Pharma turns to reformulation to maximize ROI

Reformulation is a popular method of lifecycle management. In fact, from 2002-2005, 39% of the total product launches from the 50 top manufacturers were reformulations. However, before embarking on a reformulation strategy companies must weigh-up whether it is appropriate to commit the required R&D, sales and marketing resources to the project, as opposed to dedicating them to the development of a novel molecule or product.

Reformulation can have several distinct strategic aims, such as staving off generic incursion by extending the patent life of a molecule by switching the patient to a patent-protected reformulation. Alternatively, improving the profile of a molecule can increase sales through differentiation of the product from its competitors. Additionally, drug makers may look to expand the scope of the molecule: sales potential can be increased through the development of a formulation that can target additional patient segments or treatment settings.

Different forms of reformulation

Datamonitor has identified four classifications of reformulation within the drug cycle: switch and grow, expand and grow, generic defense and market grab. Switch and grow is a common strategic objective in the early-to-mid stages of a molecule's lifecycle, in which patients are switched from the old to a new and competitively differentiated formulation. This enables a repositioning of the molecule in the marketplace and provides an opportunity to grow sales.

'Expand and grow' is another early-to-mid stage strategy, where a company seeks to increase the commercial potential of a molecule by expanding its scope, by, for example, gaining approval in additional indications, thereby accessing new patient populations and/or treatment settings.

Later in a molecule's lifecycle, as patent expiry and the market entry of generics loom, 'generic defense' reformulation can provide an opportunity to switch patients to a competitively-differentiated formulation that provides extended patent protection.
Finally, following a molecule's patent expiry, drug makers might try for a 'market grab' strategy, whereby a company may develop a reformulation or 'supergeneric' that can capture market share from a molecule's original brand franchise and from other manufacturers, including generics.

Improvement needed

However, for all the strategy and planning involved, the success of a reformulation is heavily dependent on the manufacturer's ability to develop an improved version of the original drug.

The key to a successful reformulation intended to replace original drugs is to provide clear therapeutic benefits over their predecessor. Launch timing, pricing and promotional activity are also important factors that can shape the subsequent uptake of the reformulation.

In recent years, central nervous system (CNS) and alimentary and metabolic therapies have been the most frequently targeted for reformulation. Respiratory, anti-infective and genito-urinary and sex hormone therapies have also experienced frequent reformulation. This reflects the large patient populations within the major indications of these therapy areas, the high commercial value of many of the products and the highly competitive nature of the markets. All of which drive companies to be more active in seeking to expand their franchises, gaining a competitive advantage within the respective markets.

With product development pipelines looking increasingly barren, on top of spiraling R&D costs, pharmaceutical companies must ensure they maximize revenues of existing brands.

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