Why Patents Matter to Patients


by Russ Ward (@russcward)

Browse through the business press, and you wont have to search long before you find articles about pharma, patents and a whole lot of drama. From a patient perspective, whats the big deal?

The issue: Within the next few years, multiple pharma companies are set to lose their exclusive production rights to some of the worlds most popular drugs and medications. This “patent cliff, along with recent changes in Washington, means big changes in pharma patents and that means big changes for patients.

If youre in pharmaceutical marketing, you know all this but patients dont. And smart pharma marketers are looking at ways to bring them up to speed on this inside-the-industry issue.

Why do patents matter to patients?

Patents mean breakthrough drugs. Patients hear lots of advocacy messages from critics about the high cost of name-brand pharmaceuticals, but how often do they hear the other side: That patent protection means a company with a breakthrough drug has many years to offer its product exclusively, recouping the hundreds of millions (or sometimes billions) of dollars that can go into R&D? Its no stretch to think that if patent protections werent in place, many of todays most innovative pharmaceutical products might not be brought to market.

As an example of how exclusive drugs and their patents can impact a company, look at Merck. The company is struggling with the loss of patents, with two big expirations that contributed to a 2010 sales decline of 41 percent. Pfizer is watching closely: In 2010 sales of Lipitor alone accounted for more than $10 billion of the pharma giants annual income. When the company got a 10-month extension on Lipitors patent in the European Union, the Financial Times reported it had the potential to earn the company an extra $770 million.

Expiring patents can mean big discounts for consumers, but also create a marketing opportunity for the expiring brand. Pharma products that were sold for years on features and benefits often face a thrashing when generic competition opens up — an IMS Institute for Healthcare Informatics report states that more than 80 percent of a brand’s prescription volume is replaced by generics within six months of patent loss. Thats because most drugs are sold purely on features and benefits, with late-to-the-game brand marketing trying to keep consumers with the patented product only late in the life cycle. Thats a mistake, and pharma marketers should explore whole-lifecycle brand reinforcement that makes generics have to work harder for customers.

From diversification to purchasing competitors, pharma companies have a range of business tools for facing the threat of expiring blockbuster-drug patents. Its time they added more strategic, life-cycle branding and consumer education to the toolkit.



Powered by Facebook Comments

Comments are closed.