OCTOBER 01, 2006

Over half of the brand name drug manufacturers responding to a recent industry survey admitted to using patent litigation and other antigeneric "defense strategies" to protect their pharmaceuticals from generic competition. Almost the same number—39%—told researchers at Cutting Edge Information (CEI) that they had resorted to the use of authorized generics during the past 3 years to maintain market share as their drugs lost patent protection.

Launching new product formulations was "the most popular generics defense strategy" adopted by the 33 branded pharmaceutical companies surveyed. About 82% of these manufacturers "marketed new formulations to extend patent life in the face of pending patent expirations."

Another 55% were able to stave off generic competition by securing FDA approvals for new indications for their drugs, while 27% secured pediatric extensions to prolong patent life for their products.

Seven out of 10 manufacturers surveyed said they resorted to "defensive pricing" to protect their branded products, while 18% told the researchers they had engaged in "serious pursuit of OTC status" for their drugs in response to imminent price competition from generic versions.

Those findings, part of a report entitled Combating Generics: Pharmaceutical Brand Defense for 2007, suggest that the nation's branded drug companies are engaging in a broad range of activities to reduce or eliminate competition from generics pharmaceutical producers. Significantly, researchers at CEI said the use of strategies such as establishing generics subsidiaries or marketing authorized generics is frowned upon by many in the brand name drug industry.

"Survey respondents pointed out these options are extremely unpopular within brand and life-cycle management groups, as they do little to retain market share and product revenues," the researchers said. "The decisions to pursue these options are often handled outside of day-to-day brand management, and they are seen as a method for giving generics competitors unnecessary inroads into valued markets at the cost of branded companies."