Zyprexa Zydis + Launch Marketing Strategies

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					Can a drug live forever?

Some pharmaceutical companies are determined to extend the life of their
drug beyond patent expiration, devising strategies to manage the life cycle
of their most important medicines that begin in the clinical phases.

By John King

Life-cycle management has become a necessity to the continued success of pharmaceutical
companies. Companies that have instituted a comprehensive life-cycle management strategy and
a detailed plan to guide their progress toward their goal are reaping financial and clinical rewards.
A successful life-cycle management plan can be broken down into 10 distinct courses of action.
These actions, when practically executed, ensure that a pharmaceutical product can potentially
live forever.

Successful product life-cycle management involves the continued development of scientific,
technical, regulatory, and marketing strategies that enhance the value and extend the life of
medicines. Following these 10 ideas for successful life-cycle management ensures a constant
market presence for a pharmaceutical product.

1 Develop a map to chart the progress of a molecule as it goes through various stages of

For life-cycle management to work, pharmaceutical companies have to establish early in a
molecule’s life a road map that they can use to chart the progress and failures of a molecule to
optimize its economic potential. One company that has embraced molecular mapping and is
actively using it in the continued development of the recently launched antirheumatic drug
Humira, is Abbott Laboratories. “Abbott is committed to exploring the full therapeutic potential of
Humira,” says Jim Lefkowith, M.D., divisional VP, immunosciences development, Abbott
Laboratories ( “Based on the recent approval of Humira for rheumatoid arthritis,
we’re excited to be initiating programs that will help us understand the effect of Humira in other
autoimmune diseases as well.”

Humira (adalimumab), approved in December 2002 by the U.S. Food and Drug Administration for
rheumatoid arthritis, is in clinical trials for treating psoriasis, psoriatic arthritis, juvenile rheumatoid
arthritis, and Crohn disease. Abbott will also seek an indication for ankylosing spondylitis.

Abbott has been mapping these clinical trials for Humira before the first indication was approved.

“We, at Abbott, had an awareness, and that awareness was based on understanding of tumor
necrosis factor and its role in disease,” says John Leonard, M.D., VP, global pharmaceutical
development, Abbott Laboratories. “We also had the added advantage of having a couple of
competitors —Amgen’s Enbrel and Johnson & Johnson’s Remicade — ahead of us with some
early data suggesting that tumor necrosis factor was far more than just rheumatoid arthritis.”

Humira was put through a specific set of conditions as it progressed in development from
discovery through clinical trials, each step yielding information that was added to the database.

“From a discovery point of view, when we have the development threshold conversation, there is
a formalistic process that we go through,” Dr. Leonard told R&D Directions. “One of the things we
try to identify in the beginning is the avenues that a candidate drug may go through going
forward. Those avenues fall into certain therapeutic categories once the proper use for the drug is
determined. We can identify whether there will be novel ways to formulate the product to make it
more useful and better tolerated. Those avenues are based on learning as we carry out the
earliest-phase studies. We try and think about a succession of indications, if it is the type of
product that is not specifically designed for very discrete indications.”

Abbott managers strongly believe in the concept of life-cycle management, with one of the most
important things being the ability to listen to the data and be ready to change gears when an
opportunity arises.

“Abbott has a development plan, and when we proceed down that road map, we are always
thinking what our options are at every stage of the game,” Dr. Leonard says. “The program itself
has the life-cycle notion fully integrated into it to. There is not a step that says ‘Now we do life-
cycle management.’ We look at what all the options are along the way to make the drug available
for more patients, to make it better tolerated, and to make it better delivered. All that falls into life-
cycle management.”

Another pharmaceutical company that has begun mapping life-cycle management from discovery
is Eli Lilly and Co. ( One product that has specifically been developed for multiple
indications is the antipsychotic Zyprexa.

Originally approved in the United States in 1996 for the treatment of schizophrenia, Zyprexa
rapidly ascended to become one of the leading treatments in the antipsychotic market. Since its
introduction eight years ago, Zyprexa (olanzapine) has been cleared for the treatment of
schizophrenia, the short-term treatment of acute manic episodes associated with bipolar disorder,
and for the long-term therapy and maintenance of treatment response of schizophrenia. Zyprexa
is the first atypical antipsychotic approved for the short-term treatment of bipolar mania. The
product’s road map was developed from a combination of careful planning and reacting to clinical

In April, Zyprexa Zydis was cleared for marketing as an orally disintegrating formulation for the
treatment of schizophrenia and the short-term treatment of acute manic episodes associated with
bipolar disorder. Because the new formulation dissolves on contact with saliva, it may be useful to
physicians treating patients unable to swallow conventional tablets and may increase patients’
adherence to their prescribed regimen.

The product is awaiting approval in combination with Lilly’s Prozac for the treatment of bipolar
depression and with duloxetine for the treatment of stress urinary incontinence. Lilly also has
developed an intramuscular formulation of Zyprexa, which is awaiting U.S. approval. In addition,
the company is developing a deport formulation, which is planned for submission in 2005.

“Lilly began thinking about a life-cycle plan for Zyprexa very early on,” says Alan Breier, M.D., VP
of pharmaceutical products for Lilly and Zyprexa product team leader. “Zyprexa was launched in
late 1996 and has patent life to 2011 with development programs taking anywhere from three to
six years for a single project. Lilly began thinking about new line extensions and indications fairly
early on, indications that always have to be measured by the efficacy of the molecule. As the
molecule goes forward, we launch with a given indication; in Zyprexa’s case it was schizophrenia.
But there were reports coming in that bipolar patients seemed to be getting a good clinical

“We met with FDA, talked about what would be required to pursue an indication for bipolar
disorder, designed a clinical program that would meet those requirements, conducted the
program, analyzed the data, and sent it in. Lilly was able to achieve a short-term treatment bipolar
disorder indication for Zyprexa when that work was approved by FDA.”

Zyprexa is Lilly’s top-selling product, generating $3.69 billion is sales in 2002, an increase of 20%
compared with 2001 sales of $3.09 billion. Lilly managers are strong believers in thorough
planning, which leaves little to chance.

“It is a lot better to be forward-thinking,” Dr. Breier told R&D Directions. “A road map would
contain the things scientists and researchers are talking about, such as are there cousin
disorders or disorders that are likely to be amenable to treatment by the agent. For example for
the Prozac-type drugs, there are conditions that are very similar to depression like social anxiety
and panic disorder — disorders that probably share some common biological roots. Lilly might
create a plan that would look first at depression, and if that’s successful and gets on the market,
we might want to find some preliminary information to determine if it will it be effective for social
anxiety. Then we approach FDA and get approval for a Phase III trial for social anxiety. We can
go down a route like that, having a rough sketch of what that future life-cycle plan might look like
— all things that are able to demonstrate safety and efficacy.”

Novartis product leaders have found that molecular mapping has resulted in life extension for its
hypertension product Diovan (valsartan), which in 2002 became Novartis’ best-selling product,
with worldwide sales of $1.67 billion.

Diovan is approved for first-line treatment of high blood pressure in the United States and more
than 80 other countries. Diovan is also the only angiotensin II receptor blocker to be approved for
the treatment of heart failure in patients who are intolerant of angiotensin converting enzyme
inhibitors. Diovan is the leading angiotensin II receptor blocker in the United States and one of the
fastest-growing agents among the top 10 branded prescription antihypertensives on the market.

Novartis is applying life-cycle management to all its key brands, sometimes testing thousands of
patients in megatrials.

“Diovan is a good example of successful development through life-cycle management,” says
Jean-Jacques Garaud, M.D., senior VP, head of clinical research and development, Novartis
( “Particularly around two things: the development of a combination product called
Co-Diovan and the development of megatrials in different patient populations. We are running
four megatrials with the Diovan family.”

Diovan is supported by the world’s largest clinical trial program with an angiotensin II receptor
blocker, involving more than 45,000 patients, including 8,000 patients with diabetes. Several
ongoing clinical trials are investigating new applications for Diovan across the cardiovascular
disease continuum. These trials include Valient (Valsartan In Acute Myocardial infarction), Value
(high-risk patients with hypertension), Navigator (patients with impaired glucose tolerance, or pre-
diabetes, at high risk for cardiovascular events), and the recently completed Val-Heft, one of the
largest studies ever completed in heart failure. Running these megatrials sets Novartis apart from
other pharmaceutical companies.

“Novartis has something that is unique, which is to be heavily involved after the approval of the
drug or sometimes right before the approval of the drug with megatrials,” Dr. Garaud told R&D
Directions. “We believe that megatrials are a way of impacting how medicine is practiced. As a
result, if the data is positive, we can also positively have a lasting impact in the area of public
health, as well as the commercialization and the value of a product. It is something that we have
done a lot, particularly in our antihypertensive area, with Diovan and Lotrel. This is an area that
helps a lot to support the extension and the understanding of a given product.”
Line extensions and indications are critical to the continued financial success for pharmaceutical
companies because in the next five years the pharmaceutical industry faces the potential loss of
billions of dollars in revenue to generic competition.

The increasing cost of drug development, now estimated to be in excess of $800 million for a
successful product launch of a new molecular entity, demonstrates the increasing connection
between early-stage product management and research and development cost-effectiveness.

“I believe that the pipeline deficits of some of the larger companies have gotten so big that it has
forced them to begin to think more about how to handle life-cycle management well,” says Chris
Bogan, president and CEO, Best Practices LLC (, a research company that
conducts work based on the principle that organizations can chart a course to superior economic
performance by studying the best business practices, operating tactics, and winning strategies.

“Our emerging body of work is suggesting that life-cycle management is something that,
ironically, should be done throughout the entire life cycle, not just at the end when they are three,
four years out from patent expiration and they are panicked about a large successful product
falling off.

“What we are seeing is that there are life-cycle management activities at the front-end of the
molecule, where they are doing more indications planning and thinking out the line extensions, so
that they can bring them earlier into the marketplace and have a longer period in the market.”

Pharmaceutical marketers have to have a plan for making sure that the life of their product does
not end.

“The product manager needs to plan completely for the life cycle of the product through phase-
out and death,” says Gretchen Jahn, co-founder and chairman of Aegis Analytical Corp.
(, which develops software that helps pharmaceutical and biotech companies
improve compliance, increase profits and gain competitive advantage. “The company has to plan
how a particular product gets to the end of its life cycle and how there are new products coming in
to get additional revenue out of the same people by having them either trade-up or move to a new
product. Pharmaceutical companies have been slow to realize that. They think in terms of new
indications and new dosages, but it is more than that. It is also what additional molecules or drugs
will come to market that will compete with and replace an existing product that company already
has in its portfolio. In other words, planned obsolescence.

“Every manufacturing environment deals with the same phenomenon: very, very few products are
still around a hundred years later. There has to be a plan for the obsolescence of a product with a
new product that is going to be brought out in addition to extending the life of the existing

2 Effectively organize company resources into units responsible for specific medicines
As the major pharmaceutical companies have embraced life-cycle management, they have begun
to organize their scientists and researchers into teams that are responsible for a certain drug or
therapeutic area, which makes for better use of limited research and development dollars.

“Lilly uses the terminology ‘product team,’ which represents a group of people who have a
dedicated focus on the molecule,” Dr. Breier told R&D Directions. “Responsibilities differ through
stages. An early responsibility might be trying to do the first Phase III trial that would lead to the
first indication. Later responsibilities include thinking about what might be a second indication.
The responsibilities vary from molecule to molecule.
“We are always thinking ahead and thinking about different line extensions or new indications that
might be appropriate for the molecule. Depending on available resources and how the clinical
data and scientific data pan out, we would pursue different potential line extensions and new

Novartis managers believe that organizing by therapeutic areas offers the best chance for

“Novartis is organized by therapy areas,” Dr. Garaud says. “The teams in the therapy areas have
the responsibility of looking at the strategy aspect of given brands and products. Beneath that, we
have international product and brand teams that are involved in the further development of the
drug. There is an organization around life cycle, with project physicians and scientists
collaborating with the people in charge of the commercialization of the product to identify and
develop the new opportunities when a new medical or therapeutic need arises.”

Abbott has revamped its life-cycle management initiative to include a central data repository that
allows all teams access to the same information for all molecule development and clinical testing.

“What we are trying to do is have a core expertise, a repository of experiences, case studies,
successes, and even failures that reside centrally,” Dr. Leonard says. “We have the individual
product team responsible for building their life-cycle plan using the repository of information that
has been created by all of us as we do different individual projects.

“Part of this repository will be formulation stories, part will be patent stories, part will be packaging
stories, some of it may be unique clinical situations the products use and could be useful for the
clinical team, some is a legal story. Taken together, all these case studies serve as a reference
tool for teams as they go and create their plan for their individual project going forward.”

It is imperative that pharmaceutical companies use the time that patents and market exclusivity
allow to extract as much return on investment as possible on marketed products. This, in turn,
enables companies to fund the continued research and development of innovative and valuable
new products to meet the medical demands of patients who are living longer.

The size of pharmaceutical companies has been an obstacle as companies have begun to deploy
in-house life-cycle management teams.

“Just getting the molecule out of R&D to get that initial pilot license is difficult,” Ms. Jahn told R&D
Directions. “There needs to be a culture that understands that science is wonderful, but that the
company is running a business and needs to be focused on those things that, in fact, are good for
business. Another issue is the way companies are going through scale-up and trying to establish
a process. From what I have seen, pharmaceutical companies are not using enough of the tools
at hand to be able to stabilize that production quickly.”

3 Develop drugs with multiple indications instead of developing blockbusters
Pharmaceutical companies are beginning to recognize that they can extent the life cycle of a
blockbuster product, and possibly its patent protection, for several years with the introduction of
new indications and dosages — the result of continuous research and development even after a
product is launched.

“Abbott looks at each drug and its potential on a case-by-case basis,” Dr. Leonard says. “In most
cases, it turns out that we are working in areas where we tend to have more options than one. It’s
a question of runway; the more runway we have, the more options we have. As we get farther
down the life-span of a product, we have fewer options.”

At Lilly, the data mined from clinical development determines where the scientists and
researchers go.

“There are a variety of different options,” Dr. Breier says. “We get the first indication and we
decide based on clinical data and the knowledge gleamed from the literature if there is another
indication that the molecule would be safe and effective for. At Lilly, bipolar and schizophrenia
share an awful lot in common. They are not worlds apart in terms of symptomatology and types of
patients. In fact, there are some people who think they have a common root.”

Novartis product leaders believe that there is no substitute for the lab and the clinic to generate
opportunities, with a case in point being its cancer drug Gleevec (imatinib).

“Gleevec was developed initially for a very targeted indication of only one form of leukemia and it
could have been perceived by the outside world as a very limited indication,” Dr. Garaud says.
“But the potential impact on public health and the innovation was such that it was overwhelming.
Now, it is possible that we are discovering after a few years that Gleevec may have some uses in
other types of indications or in combination with other drugs and this is being explored. This is
what research is about.”

Abbott found itself in a similar position when, almost by accident, company researchers came
across the HIV protease inhibitor Kaletra in the course of researching HIV protease inhibitor

“Abbott learned during the course of clinical trials that Norvir was a drug that was very effective in
treating HIV,” Dr. Leonard says. “We also learned that it has a very potent way of increasing drug
levels of other protease inhibitors. Norvir, which was a protease inhibitor, became the base for the
pharmacological enhancement for Kaletra, which is a novel protease inhibitor coformulated with
Norvir. Kaletra has now become the number one protease inhibitor in just about any country in
which HIV inhibitors are sold. That’s serendipity. We have to keep our eyes open for avenues
that, no matter how we think about it in the very beginning, can’t be planned.”

Approved by FDA for marketing in September 2000, Kaletra is indicated in combination with other
antiretroviral agents for the treatment of HIV infection. Kaletra generated $551 million in 2002

Kaletra (lopinavir and ritonavir) has become the most-prescribed protease inhibitor as part of a
treatment regimen for HIV in the United States. Based on the number of patients receiving
therapy, Kaletra also has become the protease inhibitor market share leader in Europe with a
29.5% share. Kaletra, which now holds a 28.6% share in the U.S. protease inhibitor market,
received accelerated approval in the U.S. in September 2000, based on ongoing clinical studies.
Kaletra is part of a management cycle that has come into its own in the past two to three years.

“Life-cycle management probably varies by part of the world, but it has been a global
phenomenon in the last 24-36 months,” says John Rhodes, managing partner, pharmaceuticals
and life sciences, Deloitte & Touche LLP (, a professional services organization. “It’s
very recent in terms of organizing research efforts to align with planning. Identification is one
thing, but to manage the scientists and the capital resources is another matter. Managing
partnerships and alliances is a whole other story. Its a great concept, but companies have to put it
into play, into their research facilities, and that’s not something that can be done overnight.”
As pharmaceutical companies become more comfortable with life-cycle management, their focus
on the blockbuster will move toward a more balanced and diversified portfolio. Research
suggests that all pharmaceutical companies are developing products with multiple indications.

“We’ve done benchmarking studies looking at what commercialization teams can and should do,”
Mr. Bogan told R&D Directions. “There are opportunities to identify those multiple indications
sooner and to plan much more rapidly. For the larger pharmaceutical companies, the emphasis to
do that will be greater and they will do more of it and they will get better at it. There are some
companies that if they don’t develop the drug by a certain time period, they pull back because
they don’t feel they will have enough time in the market to recoup the tremendous costs of

Pharmaceutical companies are beginning to see that being blockbuster-focused can drain
valuable time and money from smaller, more profitable projects.

“In the recent past, companies have gone after blockbuster drugs and are starting to see the
difficulties with that,” Ms. Jahn says. “If they spend all of their time looking for blockbuster drugs,
they also have blockbuster failures. They spend lots of money and the drug never gets to market.
A more rational approach is to have multiple efforts under way, with some blockbusters but also
products with multiple indications for providing a nice revenue stream. Unfortunately, a good part
of the blockbuster mentality is driven by the stock market and analysts in wanting to increase
value and show profit. I believe that is short-sighted.”

4 Decide early if life-cycle management is appropriate for each product
In assessing different approaches to life-cycle management, companies will need to consider
several factors on a molecule-by-molecule basis. First and foremost, they will have to be
confident that there is the potential for clinical improvement of the original molecule through
reformulation and chemical modification. Companies must also consider their tolerance for risk
and willingness to invest in either less-proven technologies and radical modifications of the
original drug.

“Life-cycle management should be considered for every drug,” Dr. Leonard says. “Some products
don’t lend themselves well to that, although through very creative thinking and by listening
carefully to doctors and patients, some opportunities can be identified that the companies cannot
come up with.”

Lilly employs a life-cycle plan that may lead to discontinuing a drug.

“If we are launching a drug that has little patent life because the development process was so
long, we might choose not to pursue future indications,” Dr. Breier says. “We would have to
evaluate the duration of patent, evaluate the competition, look at other conditions that are there
and the probability of technical success. That assessment is important. We could argue that a
decision to not go forward with development is also life-cycle planning.”

Pharmaceutical executives tend to talk about innovation in terms of the discovery of a new
molecular entity, but there’s more to innovation than that.

“Of the products that have been approved by FDA in the last 10 years, 60% to 65% are line
extensions — new formulations, new dosing, and new combinations,” Mr. Bogan says. “That is
innovation, that is extending a molecule to reach more people, to reach more indications, more
patient populations. We should embrace that and get better at it faster. But when we read the
annual reports there’s an allegiance, a worship at the altar of new molecular entities. We need to
keep doing that, but it is very hard to discover new molecular entities and bring them to market.
We, therefore, need to get better in harvesting what we have and using it well.”

That new mindset can be hampered by the stringent regulatory requirements. “What seems to be
peculiar to the pharmaceutical industry that we do not find in other industries is that regulatory
concerns and validation concerns come into play fairly early in the research and development
stages,” Ms. Jahn says. “In pharma and biotech, generally whatever is done in research and
development is locked as they scale up because of regulatory concerns, validation concerns, and
documentation concerns. There is not the same level of freedom to take a process that was fine
in the lab and abysmal in production and start all over again.”

5 Consider the development of alternate delivery systems for each drug
Drug delivery systems are gaining acceptance in pharmaceutical life-cycle management.
According to industry estimates, from 2003 to 2004, about 25% of all research and development
molecular projects involving existing products and 17% of development projects involving new
products will use drug delivery technologies.

“For years, drug delivery technologies has been overlooked,” says John Fraher, president, North
America, Eurand (, a specialty pharmaceutical company that develops enhanced
pharmaceutical and biopharmaceutical products using innovative drug delivery technologies. “But
pharmaceutical companies are getting better at using drug delivery companies. There were 24
products approved by FDA in 2000 for the U.S. market and about 30% of those used drug
delivery technology tools. We’re beginning to see a significant increase in the incorporation of
drug delivery into research and development. Companies are beginning to incorporate drug
delivery more, but there is still room for improvement.”

Drug delivery has become an effective and valuable life-cycle management tool. Lilly has adopted
several different forms of drug delivery platforms in the life management of Zyprexa.

“For Zyprexa, we have a line extension that is called Zydis, which is a fast-dissolving wafer,” Dr.
Breier told R&D Directions. “Patients can put this formulation on the tongue and within seconds
it’s gone or they can mix it in water and drink it. It’s a convenience for patients who have difficulty
swallowing or have noncompliant medicines and allows physicians to have another way to dose
the drug.”

Lilly recently submitted for FDA approval a rapid-acting intramuscular extension for Zyprexa,
which is an injection into the muscle that leads to rapid onset of action to quell agitation.

Abbott’s core competency is tableting products for immediate-release forms, but the company is
beginning to develop alternate systems as well.

“Some pharmacology demands that the product be there on a sustained basis and a controlled-
release version of the drug might be a way to study it; that’s a determination that we make early,”
Dr. Leonard says. “We try to supplement that with technology, some of which we have inside and
other technology we source from the outside. In the case of potent drugs or drugs that need to be
contained, many times we will use soft elastic capsules. We have several products that are
formulated that way, such as Kaletra.

“On the injection side, although we don’t typically do it within our research and development
group, we do have access through our hospital products division to novel injection technologies.
Remixes or syringes that are prefilled and syringes that can be handled a variety of different ways
are built into our programs. We are doing that with Humira, which is an injectable biologic.”
Humira could be a valuable medicine for consumers, Mr. Rhodes says, in the context of how
many positive benefits could result from all those indications. “Humira is a new drug; new in the
sense that there is a lot of great potential in terms of patients that didn’t have access to that kind
of benefit in the past,” Mr. Rhodes told R&D Directions. “That’s an extension that’s not only
dosing, but five separate indications. It will be wonderful if at least one proves successful.”

Drug delivery product sales in the U.S. are expected to reach $30 billion by 2005. This increase
will be driven by new product launches across all technology platforms.

Oral formulations will continue to be the delivery vehicle of choice, with sales expected to double
to $18 billion by 2005, which represents a 14% annual growth rate. Pulmonary-delivered products
are expected to reach $6 billion by 2005, up from $2.5 billion in 1999. Transdermal patches could
grow by more than 10%. The sustained-release injectable sector is expected to experience the
fastest growth, with a projected growth rate of 17%.

“Novartis mostly works with oral products, but we do have some transdermal delivery systems
technology, and to a lesser extent, inhaled products and IV products, but these are less
frequently used,” Dr. Garaud says. “Mostly our research is centered around oral products.”

The most common drug delivery formulation is oral drug delivery and the use of controlled-
release once-a-day formulations. “But we are beginning to see switching into different dosage
forms, such as from injectable into oral dosage forms as a way of prolonging life,” Mr. Fraher
says. “We are beginning to see a lot of interest in that area.”

One of the reasons for this growth is that drug delivery is a versatile life-cycle management tool.
The application of drug-delivery technologies can provide companies with technological barriers
to generics, extended patent protection, market exclusivity of at least three-plus years, new
indications and labeling advantages, pricing options, and franchise expansion.

Additionally, and more importantly, drug delivery technology offers significant patient benefits,
such as reduction in dosing frequency and side effects and the development of optimal dosage
forms for certain disease states and patient populations, such as the elderly and children.

“The line extension is more of a shorter-term cash-flow positive,” Mr. Rhodes says. “At the same
time, some of the line extensions offer an opportunity for improved health care. If the line
extension can improve compliance by providing a dosing that is more patient-friendly, that’s good
for health care. It’s amazing how many prescriptions are bought and never completely used or
never completely followed in terms of the dosing regimen, which is what leads to further
complications. Line extensions are value-adding to patient compliance.”

6 Don’t rule out life-cycle management for a drug that was not managed early
“There is value in doing late-stage life-cycle management in the cases of new or unmet medical
needs,” Dr. Garaud says. “In some situations, we may have to play catchup, but if we want to
make a difference, we should be able to manage, even if it is a bit late.”

For Abbott, it all comes back to time, as well as what the data indicate during development. “A
packaging change can usually be done fairly quickly,” Dr. Leonard says. “Modifying indications or
doing other novel clinical uses with the product take the longest.”

Many pharmaceutical companies have been remiss is managing the life cycle of a product. “Life-
cycle management is something that, ironically, should be done throughout the entire life-cycle,
not just at the end when a company is three, four years from patent expiration and panicked
about a large successful product falling off,” Mr. Bogan says.

7 Be ready to ask for approval of multiple line extensions after the drug gets to market
Reformulation has generated significant value for pharmaceutical companies that have employed
it. Reformulation uses the molecule’s same active ingredient with modifications to improve
compliance or efficacy. If these formulation changes are modest, reformulated drugs have the
advantage of being easier to develop and faster to approve.

“Operationally, the size of the dossier needed for a new indication is not as big as the initial one,”
Dr. Garaud says. “From that standpoint, it’s easier to handle. But FDA is tough. The agency has a
role to play and its overview is as thorough with a supplemental new drug application as with a
new drug application. FDA may feel more comfortable with the safety of the product, but it will still
scrutinize the dossier. A new formulation, a new indication, or a new dosing regimen doesn’t
mean that the safety profile of a drug remains the same.”

Reformulation of a product, as well as seeking a different indication can play a difference in
gaining approval sooner.

Zyprexa Zydis was a straightforward application. “All we had to do was demonstrate
bioequivalence to the oral,” Dr. Breier says. “That was not a large development program. The
rapid-acting IntraMuscular normally would not have been that big either, but Lilly targeted it for a
new indication, agitation, because that’s how these drugs are used. That required a large
development program with global clinical trials.

“A long-acting depot, where a patient gets an injection and doesn’t need another one for four
weeks, is a very technically complicated development and clinical program.”

Abbott is finding that the disease state matters more to FDA as the company moves forward with
Phase III trials for additional Humira indications.

“In the case of rheumatoid arthritis, when one looks at disease states that are analogous to
rheumatoid arthritis, such as juvenile rheumatoid arthritis or ankylosing spondylitis, FDA will take
our database that’s already cumulative and apply it to those very analogous disease states,” Dr.
Leonard told R&D Directions. “It’s a question of agreeing with FDA as to what constitutes
sufficient evidence so the agency can conclude that the drug is truly efficacious. Those
conversations typically go pretty well.

“As one moves farther away from rheumatoid arthritis, where we have most of our information, it’s
fair to say that some more questions come up that need to be addressed with data. Tumor
necrosis factor plays a very active role in psoriasis and it’s a fair question as to how much
information we should get in psoriasis patients who typically don’t die from their disease, as can
happen with people with rheumatoid arthritis. In those conditions, it is easier than not having data.
But it is never easy in terms of being automatic.”

8 Be prepared to deal with aggressive generic competition even if the drug is protected
The generic drug industry is growing faster than the brand-name drug industry mostly because of
many major drugs now going off patent. And generic companies have gotten more aggressive in
challenging brand-name drug patents thought to be unbreakable.
“The threat and reality of generic introduction drive the line-extension aspect, or the new
formulation, or even the six-month extended patent use because of pediatric clinical trials,” Mr.
Rhodes says. “It’s good, healthy competition. The generic industry has not grown too powerful;
the generic industry has grown more prevalent. We’ll see more generics on the market next year
than at any point prior, mostly driven by a lot of big name branded drugs coming off patent.”

Generic companies have become aggressive in the past few years in the pursuit of developing
generic forms of products. “Generic erosion is measured in terms of weeks, not months as it has
in the past, and we are seeing now 72% of HMOs requiring generic substitution where possible,”
Mr. Fraher says. “In response to that, the pharma companies are being forced to develop novel
dose forms to stave off generics.”

9 Consider all available avenues to get the most from a product’s patents
The U.S. federal patent statute provides 17 years of exclusive rights to an invention, but the
actual amount of time a drug manufacturer is usually able to market its drug without competition
is substantially less. Because pharmaceutical companies usually seek patent protection as soon
as a potential drug compound is identified, a large portion of the patent period can be taken up by
the product’s research and development and FDA review of the new drug application.
Pharmaceutical companies need to be more aggressive in using this time to mine as much as
they can out of a product.

“To provide a certain amount of patent protection once the product hits the market seems
reasonable,” Ms. Jahn says. “The manufacturers need sufficient protection so that they can
recoup their investment, but they do not want to have so much protection that the consumer
winds up overpaying. The time it takes to get these products to market is becoming longer and
longer and longer, and the investment takes longer and longer and longer.”

Finite patent life can place an onus on the pharmaceutical companies to be more innovative in
life-cycle management. Because by doing so they can extend the product franchise for a
minimum of three years, and if they develop new in vivo formulations of the product they can
potentially get patent extension life of 10 years.

“Drug discovery technology companies such as ourselves, for example, have technology patents
that could leverage and can run for 10 to 15 years as well,” Mr. Fraher says. “Irrespective of the
length of life for the patent on the new chemical entity, by using life-cycle management strategies,
the franchise life can be enhanced.”

Market exclusivity has been an area of intense focus by the generic companies. “Patent
protection is adequate, but it raises the question of what the period of exclusivity should be,” Mr.
Rhodes says. “As for efforts so far to lengthen patent life because of delays at FDA, it is very hard
for these cases to prevail. FDA, with its new leadership, is reorganizing its structure and it might
make sense to see how that provides a more expedient approval process, and hopefully a fair
patent life for companies.

“Both sides are trying to work together to change the overall way things work. Patent protection
makes sense in terms of the discovery and the filing. The question is, ‘Should there be a longer
life provided for patent exclusivity?’That has been debated highly for many years. I’m not sure
that we have enough evidence to suggest that should happen right now.”

Bringing a drug to market for generic companies has become a predatory strategy. “I was
interested to read some of the generic companies annual reports,” Mr. Bogan says. “They were
talking about how many early filings they have made, what the total market value is in aggregate,
and what they expect to win in proportion. It’s a numbers game. This is not about love, it’s about
picking up on someone else’s market and getting it 10 cents on the dollar. That’s what they do
well because of their manufacturing excellence. The rise and influence of the generic
manufacturers are one part of a more complicated ecosystem. The generics have risen in power
because of politics and pricing and health policy issues in combination with legal changes that
have given them greater opportunistic openings to go out and sue and try to make claims on
drugs earlier because they realize the market potential they can tap into.”

Pharmaceutical companies are being forced into closer competition with each other, as more
companies are overlapping in therapeutic areas with new products being launched months apart.

“The competition in therapeutic classes is now measured in months rather than years,” Mr. Fraher
says. “When the initial beta blockers were launched, there were 13 years in between the first
(Inderal in 1965) and second beta blocker (Lopressor in 1978). When we looked at the cox-2
inhibitors, the difference between Celebrex and Vioxx was two or three months. The competition
between therapeutic classes is now much more aggressive than it was and there’s a need for a
much greater return on investment on these blockbusters for a cost of $800 million. Companies
can develop a drug delivery extension product for life-cycle management for about $15 million to
$20 million and can do it in about seven years.”

Pharmaceutical companies need to develop a consistent life-cycle management strategy to deal
with the pressing issues of development costs, expiring patents, high competition, and generic
erosion. Life-cycle management can ensure that a product, once introduced into the marketplace,
will essentially live forever.

“If a molecule fulfills the needs of patients and brings something to the market that competitors do
not and that brand can have new indications and line extensions, a good life-cycle plan can bring
forward new data throughout the product’s life, up to patent expiration,” Dr. Breier says. “Once the
product goes off patent though, there will be generic competition and that will result in less
development opportunities for the original sponsor.”

Even when a product has gone off patent and been released as a generic, the strong branding
that it received during its marketing can ensure loyalty.

“The industry is being more focused these days on life-cycle management of their brands,” Dr.
Garaud says. “Novartis is an example. Novartis has been the captain of the development of drugs
in transplantation with Neoral, which has been genericized for a number of years. Today, thanks
to continuing research, the company has supported a strong presence of the product, even
though it is genericized. The branding around it has been critical to its continued success.”

Pharmaceutical companies are realizing that they need to manage the total lifetime of a product
to ensure maximum optimization and sales.

“Drugs never go away unless they are withdrawn from the marketplace,” Dr. Leonard says. “Even
if they exist in a generic state, they are very important drugs that are commonly used. There are
generic drugs that benefitted from life-cycle management along the way, and that’s the legacy of
the work that we do. Patients and doctors will rely on those drugs.”

Life-cycle management has brought a renewed sense of purpose to an industry that has been
resistant to change. The idea of managing a molecule from birth to death is new.

“From a business perspective, life-cycle management is going to be a key element at Abbott to
insure stability and future growth,” Dr. Leonard says. “It’s a matter of balancing the risks and
costs of research and development. All of us in our industry, especially Abbott, are trying to find a
way to extend and build on existing products. We have to do it in a way that is meaningful to
patients and doctors. We have to come up with something that improves the product; that’s a very
important way of innovating as is finding a new chemical entity.”

10 Consider biotechnology technologies and biotechnology drugs
The larger molecules being development by the biotechnology companies lend themselves to
more indications. The pharmaceutical companies and the marketplace is beginning to take notice
of the innovations coming out of the biotechnology industry. There is long-term promise and
optimism for biotechnology discovery and development techniques, and some of the promising
drugs have made their way to the market, namely Herceptin.

“Improvement is not likely to occur overnight because people have tended to underestimate the
manufacturing difficulties and complexities of some of these biotech products,” Mr. Bogan says.
“The making of these drugs is very complex.”

Because there is a higher need today to demonstrate a return on the investment, pharmaceutical
companies are being urged to pursue alternative possibilities with a molecule or with a discovery.
“This opens up a whole new broad spectrum of relationship opportunities as well, new ways of
thinking, new ways of doing research,” Mr. Rhodes says.

Technology enables pharmaceutical companies to go deeper into a molecule than ever before.

“I believe that it’s a combination of changing technology and the approach to research that has
allowed companies to realize there may be multiple uses for a particular chemical or discovery,”
Mr. Rhodes says. “In the past, we didn’t see that as often. I believe that the technological
capabilities have permitted a lot more pursuit of those opportunities, not that it’s not expensive,
but they have the ability to carry it out more efficiently once they get through the first discovery
stage. Now you see genomics and the screening process through computational chemistry and
high-speed throughputs with the use of computers as opposed to the old-fashioned test tubes,
flasks, and beakers.”

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