Specifically loss of exclusivity will kill profit which only the affs extension of the effective patent term can solve.

Managing Director, Health Sciences & Wellness, Ernst & Young LLP, Eduardo Schur EY US Health Sciences & Wellness Commercial Strategy & R&D Lead, and Shashank Rao Senior Director, EY-Parthenon, Ernst & Young LLP “Drive commercial success by effectively navigating loss of exclusivity” JAY-HOCH

In brief

Pharmaceutical companies are facing major headwinds due to loss of exclusivity (LOE) as product patents are set to expire, with billions in sales at stake.

While sunsetting products is not new, maximizing value in today’s environment requires a strategic approach.

Savvy industry leaders are aligning sales, marketing, legal and other functions to reduce costs and drive value at the end of a product’s lifecycle.

When a new prescription drug is launched by a pharmaceutical company, the innovator maintains the exclusive legal right to develop, sell and market the drug during the patent period, generally around 10 to 15 years, depending on the drug type. After that period concludes, the brand faces loss of exclusivity (LOE) and is bound to relinquish monopoly while getting ready for the entry of several lower-cost generic (Gx) alternatives. This natural and inevitable milestone signals a dramatic shift and thus requires careful adjustment of brand strategy from all aspects. Defensive strategies, such as intellectual property (IP) litigations and patent extensions, are usually the first options that are deployed prior to LOE. However, when the innovator company exhausts legal and IP options, the effect of Gx entry on volume can be immediate and severe. The Gx impact can, however, be softened if the company is able to maximize the revenue potential of the brand through line extensions and by capitalizing on the brand’s stickiness. This approach requires strategic planning around commercial priorities, in close coordination with other functions, similar to how companies execute the drug launch phase. In cases where companies can no longer extract value from the brand, they usually look to switch patients to either a next-generation product or to an over-the-counter (OTC) product, while gradually sunsetting the original brand. With US$356 billion of worldwide branded sales at risk from patent expiration during the period from 2023 to 2028,¹ this paper aims to take a deeper look into the nuances involved in helping innovators continue deriving value from their brands by tailoring market access, sales and marketing strategies.