Use Case Pharmaceutical Company

Thesis:
How can pharmaceutical companies safeguard against its stream of revenues when their patent for drugs expires?

Background
Generally speaking, risks to a pharmaceutical company are the same as for any pharmaceutical company. That is,
regulatory downward pressure on drug pricing, as we saw with “EpiPen, manufactured by King, a subsidiary of Pfizer,
and marketed by Mylan,” FDA not releasing drugs/venture losses and impact from regulatory uncertainty, such as the
Affordable Care Act (ACA).

Revenue stream of pharmaceutical companies come from marketing responsiveness, innovation and major
acquisitions to enhance the breadth and depth of product portfolio. Revenues are enhanced by successful
commercialization of new drugs (FDA approvals), drugs in pipeline (late-stage Phase 3 or in registration), rich generic
pipelines, elderly demographic growth and evasive maneuvers, a.k.a. (maneuvers from the AARP Playbook) to extend
the life of drugs that face worldwide patent expiration.

In the case of Pfizer, which is a “preeminent global pharmaceutical company;” revenue was nicely supplemented by
one drug – The world’s bestselling drug Lipitor, “Peaking at annual sales of more than $9 billion and with lifetime sales
of more than $131 billion.” –As of Forbes article Jul. 9, 2013.

Revenue losses to pharmaceutical companies come from patent expiration. “Six of the 10 biggest-selling prescription
drugs on the U.S. market were expected to lose patent protection during 2011-2012.” To contain these loses, Pfizer
strategy was reported by AARP, which FiercePharma in their publication noted, “The AARP report itself is a pretty
good playbook for drug makers facing a patent loss.”

The Pfizer play, it paid, “Rebates to insurers and/or pharmacy benefit managers to keep using Lipitor;” raising price of
drug while under patent – “from a typical $1,290 per patient per year in 2006 to $1,939 in 2011;” direct advertising to
consumers and among other initiatives, “Entering into a so-called pay-to-delay deal with [an Indian company]
Ranbaxy, a generics maker, delaying the initial generic introduction from June 2011 to December 1 of that year.”

With Pfizer’s aggressive efforts, Lipitor revenues were three times more than drugs that face expired patents. Could
Pfizer have supplemented its strategy noted by AARP with other measures to retard the decline of revenues – In
2016, Lipitor revenues were approximately $1.7B?   

Synopsis:
We believe yes it could have, by leading internal resources efficiently to maximize market place opportunities by
ideation on our ideation cloud based modules that targets connecting pharmaceutical marketing to a social aim within
the patient and community.

Our Cloud modules also capture emotional riches with analytics based methods. It explain reasons far beyond why a
husband and a wife who have different physicians; one prescribes Lipitor to a husband while Zocor (manufactured by
Merck,) is prescribed by the other physician. Therefore, we raise the bar on companies that will usually ask to build
fact-based insights for decision makers, such as, which physicians are high value and responsive to promotions?


Source:
1.        Timestamp 10:59 AM March 30, 2017. https://www.forbes.com/sites/ycharts/2013/07/09/pfizers-projected-3b-drug-name-will-shock-you/#705d074c444a
2.        S&P Capital IQ, March 25. 2017
Mian Systems LLC
Use Case Pharma
Back