Despite enormous investments in research and development (R&D), the number of new drugs introduced into the market by major pharmaceutical companies began to decline as the golden age of the pharmaceutical industry(1996-1999)ended. The so-called “year 2010 problem”, with the patents for many blockbuster drugs expiring in the year, is presenting a very urgent managerial challenge for them. Many of them are trying to find an answer in life cycle management(LCM)to extend the product life cycles of the existing patent drugs. Typical tools for the LCM include development of new formulations, new combinations of drugs, and addition of new indications.
In this study, we examine the development of combination drugs in the US market and in Japanese market, on the basis of FDA and JAPIC database. Combination drugs have natural advantages for consumers; they tend to cost less than individual drugs, have less adverse effects to and lower compliance costs. In fact, in the US, development of combination drugs is regarded as one of the most powerful tools for LCM. It has been adopted by a wide range of companies, from generic-drug manufacturers to leading pharmaceutical companies. In contrast, in Japan where strict regulations on combination drugs had remained in effect until 2005, product developments had began only after 2005, and they started to result in approval around 2009 and 2010. But the number of such drugs is still very small, and multi-national companies who had brought in products that sold well abroad dominate the small Japanese market.
We also examine the stage of the product cycle at which new combination drugs was developed for these two markets during the 10-year period from 2000 to 2009. The stage of the product cycle is measured by the length of time from the approval of drugs with a single active substance to the approval of new combination drugs. Our analysis of the US market reveals that the combination drugs have been developed not just toward the end of the product cycle, but frequently in its growth stage to promote early increases in sales. We also provide the prevalence of the new combination drugs by the main indications of these drugs in Japan and the US. Based on the result of this comparison, we considered the differences in the development of new combination drugs between Japan and the US and the reasons for these differences.
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