Developing A Successful Anti-Generic Strategy Through Trademarks
“Discovering, developing, and testing a new medicine has rightly been described as the riskiest research process in the world…. One harsh reality: about half of all new drug candidates fail in the late stages of clinical trials after the bulk of research and development costs have been incurred.” So stated the Pfizer 2004 annual report.
Fifteen years after this statement, the risks associated with drug manufacturing have expanded rather than shrunk. Fred D. Ledley, M.D., director of the Center for Integration of Science and Industry at Bentley University in Waltham, Mass, writes “the often bandied 12-year timescale should be taken with a “grain of salt”. The total development journey is closer to 30 years”.
With the enormous investment required to develop new drugs, having an effective trademark and branding strategy is vital. Patents, although crucial to allow initial recapture of the funds invested in research and development, eventually expire. Regularly, loss of patent protection negatively impacts a pharmaceutical company’s bottom line. Although generic versions of a particular drug must be bioequivalent to the brand name product: equivalent in ingredients, dosage, strength, safety, and intended usage, manufacturers of the generic drug, having not incurred the research and development costs, can undercut the pioneer company, damaging the value of the original brand name.
Old strategies, poor results
Until recently, the strategy adopted by pharmaceutical companies was to abandon promoting a drug once its patent was close to expiring. A few years prior to expiration, sales and marketing teams were deployed to promote protected products, or the company would launch its generic version of the unprotected drug.
However, industry strategies are changing. Rather than jettisoning support of a product, pharmaceutical organizations are choosing to invest in developing strong brands which can withstand the onslaught of cheaper generic products.
The first step towards brand protection is applying for and securing effective trademarks.
The Viagra story of success
There are arguably few people in the world who would not recognize the name Viagra and immediately link it to an erectile dysfunction remedy drug. The product has been an enormous success for Pfizer, bringing in tens of billions in revenue since its 1998 debut.
In December 2017, generic versions of Viagra became available, lowering the cost. But the brand name is still incredibly strong, and Pfizer enjoys mostly worldwide trademark protection, the exception being China. A Chinese company, Guangzhou Viamen Pharmaceutical Company (Viamen), owns Weige, meaning “Great Older Brother” and Pfizer owns Wai Aike (万艾可), a transliteration of Viagra that has no meaning in Chinese.
Testing the strength of the Viagra brand will begin after the final patents expire in 2020. Pfizer has spent many years planning for this eventuality and has developed a bond of trust with consumers over the past two decades.
New strategies for a global-facing world
Trademarks provide the ability to secure and increase brand equity. Rebecca Robins in Building better brands: brand lifecycle management, myth or reality? states:
“As equity in the brand name can be leveraged, so can equity in the brand identity as a whole, including the visual component of the brand, such as use of colour and shape. AstraZeneca’s purple pill migration from Prilosec to Nexium can be seen to have become a benchmark of this within the industry.”
Protecting the investment and resources needed to create a new drug requires pharmaceutical companies to have a global trademark strategy in place that can be launched on the completion of clinical trials.
Consumer tastes and knowledge have standardized thanks to the Internet providing a global marketplace. Therefore, it now makes sense to redeploy investment and resource into fewer products which have the potential for global reach. By employing an effective trademark strategy, including ensuring successful registration in China, a drug’s profitability can remain long after its patent has expired.
Pharma Webinar with Q&A
Tiffany Walter, Head of Pharma Trademarks at F. Hoffmann-La Roche joins us tomorrow, Thu Sep 26th at 9.30AM CT / 3.30PM CET, in a discussion on effective management of trademarks in the Pharma industry.
During the webinar we will share our data insights into recent Pharma trademark activity. Tiffany Walter will expand on the main challenges of of trademark management, including issues related to trademark screening and filing, as well as brand protection.