Lifecycle Management Techniques

Every week I see a list of drugs that are going to be available generically but some of them never seem to appear. Elizabeth Brule, PharmD Candidate, University of Florida College of Pharmacy, has done some research as to why that occurs and if you take the time to read Lifecycle Management Techniques: How Pharmaceutical Companies Sidestep Patent Expiration

Lifecycle Management Techniques: How Pharmaceutical Companies Sidestep Patent Expiration
Elizabeth Brule, PharmD Candidate at the University of Florida College of Pharmacy

The amount of time between the market introduction of a new prescription drug and the patent expiration varies for a medication, dependent on when the drug is initially patented and the amount of time spent in clinical trials before FDA approval.  However, most pharmaceutical manufacturers enjoy brand exclusivity and the handsome profits for several – often more than 10 – years.  Once the patent expires, drug companies who develop a generic equivalent are free to manufacture the same medication and this market competition tends to reduce health care costs.  

While this is generally celebrated by the consumer who now benefits from a lower prescription copay or lower out-of-pocket (noninsured) cost, many pharmaceutical manufacturers are employing “lifecycle management techniques” to prolong their revenues. For example, several manufacturers develop extended release formulations of their products, which are often released to market shortly before their patent on the immediate release formulation expires. Usually these products require fewer clinical trials since they contain an active ingredient that has already been tested and thus, drug companies maintain this patent for several years beyond the release of the generic, immediate release formulation. Three times as many reformulated products as novel entities were approved by the FDA between 2002 and 2006 and this is a trend that is likely to continue.1 Here, a pharmacist can advocate for the patient and recommend a more cost effective option for the patient to the physician, although patients may sacrifice the convenience of a once-daily medication for the cheaper generic which may be dosed twice or more times a day. Manufacturers can also obtain new patents for their drug if the drug is approved to treat a new medical indication.

Another trend in lifecycle management techniques that is becoming more popular is known as the Rx-to-OTC switch. Manufacturers like GlaxoSmithKline and Schering-Plough have released several products to the over-the-counter market in recent years that have previously been prescription-only drugs.  One examples of the Rx-to-OTC switch is for omeprazole, used to treat heartburn and acid reflux, from with the Proctor and Gamble enjoyed consumer profits for their brand name product long before the very recent release of the over-the-counter generic omeprazole tablets.  Although Rx-to-OTC extends revenues for pharmaceutical companies beyond the prescription product’s patent life, the switch may mean an increase in health care costs for some consumers and a decrease for others.  Government and third party payers may require that the consumer buy the over-the-counter product rather than covering the cost of the prescription medication, transferring the burden of therapy costs directly to the patient. However, patients who would normally pay for an office visit with a physician for a prescription can also now forgo the appointment and consult a pharmacist for over-the-counter recommendation. Over-the-counter products, though, are meant to treat self-diagnosable and self-limiting conditions and are usually intended only for short term use.  Chronic illnesses should be diagnosed by a licensed physician and long-term treatment with some products, like omeprazole, should only be done under the supervision of a doctor.

Over-the-counter medication costs have been increasing at nearly 10% a year from 2003 to 2007 and have been rising faster than the US inflation rate, which has remained under 4% a year during the same time frame.2 Several European markets have seen similar increases in over-the-counter drug prices but only the UK has seen a recent increase in over-the-counter product sales; sales in the US and other European markets are decreasing despite the release of new Rx-to-OTC products. If the average prices of over the counter products remain higher than even the prescription out-of-pocket costs to a consumer, marketing Rx-to-OTC products with remain unsuccessful.

A future lifecycle management technique that is being explored is a third class of medicine, known as the behind-the-counter, or BTC class. While many other countries have BTC medicines, the United States only classifies drug products as prescription or over-the-counter. BTC drugs would be those that do not require a prescription but do, however, require consultation and authorization by a pharmacist before a sale. As of November 2007 there were no immediate plans by the FDA to introduce a pharmacist-only class of drugs and the effect this would have on consumers’ health care costs remains unknown.

Regarding the Rx-to-OTC switch and in general, current “lifecycle management techniques” in the United States and reductions in heath care costs for the consumer do not usually go hand in hand.  Pharmacists are a useful resource to answer questions about patent expirations, available generics or over-the-counter options. Also, some very popular prescription medication patents that have expired this year or will expire before year’s end include the following drugs: Advair, Depakote, Effexor XR, Fosamax, Prograf, Risperdal, and Topamax.  Patents that expire in 2009 include Avandia, Avelox, Flomax, Imitrex, Valtrex. Fortunately for the consumer, all of these products are used to treat conditions that must be diagnosed and monitored by a physician and are likely to be spared from the Rx-to-OTC switch. However this may be “hard to swallow for brand pharmaceutical firms.”3

References:
1. “Is an Rx-to-OTC more the right prescription to protect pharma revenues and cut heath care costs?”
https://www..pipelinereview.com/content/view/22463/309/
2. Current Inflation Rates https://inflationdata.com/inflation/Inflation_Rate/CurrentInflation.asp
3. “Drug Patent Expirations (2008-2009)” https://drugtopics.modernmedicine.com/drugtopics/Modern+Medicine+Feature+Articles/Drug-patent-expirations-for-2008—2009/ArticleStandard/Article/detail/503782

Elizabeth Brule is a 2009 PharmD Candidate at the University of Florida College of Pharmacy St. Petersburg Campus. She grew up in the Rochester, NY area and graduated as a mathematics major with a B.A. from Smith College in 2004. She currently lives in Largo, Florida with her 3 year old Rat Terrier, Kyla.

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