VALUE-CREATION OPPORTUNITIES FROM MARKET DISCONTINUITIES IN THE PHARMACEUTICAL INDUSTRY: Avoiding value-destruction from patent expiry in a branded therapy market

摘要

Patent expiries within a therapy class pose an especially complicated challenge for branded pharmaceuticals. This requires the remaining branded players to justify their price premium to maintain physicians' usage as the generic drug becomes available, or to reconsider their premium pricing position by evaluating the value-creation of alternative strategies. This paper outlines an approach for dealing constructively with this challenge based on the coordinated application of market intelligence and business strategy simulation modelling for the development of robust value-retaining strategies. Insights developed from recent client work suggest it is a reliable methodology for evaluating patent expiry challenges in the pharmaceutical industry, enabling significant value-creation. The discussion furthermore suggests key benefits may be achieved from applying strategy dynamics and system dynamics based approaches, to derive strategic direction in market discontinuities.