. The company subsequently received approval for enteric-coated Videx (VidexEC), a capsule to be taken once daily without chewing or dissolving in water.

It's not only the HIV treatment scene that has experienced an upsurge in reformulations. Bristol-Myers Squibb's diabetes drug, Glucophage, was brought back from the brink by reintroducing it as Glucovance, an improved version with a brand new patent.

AstraZeneca breathed life into Prilosec, the world's top-selling drug in 2000, when it lost its patent protection, by bringing out the next generation but chemically identical drug under the name of Nexium.

Clearly, there are several strategies companies can employ to revitalise their brands and maximise revenue generation and they must determine what works best for them.

Ultimately, in order for companies to keep their treasured brands fresh, they must keep an ear to the ground and an eye on the markets  to boost the chances of their product living a long and healthy life.

"It's about staying relevant," says Mills. "Maintain enthusiasm for the brand from both an internal and external customer perspective and address the needs of the market. By listening to what customers want, you can understand how to energise the brand."

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