Pharmaceutical Companies Relying on Pediatric Exclusivity to Drug Lifecycle

Pharmaceutical companies see strong returns through pediatric extension strategies, finds Cutting Edge Information study

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--Pharmaceutical portfolio management teams have increasingly turned to pediatric extension strategies to extend their brands’ lifecycles and net a high rate of return, according to a recent study by Cutting Edge Information.

“Companies do not need to invest in extensive pediatric testing to earn six extra months of exclusivity for the brand. And the extra time can mean hundreds of millions or even billions of dollars in revenue.”

Line extension strategies often lead to increased revenue during a product’s lifecycle when they are successful in protecting market exclusivity or delaying patent expiry. However, most line extensions require additional clinical research, time and money. Pharmaceutical products suitable for pediatric patients, however, offer a more efficient path for line extension.

Under the FDA Modernization Act of 1997, drug manufacturers receive an additional six-month marketing exclusivity period in exchange for pediatric data. This policy encourages the pharmaceutical industry to invest in clinical research in pediatric patients while granting companies more time to recoup that investment.

Cutting Edge Information’s study, “Pharmaceutical Portfolio Management,” found that pediatric indication strategies deliver an average of $130 for every $1 spent by surveyed pharmaceutical companies. The median return, however, was a more modest $27 per $1 spent, still higher than several other lifecycle extension strategy averages, such as new formulations strategies.

With substantial expected returns, many companies agree that pediatric exclusivity is worth pursuing. “Even if the new treatment does not sell tremendously well in the pediatric market, companies are afforded an extension of market exclusivity,” said Michelle Vitko, senior research analyst at Cutting Edge Information. “Companies do not need to invest in extensive pediatric testing to earn six extra months of exclusivity for the brand. And the extra time can mean hundreds of millions or even billions of dollars in revenue.”

Companies do need to plan early to gain approval from pediatric trials, however. In fact, 44% of surveyed companies in the study reported planning pediatric exclusivity strategies four to six years before patent expiration. The remaining 56% began planning two to four years before the drug’s patent expiration.

“Pharmaceutical Portfolio Management: Selecting Targets, Filling Pipelines and Preparing for Post-Launch Success” (http://www.cuttingedgeinfo.com/research/portfolio-management/strategy-resources/) bridges the gap between clinical portfolio management and pharmaceutical lifecycle management. The research examines portfolio management budgets, outsourcing, organizational structure and lifecycle extension strategies.

For more information about pharmaceutical portfolio management, contact Elio Evangelista at [phone].