STUDY IDENTIFIES WIDESPREAD ANTIGENERIC PRACTICES

Over half of the brand name drug manufacturersresponding to a recent industrysurvey admitted to using patent litigationand other antigeneric "defensestrategies" to protect their pharmaceuticalsfrom generic competition. Almost thesame number—39%—told researchers atCutting Edge Information (CEI) that theyhad resorted to the use of authorizedgenerics during the past 3 years to maintainmarket share as their drugs lostpatent protection.

Launching new product formulationswas "the most popular generics defensestrategy" adopted by the 33 branded pharmaceuticalcompanies surveyed. About82% of these manufacturers "marketednew formulations to extend patent life inthe face of pending patent expirations."

Another 55% were able to stave offgeneric competition by securing FDAapprovals for new indications for theirdrugs, while 27% secured pediatricextensions to prolong patent life fortheir products.

Seven out of 10 manufacturers surveyedsaid they resorted to "defensivepricing" to protect their branded products,while 18% told the researchersthey had engaged in "serious pursuit ofOTC status" for their drugs in responseto imminent price competition fromgeneric versions.

Those findings, part of a report entitledCombating Generics: PharmaceuticalBrand Defense for 2007, suggest that thenation's branded drug companies areengaging in a broad range of activities toreduce or eliminate competition fromgenerics pharmaceutical producers.Significantly, researchers at CEI said theuse of strategies such as establishinggenerics subsidiaries or marketingauthorized generics is frowned upon bymany in the brand name drug industry.

"Survey respondents pointed outthese options are extremely unpopularwithin brand and life-cycle managementgroups, as they do little to retainmarket share and product revenues," the researchers said. "The decisions topursue these options are often handledoutside of day-to-day brand management,and they are seen as a methodfor giving generics competitors unnecessaryinroads into valued markets atthe cost of branded companies."