Companies face decisions on how to best market increasing number of ‘mature products’
NEW YORK and FRANKFURT; Aug. 3, 2010 – In 2011, 40 percent of the highest-selling drugs will be products whose patent protection has either already expired or will do so in the coming two years, according to an analysis by Accenture (NYSE: ACN). In 2007, the share of such so-called mature products accounted for only 15 percent of the portfolios of pharmaceutical companies.
With their product portfolios aging rapidly, manufacturers are faced with the question of how to best market mature products in the future. When a drug patent expires, other producers are free to offer the medicine for sale, which typically results in both falling prices and a decline in market share.
The Accenture analysis shows that in 2010, patent protections will expire for medicines with a current sales volume of $25 billion. By 2015, patent protections will expire for medicines valued at $130 billion.
“What are referred to as ‘mature products’, need to be marketed differently from new drugs,” said Andrea Brückner, a senior executive in Accenture’s Life Science practice and author of the study Managing the Profitability of a Maturing Product Portfolio. “The main goal for new products is growth and market share. For marketing mature products, though, it is profitability.”
She explained that as products mature, pharmaceutical companies must determine whether they will continue to market aging products alongside newer products or transfer them to different or new marketing teams in the future. Another possibility is for drug makers with a generics line already in place to integrate their mature-product marketing into their generics marketing effort.
In addition to these organizational questions, pharmaceutical companies face multiple strategic options. For example, many pharmaceutical companies make an effort to reduce the costs of marketing established products by replacing classic personal contact via sales representatives with Internet-based channels of contact. Also some drug makers who once took care of their own marketing activities in-house are now increasingly outsourcing these activities to external partners.
Alternatively, depending on the product involved, it may make sense for a company to introduce a generic of its own to the market, and then license production of the generic to a different pharmaceutical company before patent protection expires.
“In some cases, drugs may be suitable for continued sale as an over-the-counter product,” says Brückner. “The important thing is for pharmaceutical companies to mobilize patient loyalty, for which can be accomplished by instance by linking products with supplemental services for physicians, pharmacists and patients, or by updating the brand image.”
Accenture is a global management consulting, technology services and outsourcing company, with more than 190,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$21.58 billion for the fiscal year ended Aug. 31, 2009. Its home page is www.accenture.com.
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