Artificial Intelligence to Navigate Loss of Exclusivity in Pharmaceuticals

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, maximising 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.

Introduction

When a new prescription drug is launched, the pharmaceutical innovator holds exclusive rights to develop, sell, and market the drug during the patent period, typically lasting 10 to 15 years. After this period, the brand faces loss of exclusivity (LOE), relinquishing its monopoly and preparing for the entry of lower-cost generic (Gx) alternatives. This significant milestone requires a comprehensive adjustment in brand strategy.

Defensive strategies, such as intellectual property (IP) litigations and patent extensions, are often the first recourse prior to LOE. However, once these legal options are exhausted, the impact of Gx entry on sales volume can be immediate and substantial. To mitigate this, companies can maximise the revenue potential of the brand through line extensions and leveraging brand loyalty.

This necessitates strategic planning around commercial priorities and close coordination with other functions, akin to the launch phase of the drug. When extracting further value from the brand is no longer viable, companies typically switch patients to next-generation or over-the-counter (OTC) products, gradually sunsetting the original brand.

As a pharmaceutical company approaches the LOE, it must also navigate a highly competitive landscape where market dynamics rapidly shift in favour of cost-effective alternatives. This transition phase demands a proactive approach, integrating market access strategies with advanced analytics to anticipate and respond to competitive pressures.

Understanding prescriber behaviour, payer influence, and patient adherence becomes critical in retaining market share. Moreover, effective communication with healthcare providers and stakeholders is essential to maintain the brand’s value proposition during this pivotal period.