Lipitor Marketing
A potential problem for Pfizer Lipitor brand and their R&D activities, as well as their business in general, is the fact that Lipitor will soon lose its patent protection. The problem is that they do not have any suitable replacements for the revenue that will soon be lost due to the emergence of generic drugs following a branded drugs loss of patent protection. Their main source of revenue, Lipitor (sales of $10 billion last year), will lose its patent protection in 2010.
4 Alternative/Suggested Solution Above Figure highlights 5 possible marketing strategies solutions that Pfizer can make to face the problem of Lipitor patent expiry and threat of generics capturing market share & price competition war.
4.1 Divest Strategy
Divest strategy involves cutting expense related with promotions & researches once Lipitor faces direct competition from similar drug generics and use the savings towards other brands that still have patent protection. Along the way, Divest strategy might involve price increases to take advantage of higher brand awareness among patients, doctors, media,…etc. However, this will also result in lowest brand building as brand is not supported and price competition.
The success of this strategy hinges on the inertia of doctors, patients and the other stakeholders (pharmacists, HMOs, governments). When their motivation to switch to the newly-available generic is low, either because of low financial incentives or strong attachment to the brand or to the value of brand equity for funding research and development, such a strategy can deliver high profitability, at least over the short term. Over the longer term, however, the profitability of this strategy depends on the elasticity of the other still-patent protected drugs to the additional promotional investments.
4.2 Innovate Strategy
Innovate strategy involves introducing a completely new molecule, Pfizer can launch new forms, demonstrate effectiveness for new indications. This way, Divest
4 Alternative/Suggested Solution Above Figure highlights 5 possible marketing strategies solutions that Pfizer can make to face the problem of Lipitor patent expiry and threat of generics capturing market share & price competition war.
4.1 Divest Strategy
Divest strategy involves cutting expense related with promotions & researches once Lipitor faces direct competition from similar drug generics and use the savings towards other brands that still have patent protection. Along the way, Divest strategy might involve price increases to take advantage of higher brand awareness among patients, doctors, media,…etc. However, this will also result in lowest brand building as brand is not supported and price competition.
The success of this strategy hinges on the inertia of doctors, patients and the other stakeholders (pharmacists, HMOs, governments). When their motivation to switch to the newly-available generic is low, either because of low financial incentives or strong attachment to the brand or to the value of brand equity for funding research and development, such a strategy can deliver high profitability, at least over the short term. Over the longer term, however, the profitability of this strategy depends on the elasticity of the other still-patent protected drugs to the additional promotional investments.
4.2 Innovate Strategy
Innovate strategy involves introducing a completely new molecule, Pfizer can launch new forms, demonstrate effectiveness for new indications. This way, Divest