Portfolio Planning Made Simple

Building a Bridge Across the Patent Cliff

Posted by Michael Rahm on 10/20/15 6:55 AM

Companies, regardless of scope or industry face risk. Pharmaceutical companies contend with R&D pipeline drought and complex changes in regulation that bring new and unanticipated expenditures. The emergence of generic drugs following the loss of exclusivity (LOE), significantly change revenue streams of once successful commercialized therapeutics. Generic drug competition is considered by some to be the single greatest threat to the health of a pharmaceutical portfolio.

The ability to quantify and qualify risks stemming from LOE is an interesting and increasingly common use case that we are observing at Decision Lens. Pharma companies need to not only quantify their risk, but align their LOE strategy to their overall organizational goals and portfolio. That strategy can be very different between organizations as well as the categories of drugs in which exclusivity is lost. Can you find new uses for your drug and market it for a completely different disease or ailment? Do you create a generic version of your own drug to try and capture a portion of the upcoming generic market? Different courses of action for every situation, but the common goal remains – mitigate the risk faced.

In 2015 alone, it’s estimated that roughly $44 billion in revenue will be lost world wide due to LOE. That’s about $9B less than pharma companies faced in 2012, but still a huge revenue loss nonetheless. Organizations need to face these challenges head on. Decision Lens is helping companies do just that. Is there a silver bullet answer to LOE? No. But Decision Lens does provide reliable insights into the relative benefits and costs of each option under differing assumptions. By directly comparing various cost and resource scenarios, companies can better decide the best strategy and investments to make to reduce their LOE risk.

LOE can be a large hurdle to overcome, but being prepared with the best data and aligning strategies across the organization can help reduce risk and ensure losses are kept to a minimum.

Topics: General


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