"Combating Generics: Pharmaceutical Brand Defense" is the most recent study conducted by Cutting Edge Information. The study focuses on the range of legal- and product-based strategies available to pharmaceutical companies to combat competition from generic-drug manufacturers. A survey by Cutting Edge revealed that approximately 71% of drug companies have used legal battles to defend their patents since 2000.
Manufacturers of branded drugs lose an estimated 15% to 30% of their market share when the first generic version of a drug enters the market. Sales fall lower by as much as 75% to 90% when other companies introduce subsequent generics.
The report, published in January 2004, gives an in-depth look at strategies including developing, franchise and line extensions, Rx-to-OTC switching, and market-crossover tactics. When courts rule a patent unenforceable or when litigation becomes too costly, a majority of companies look to defensive pricing strategies or allot more money to advertising and patient-outreach programs. Many innovative alternatives allow companies to buy time.
Four main core areas are covered in the report: strategic planning; life-cycle management and portfolio planning; key trends and industry development; and generic-company profiles. Additionally, the report highlights 5 critical principles for success for brand companies: