Managing the challenges of pharmaceutical patent expiry: a case study of Lipitor

Abstract

Purpose

The paper aims to study how global pharmaceutical companies such as Pfizer have managed the challenges of pharmaceutical patent expiry.

Design/methodology/approach

A case study method was applied. The best-selling brand drug over the past 10 years – Lipitor – was chosen as the case target.

Findings

For dealing with this, this paper describes all the details of the corresponding strategies of Pfizer before and after patent expiration of Lipitor. Before patent expiry, Pfizer undertook the activities of direct-to-consumer marketing, pricing strategy for competition, legal delay and me-too drug R&D. After patent expiry, Pfizer chose to carry out continuous marketing for brand, rebate strategy, authorized generics and change to over-the-counter. In addition, diversity and globalization strategy was applied before and after patent expiry.

Research limitations/implications

This research provides strong implication for managing pharmaceutical products before and after patent expiry.

Practical implications

It is strongly recommended for both brand and generic drug companies to design strategies to meet the challenges of pharmaceutical patent expiry.

Social implications

For the global pharmaceutical market, a conclusion can be drawn that, nowadays, the “patent cliff” is the most significant factor influencing decision-makers to consider futuristic policies. Further, it is also a considerably effective solution for reducing health-care costs for policymakers.

Originality/value

This paper contributes to the field of patent expiry management in high-tech industries such as pharmaceuticals.

Citation

Chao, C.K., Hu, H., Zhang, L. and Wu, J. (2016), "Managing the challenges of pharmaceutical patent expiry: a case study of Lipitor", Journal of Science and Technology Policy Management, Vol. 7 No. 3, pp. 258-272. https://doi.org/10.1108/JSTPM-12-2015-0040