Patent cliff and strategic switch: exploring strategic design possibilities in the pharmaceutical industry

Abstract

Extending the period of the market exclusivity and responding properly to the recent agglomeration of patent expiries are pivotal to the success of pharmaceutical companies. Declining R&D productivity, rising costs of commercialization, near-term patent expirations for many top-selling drugs are forcing companies to adopt new systems to introduce innovative products to market and to focus on strategies that increase the returns from the existing product portfolio. This systematic review explores various strategic and tactical management approaches by synthesizing the relevant literature and practical examples on patent expiration strategies. It further discusses how the mix of competition policies and strategic instruments can be used to maintain declining revenue streams from the blockbuster business model of the pharmaceutical industry. The review provides a comprehensive overview of the research on various strategies, offers both theoretical and practical guidelines for strategy transformation that companies can use to prolong the market exclusivity, and identifies knowledge gaps that needed to be addressed in order to improve efficiency in policy design.