63 Food and Drug Law Journal 823-864 (2008).
At the turn of the 21st century, Schering-Plough and AstraZeneca, two of the world’s largest pharmaceutical companies, both anticipated losing marketing exclusivity on their largest and most profitable drugs. Both companies employed similar, multi-faceted strategies in their attempts to protect and extend these multibillion dollar franchises. Yet, the two companies experienced dramatically different results. Where AstraZeneca’s follow-on product flourished and earned the company billions of dollars, Schering- Plough’s product did not reach even a quarter of its predecessor’s sales, resulting in a major reorganization of the company’s operations and management. Ultimately, the differing results can be attributed to AstraZeneca’s ability to create the requisite pre-conditions for market acceptance of its follow-on product. AstraZeneca conducted head-to-head trials between the original blockbuster and its follow-on; controlled the transition of patients from the predecessor drug to the follow-on by launching the follow-on product while its predecessor still had marketing exclusivity; and secured preferential reimbursement positions on formularies for its follow-on product.