Patent litigation: Pharma’s most robust generic defense

Patent litigation is the most effective and commonly used defense strategy among pharma companies seeking to defend their patents, with around three-quarters of all drugs companies resorting to the courts to protect their interests.

A significant threat
Pharmaceutical companies face a major threat from generics firms who actively challenge existing patents, effectively eroding branded sales by undercutting branded products’ prices to the consumer. Patent defense is a costly strategy, but failing to react to the challenges from generics firms could be disastrous. On average, branded drugs are currently losing around 30% of their market share to generics when new copy products hit the market. A further decline in sales is seen when companies introduce more generics subsequently.

Pharma’s alternative defense strategies
Pharmaceutical companies are forced to instigate defensive pricing strategies or to increase advertising spend and patient outreach programs if a patent is deemed to be unenforceable by the courts. This can also be the case when it simply becomes too expensive to pursue litigation.

Time is of the essence in the battle between generics and pharmaceutical companies. It can take drug companies around 12 years to create a marketable drug out of a patented compound. Add a few more years for the production and marketing of the drug and you can see that it can take a major pharmaceutical firm around seven years to even begin to earn returns before the core compound’s patent runs out.

There are a number of areas that must be focused on in order to protect patented compounds and the pharmaceutical company’s investment in the finished product:

• Strategic planning
• Lifecycle management and portfolio planning
• Key trends and industry development
• Generic company profiles

There are also five critical principles for success.
1. Companies must protect their existing brands from challenges to patents and competition from generics.
2. Companies must move to switch patients to new next generation drugs in order to balance their defense strategies for existing brands.
3. Pharmaceutical companies must work to assimilate regulatory, political, and public changes into their generic planning.
4. Companies should initiate any generic defense planning sooner and invest in the necessary resources to support it.
5. Pharmaceutical firms should look at deal-brokering, licensing, and explore market crossover strategies as potential solutions to competition from generics.

In the battle between pharmaceutical companies and generics, patent litigation plays a key role, but firms can take other steps to protect their interests as outlined above.

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In today’s fast-growing, highly regulated generic pharmaceutical market, companies increasingly require specialized legal guidance as their products are developed, launched, and litigated. Wilson Sonsini Goodrich & Rosati’s attorneys address this need by providing expert counsel to companies in the global generics industry, offering sophisticated representation far beyond the scope of general corporate and securities counsel.

We have assembled a highly experienced team of experts from a cross-section of the firm’s key practice areas, including intellectual property, litigation, antitrust, FDA/regulatory, technology transactions, exports and FCPA, trade secret, and trademark and copyrights. Led by the former chief legal officer of Mylan Pharmaceuticals, one of the world’s leading generic and specialty pharmaceutical companies, our attorneys work closely with our generic pharmaceutical clients’ legal and scientific personnel and senior management to understand and meet their specific needs both in the U.S. and abroad.