Indication Expansion Opportunities For Successful Lifecycle Management

H E A LT H C A R E
Indication Expansion
Opportunities for successful lifecycle management
By Alison Sahoo
Alison Sahoo
Alison Sahoo is a pharmaceutical industry analyst with more than 10 years of

experience researching the development of medicines and medical devices. She holds a
B.S. in Physics from McGill University and an M.B.A. in International Business from
Rutgers University.
Copyright © 2007 Business Insights Ltd

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Table of Contents
Executive Summary 10
Introduction 10
Extension to related indications 11
Extension to new applications 12
Pediatric and special population extensions 13
Extension of usage conditions 14
Comparison of indication expansion strategies 15
Chapter 1 Introduction 18
Summary 18
The importance of indication expansion 19
When an indication expansion is appropriate 19
Types of indication expansion 22
Expanded drug usage conditions 22
Extension to related indications 23
Extension to additional indications 23
Prerequisites for a successful indication expansion 25
Objectives of indication expansion 26
Benefits of indication expansion 27
Building additional revenue streams for a drug 29
Mitigating the effects of patent expiration 30
The value of patents 30
Types of patents 31
Cost containment and the rise of generics 32
United States 32
United Kingdom 35
Germany 36
France 36
Italy 37
Spain 37
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Impact on drug revenues 38
Expiring patents on blockbusters 39
Patent challenges 40
Case study: Lipitor 40
Limitations of indication expansion 42
Trends in indication expansion 44
Indication Removal 45
Conclusion 45
Chapter 2 Extension to related indications 48

Summary 48
Introduction 49
Treatment-prevention extensions 49
Disease severity extensions 50
Case study: Aricept 52
Extensions to disease variants 53
Case study: Hycamtin 56
When an indication extension is appropriate 57
Objectives of indication extension 58
Benefits of indication extension 59
Limitations of indication extension 62
Conclusion 64
Chapter 3 Extension to new applications 66

Summary 66
Introduction 67
When a new application extension is appropriate 69
New application extensions within drug families 70
Case study: Acomplia 70
Objectives of new application extension 73
Benefits of new application extension 74
Repositioning 75
Case Study: Lyrica 77
Case Study: Botox 79
Limitations of new application extension 82
Conclusion 85
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Chapter 4 Pediatric and special population
extensions 88
Summary 88
Introduction 89
Pediatric extensions 91
Gender-based extensions 93
Geriatric extensions 93
When a pediatric or special population extension is appropriate 95
Objectives of pediatric and special population extensions 95
Benefits of pediatric and special population extensions 96
United States 97
Pediatric Research Equity Act of 2003 98
Chances of Pediatric Exclusivity Renewal in 2007 99
Europe 100
Case study: Claritin and Zyrtec 100
Limitations of pediatric and special population extensions 102
Case study: Norvasc 103
Conclusion 105
Chapter 5 Extension of usage conditions 108

Summary 108
Introduction 109
Monotherapy extensions 111
Case Study: Topamax 112
Combination therapy extensions 113
Other usage extensions 115
When a usage extension is appropriate 116
Objectives of usage extension 119
Benefits of usage extension 119
Case study: Femara 120
Limitations of usage extension 122
Case study: torcetrapib 122
Conclusion 124
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Chapter 6 Comparison of indication
expansion strategies 126
Summary 126
Introduction 127
Conditions under which each indication expansion strategy is
appropriate 127
Comparative benefits of each indication expansion strategy 129
Comparative limitations of each indication expansion strategy 131
Combining indication expansion strategies 133
Case Study: Singulair 134
Case Study: Taxotere 136
Conclusion 139
Chapter 7 Appendix 142

Research methodology 142
Index 143
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List of Figures
Figure 2.1: Breakdown of new indication launches by therapeutic Area, 2005 21
Figure 2.2: Comparison of drug development costs by strategy 28
Figure 3.3: Disease characteristics supporting indication extension for disease variants 55
Figure 4.4: Botox indications and revenues, 2000 – 2006 81
Figure 4.5: Pricing opportunities and threats for a new drug indication 84
Figure 5.6: Timeline of Zyrtec & Claritin US pediatric extensions, 1994 – 2006 101
Figure 7.7: Comparative appropriateness of indication expansion strategies 128
Figure 7.8: Comparative benefits of indication expansion strategies 130
Figure 7.9: Comparative limitations of indication expansion strategies 132
Figure 7.10: Benefits vs. limitations for indication expansion strategies 133
Figure 7.11: Singulair indications and revenues, 2002 – 2006 136
List of Tables
Table 2.1: Selected indication expansions for US commercialized drugs 20
Table 2.2: Revenues and patent expirations for selected companies’ blockbusters, 2006 39
Table 3.3: Selected indication extensions for US commercialized drugs 51
Table 3.4: Impact on global revenues of indication extensions of selected drugs 60
Table 3.5: Selected indication extension initiatives for US commercialized drugs, 2007 62
Table 4.6: Selected new application extensions for US commercialized drugs 68
Table 4.7: Approved and non-approved indications for anti-depressants in the US, 2007 71
Table 4.8: Impact on global revenues of new additional extensions of selected drugs 75
Table 4.9: Selected repositioning specialists 77
Table 4.10: Selected new application extension initiatives for US commercialized drugs 79
Table 5.11: Selected new application extension initiatives for US commercialized drugs 90
Table 5.12: Non-approved pediatric usage for US commercialized drugs 92
Table 6.13: Selected usage extensions for US commercialized drugs 110
Table 6.14: Selected usage extension initiatives for US commercialized drugs, 2007 118
Table 7.15: Taxotere indication expansions, 1999 - 2006 138
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8
Executive Summary
9
Executive Summary
Introduction
An indication expansion broadens a drug’s usage beyond its original intended use.
The most common types of indication expansion include extending the drug’s use
to pediatric populations, related conditions or other diseases.
In addition to enlarging the target market for the drug, indication expansion can
also help delay generic competition, since originator companies that pursue
significant new indications receive extended periods of exclusivity.
Generic competition is a strong threat to branded products, particularly

blockbusters, since generics typically cost less than half the price of their branded
counterparts; usage of generics is strong and rising in the US, where both public
and private health care plans continue to focus on cost containment.
Several forms of indication expansion may be utilized, including expansion of

usage of the drug under more flexible conditions; extension of the drug’s usage to
related indications; or extension of the drug’s original usage to new patient
populations;
The chief benefit of the strategy is the gain of an additional period of data
exclusivity and/or patent protection, which can delay the impact of generic
competition. Despite some limitations and lack of clarity resulting from the new
European pharmaceutical legislation, this benefit has largely been preserved.
The greatest limitation of an indication expansion is the ability of generic

manufacturers to introduce a drug by excluding the new indication from the label.
This is a particular problem in the US, where off-label prescribing is common.
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Extension to related indications
The objective of an indication extension is to increase a drug’s revenues by adding
additional uses that are closely related to the drug’s original indication; most drugs
with extended indications experience market-beating revenue growth.
Indication extensions include extension of a product from treatment to prevention

or vice versa; expansion of a product to more or less severe forms of a disease; and
inclusion of closely-related variants of a condition.
Declining sales as a result of competition or other factors is a key driver of

indication extension.
Many drugs are extended into multiple similar indications but some may be
extended into a smaller number of larger indications; the latter approach tends to
offer greater returns for a similar level of investment.
Factors that make an indication extension attractive in one region are often present
in others so drug makers typically pursue similar indication extensions in the US,
Canada and Europe.
A manufacturer may receive an extension of the drug’s market exclusivity;

however, this benefit is not as significant as it is for other indication expansion
strategies such as an expansion into an entirely new therapeutic area.
Indication extension is not always associated with extended exclusivity periods.

Furthermore, recent regulatory changes have limited exclusivity extensions in some
regions.
As patent expirations for blockbuster drugs loom and generic competition

heightens, indication extension will become an increasingly important strategy to
maximize drug revenues.
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Extension to new applications
New application extensions are therapeutically distinct from a drug’s original
indications.
Compared with other types of indication expansions, new application extensions

occur less frequently due to their relatively high cost and lack of data on how the
drug will affect other conditions.
Certain drug families, like anti-depressants, have been found to address a wide
range of loosely related conditions, and because of this, are now being closely
studied by their developers for appropriate new application extensions.
The benefits of a new application extension are twofold: to cost effectively increase
the revenue for a drug by increasing its uses, and to obtain an extension of the
drug’s market exclusivity.
In 2006, the pharmaceutical industry embraced a systematic new means to develop

new application extensions for previously researched products called
“repositioning” in which an entire library of failed experimental compounds is
methodically analyzed to identify new therapeutic applications.
With the introduction of new repositioning services, new application extensions are
likely to become an even more important indication expansion strategy over the
next several years.
Because of the significant financial benefits that many manufacturers have been
able to realize from such new application expansions, drug developers continue to
pursue new application extensions for leading products.
Limitations of new application extensions are related to the market for the new
indication; products that are uncompetitive are unlikely to benefit from a new
application extension.
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Pediatric and special population extensions
The expansion of a drug’s usage to special populations primarily focuses on
pediatric extensions, although some manufacturers try to extend drug usage to other
groups such as men (for drugs initially approved in women) or women (for
medications originally approved for use by men).
Gender-based extensions occur relatively infrequently, as the group of drugs

indicated originally for only one gender is relatively small.
As of early 2007, approximately three quarters of all medicines used by children

have not been adequately researched in children.
More so than other types of indication expansions, the main objective of a pediatric
extension is to obtain an additional period of market exclusivity for a product; this
is due both to the small size of the pediatric market and physicians’ willingness to
prescribe medicines off-label for children.
In both the US and Europe, drug makers are awarded an additional six months of
exclusivity in exchange for providing data on the effects of the drug in children.
Pediatric market exclusivity can be extremely cost effective; blockbuster drugs

generate more than $2.7m per day for each $1bn in annual sales but pediatric
testing typically costs just $4m per drug.
In December 2003, President Bush signed the Pediatric Research Equity Act,
giving the FDA the authority to require pediatric studies of drugs.
The US pediatric exclusivity law that provides for pediatric extensions is due for
review in late 2007 and may not be renewed; the European law will be reviewed in
2012.
A pediatric extension does not preclude the threat of infringement from generics
manufacturers seeking to invalidate a drug’s intellectual property so they can gain
earlier access to the market.
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Extension of usage conditions
Usage extension involves expanding the conditions under which a drug may be
used by providing for a variation in the drug’s administration exclusive of
reformulations.
Typical usage extensions include expanding a drug’s usage from combination

therapy to monotherapy or vice versa; allowing a drug to be taken without food; or
elimination of requirements that patients have failed other drug therapies.
Usage extension is less common than other types of indication expansion.
Extending the usage of a drug that was initially approved as part of combination
therapy to monotherapy is often appealing for a variety of reasons so many
manufacturers of products approved in combination therapy seek to expand usage
of those medications to monotherapy.
Usage extensions from monotherapy to combination therapy are less common, but
can be a useful way to broaden a medication’s utility when the other medications
with which the drug is to be used are extremely popular.
Usage extensions may make a product more convenient to take, such as by

eliminating the requirement to take other medications or food concurrently; they
may also broaden the population of patients who may use the drug, typically by
extending a drug’s usage from second line to first line therapy.
Although drug developers must invest in additional clinical research to support an

application for a usage extension, this investment is typically lower than for other
types of indication expansion.
Unlike other indication expansion strategies, such as new application extensions

and pediatric extensions, usage extensions do not typically extend a drug’s market
exclusivity. Therefore, they cannot help delay a decline in drug revenues caused by
loss of market exclusivity and resulting generic competition.
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Comparison of indication expansion strategies
Each indication expansion strategy offers distinct advantages and disadvantages.
Extension to related indications and extension to new applications are the most
appropriate strategies to address declining drug revenues as they provide an
opportunity to significantly broaden the drug’s usage and/or extend its period of
market exclusivity.
Pediatric extensions can also be used to provide some additional market

exclusivity.
Extension of usage conditions is most appropriate for special situation products,

such as drugs initially approved as a second-line therapy or as combination therapy.
Overall, an extension to new applications offers the greatest level of benefit,

followed by extension to related indications and pediatric & special population
extensions, with extension of usage conditions offering the lowest level of benefit.
An extension to new therapeutic applications offers the longest market exclusivity

extension, which is often more important to manufacturers than potential sales in
the new indication.
At the same time, an extension to new applications is challenged by the greatest

limitations, followed by usage extensions and extensions to related indications;
pediatric & special population extensions offer the lowest level of limitations.
An extension to new applications is highly dependent upon the drug’s

pharmacology and whether or the not the product can be demonstrated safe and
effective in the new therapeutic area.
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CHAPTER 1
Introduction
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Chapter 1 Introduction
Summary
An indication expansion broadens a drug’s usage beyond its original intended

use. The most common types of indication expansion include extending the
drug’s use to pediatric populations, related conditions or other diseases.
In addition to enlarging the target market for the drug, indication expansion can
also help delay generic competition, since originator companies that pursue
significant new indications receive extended periods of exclusivity.
Generic competition is a strong threat to branded products, particularly

blockbusters, since generics typically cost less than half the price of their branded
counterparts; usage of generics is strong and rising in the US, where both public
and private health care plans continue to focus on cost containment.
Several forms of indication expansion may be utilized, including expansion of

usage of the drug under more flexible conditions; extension of the drug’s usage to
related indications; addition of entirely new therapeutic indications; or extension
of the drug’s original usage to new patient populations.
The chief benefit of the strategy is the gain of an additional period of data
exclusivity and/or patent protection, which can delay the impact of generic
competition. Despite some limitations and lack of clarity resulting from the new
European pharmaceutical legislation, this benefit has largely been preserved.
The greatest limitation of an indication expansion is the ability of generic

manufacturers to introduce a drug by excluding the new indication from the label.
This is a particular problem in the US, where off-label prescribing is common.
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The importance of indication expansion
An indication expansion broadens a drug’s usage beyond its original intended use,
allowing the manufacturer to expand sales of the drug. This furthers the manufacturer’s
goal of maximizing usage for its products and can be particularly important in the
present era of rising drug development costs. With new medicines costing more than
$800 million from concept to commercialization, manufacturers must optimize sales to
both recoup development costs and maximize their return on investment. Expanding a
drug’s indications can save up to 60% or more compared with the cost of developing an
entirely new product from scratch since the manufacturer can utilize early stage safety
testing. The financial benefit is further enhanced by time savings resulting from leap-
frogging early stage studies, since every day a new indication is delayed can cost a
drug maker $1 million or more in lost revenue.
When a drug’s indications are expanded early in its lifecycle, its manufacturer can
significantly extend its sales by broadening the population of potential patients.
When new indications are approved later in a product’s lifecycle, the chief benefit is
the gain of an additional period of data exclusivity and/or patent protection, which can
delay the impact of generic competition. This can be particularly helpful in Europe,
which generally experiences lower levels of off-label drug use than the US, serving to
limit generic erosion of patented indications.
When an indication expansion is appropriate
Indication expansion is a common lifecycle management strategy, with more than three
quarters of the 50 top selling brands in 2006 having had at least one additional
indication approved since their initial launch in the US. Several drugs have been
approved for a variety of new indications, many of which may be related to the original
indication, as shown in Table 1.1. Because many drugs are initially approved for
relatively narrow, specific indications, it is often appropriate and relatively
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straightforward for their manufacturers to explore their use in conditions that are
closely related.
Table 1.1: Selected indication expansions for US commercialized drugs
Company Drug Original Indication Expanded Indication Date of

Clearance
Merck Ivanz Infections Prophylaxis of surgical site infection Dec 2006

(SSI) following elective colorectal surgery
Pfizer Celebrex Osteoarthritis pain Juvenile rheumatoid arthritis Dec 2006
Abbott Humira Rheumatoid arthritis Inhibiting structural joint damage and Nov 2006
improving physical function in PsA
Pfizer Aricept Mild to moderate Severe Alzheimer’s disease Oct 2006
Alzheimer’s disease
J&J Risperdal Depression Irritability associated with autistic Oct 2006
disorder
GSK Lamictal Epilepsy Primary Generalized Tonic-Clonic Sep 2006
(grand mal) seizures
BMS Plavix Reduction of athero- Reduce the rate of death from any cause Aug 2006
sclerotic events and the rate of combined re-infarction,
stroke or death in patients with acute ST-
segment elevation myocardial infarction
Abbott Humira Rheumatoid arthritis Ankylosing spondylitis Jul 2006
GSK Relenza Influenza Prevention of influenza Mar 2006
Novartis Femara Postmenopausal women After surgery in post-menopausal with Dec 2005
with women hormone hormone-sensitive breast cancer
-sensitive breast cancer
who had taken tamoxifen
Merck Singulair Asthma Exercise-induced bronchospasm Dec 2005
Schering- Avelox Infections Intra-abdominal infections Nov 2005
Plough
Wyeth Effexor Depression Panic attacks Nov 2005
Abbott Humira Rheumatoid arthritis Psoriatic arthritis (PsA) Oct 2005
J&J Remicade Rheumatoid arthritis Ulcerative colitis Sep 2005
Merck Singulair Asthma Perennial allergic rhinitis Aug 2005
J&J Levaquin Infections Bacterial sinusitis Aug 2005
Pfizer Celebrex Osteoarthritis pain Ankylosing spondylitis Jul 2005
Pfizer Lyrica Diabetic peripheral Adjunctive therapy for adults with Jun 2005
neuropathy and post- partial onset epileptic seizures
herpetic neuralgia
J&J Remicade Rheumatoid arthritis Psoriasis May 2005
Merck Hyzaar Hypertension Reduction in risk of stroke in patients Apr 2005
with hypertension and left ventricular
hypertrophy
J&J Remicade Rheumatoid arthritis Active ankylosing spondylitis Dec 2004
Roche Xenical Obesity Delay onset of type 2 diabetes in Oct 2004
obese pre-diabetic patients
J&J Topamax Epileptic seizures Migraines Aug 2004
J&J = Johnson & Johnson; GSK = GlaxoSmithKline;
Source: Company news releases and public filings Business Insights Ltd
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Pediatric usage tends to be more complicated, however, requiring comprehensive
clinical trials in children to demonstrate that the drug is efficacious and does not cause
unintended effects. Because the pediatric population is considerably smaller than the
adult population, investing in such studies typically is most appropriate for drugs that
address more common conditions or products with very high prices, such as
biologicals.
As shown in Figure 1.1, infectious disease, central nervous system disorders and
cardiovascular disease are the most popular areas for new indication expansion. This is
due mainly to the large numbers of patient sub-populations in these areas and as a
result, the high commercial value of related products.
Figure 1.1: Breakdown of new indication launches by therapeutic Area, 2005
Immune &
Inflammation Diabetes
7% 4%
Women's Health Infectious
7% Disease
27%
Endocrine
7%
Oncology
11%
CNS
Cardiovascular 22%
15%
Source: Business Insights Business Insights Ltd
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Types of indication expansion
Generally speaking, an indication expansion broadens a drug’s usage beyond its

original intended use. The expanded usage may take a variety of forms, including:
Expanded usage of the drug under more flexible conditions, such as for
monotherapy instead of combination therapy;
Extension of the drug’s usage to related indications, such as the approval of an

antibiotic for specific types of infections;
Addition of entirely new therapeutic indications, such as treatment of additional

diseases or conditions;
Extension of the drug’s original usage to new patient populations, like children
and/or adolescents.
New formulations of a drug, however, such as injectable or transdermal versions of an

oral medication, new oral formats (quick dissolve tablets, gel caps, etc.) or new
administration formats, like the easy-to-use pen injection system that Abbott introduced
for Humira in mid 2006, are not considered indication expansions for the purposes of
this report. Similarly, new dosage forms, fast-acting products and extended
release/long-acting formulations are not included. Approvals in new jurisdictions, such
as Japan, are excluded, as are Rx-to-OTC and Rx-to-BTC switches. Also, category
changes for use in pregnant women (such as movement of a drug from Category C,
indicating no testing in humans, to Category B, reflecting human testing) are also not
included; this is because while such testing expands the data available on a product it
does not typically extend usage of the drug.
Expanded drug usage conditions
Expanded usage conditions generally make a medication easier for the patient to take,
and may also expand the population of patients who are candidates for the drug. They
include:
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Expanded usage of the drug under more flexible conditions, such as for
monotherapy instead of combination therapy or first line therapy instead of second
line therapy;
Earlier usage of the drug in the patient’s treatment program;
Expansion of a drug to maintenance therapy after treatment.
Extension to related indications
The extension to related conditions is one of the most common forms of indication
expansion, since it is often the most straightforward new application to identify and
demonstrate. Such extensions may take several forms:
Extension of a product from treatment to prevention or vice versa;
Expansion of a product to more or less severe forms of a disease;
Inclusion of closely-related variants of a condition.
This latter occurrence is particularly common, since many products are first approved
for very narrow indications and therefore are good candidates for expansion to closely-
related variants. For example, Merck’s Invanz is an antibiotic with broad application in
preventing infections. The drug was first approved in November 2001 as a once-daily
injectable for certain complicated skin and skin structure infections. Since then, its
range of application has been broadened to include complicated intra-abdominal
infections, community-acquired pneumonia, complicated urinary tract infections and
acute pelvic infections.
Extension to additional indications
The addition of large new therapeutic indications can have a very significant effect
upon a drug’s usage. Often, a manufacturer will obtain information from external
sources suggesting a potential new indication. This may arise from physicians,
researchers and others who notice additional therapeutic benefits from a particular
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product, as well as similar competing products that obtain approval for additional
indications. When this latter event occurs, it is not unusual for all the drugs within a
particular class to one by one undergo an indication expansion. This occurred, for
example, when Abbott’s, Amgen’s and Johnson & Johnson’s biological response
modifiers, which were originally approved for treatment of rheumatoid arthritis,
subsequently obtained approval for the treatment of psoriasis and then ankylosing
spondylitis.
New indications may be physiologically related to the initial indication, but nonetheless
represent a distinct therapeutic condition. This was the case when Merck’s Singular,
which was originally approved for the treatment of asthma and was later approved for
treatment of allergies. Both diseases affect the lungs and are caused on a molecular
level by similar physiological processes and often occur in tandem.
For the purposes of this report, indication expansions that build upon prior clearances
for additional indications will be considered additional indications and not indication
extensions. This occurred, for example, when Johnson & Johnson received FDA
approval to market Remicade for maintaining clinical remission and mucosal healing in
patients with moderately to severely active ulcerative colitis (UC) who have had an
inadequate response to conventional therapy. The drug was originally approved for
treatment of rheumatoid arthritis; in September 2005, however, Remicade was
approved for reducing signs and symptoms, achieving clinical remission and mucosal
healing and eliminating corticosteroid use in patients with moderately to severely
active UC who have had an inadequate response to conventional therapy. In May 2006,
the drug was subsequently approved for treatment of another gastrointestinal disease
when the FDA approved its use for reducing signs and symptoms and inducing and
maintaining clinical remission in pediatric patients with moderately to severely active
Crohn's disease who have had an inadequate response to conventional therapy.
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Pediatric and special population extensions
Extension of a drug’s usage to pediatric and other large specialized populations can
significantly expand the product’s user base. They can also serve as an effective means
of delaying generic competition, since regulations in both the US and the EU provide
some additional protection for drugs whose usage is extended.
In this report, indication expansions for pediatric and/or special populations will be
categorized as pediatric and/or special population extensions even when they address a
disease variant (as for indication extensions) or address an entirely new therapeutic
condition (as for new therapeutic indications). This is because a primary driver of such
expansions is often the desire to benefit from the extended exclusivity afforded to
medications with new pediatric clearances.
However, expansion of a drug’s usage to pediatric patients is not appropriate for all
products, however, since many of the most widely-used drugs address conditions that
are most prevalent among older persons. These include medications that lower
cholesterol, control hypertension, address various cardiovascular conditions, mitigate
depression, etc.
Prerequisites for a successful indication expansion
Successful indication expansions require both strategic focus on the product as well as
strong research and development capabilities. Excellent clinical programs are
especially important. Developers must be able to cull information about the drug’s
effect on other conditions from many disparate sources and efficiently conduct trials to
validate or disprove such associations. They must also be able to optimize
administration requirements and make changes to the drug’s format, if necessary, to
accommodate any expanded indications. For example, many medications behave quite
differently in adults than they do in children and adolescents, therefore, extreme care
must be taken to identify any variations in pediatric population response and make
appropriate adjustments. This may include either raising or lowering dosages, adjusting
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dosing frequency, varying a formulation or even altering a chemical composition or
certain ingredients.
Objectives of indication expansion
In general, the objectives of indication expansion are threefold:
To extend the product’s usage into new patient populations and thereby capture
additional sales;
To match competitive moves;
To protect a product from imminent generic competition.
Some developers employ extensive indication expansion strategies, particularly for

products whose usage can be leveraged to address closely related conditions. For
example, through the end of 2006, Johnson & Johnson had obtained nine US approvals
for new indications for its Remicade, a biological response modifier initially cleared to
market for the treatment of rheumatoid arthritis in 1998. The most recent of these,
treatment of severe plaque psoriasis, was granted in September 2006. Johnson &
Johnson continues to investigate additional uses for Remicade. Similarly, Allergan
continues to expand usage of its muscle-freezing botulinum toxin, Botox, with the drug
cleared for more than 20 unique indications; Allergan as well as independent
researchers are continuing to study Botox’s ability to address other medical conditions.
Some drug developers are attempting to focus exclusively on indication expansions.

Aspreva, for example, will use a proprietary screening program to identify late stage
and approved medicines that show potential to provide a significant benefit in the
treatment of less common conditions. Aspreva will then acquire the rights to develop
the drug and obtain regulatory approvals in these new indications from the drug’s
original developer. This business development strategy is still in the early stages of
implementation however, since as of early 2007, Aspreva has not initiated any
development work on in-licensed compounds; instead, Aspreva is working to expand
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the indications for CellCept, a product it developed in-house then licensed to Roche for
use in organ transplant rejection.
Benefits of indication expansion
In its simplest terms, the benefit of indication expansion is to cost effectively support a
drug’s sales, either through the expansion or the defense of current sales.
Sales expansion occurs when new patients are added to the drug’s user base, growing
revenues for the drug. These new revenues may be the result of entirely new uses for
the drug, such as usage in a new therapeutic application, or somewhat modified uses
such as an extension of the drug’s original usage format, expansion to a related
therapeutic indication or the ability to use the drug in new patient populations, such as
children or adolescents.
An indication expansion may also be used to defend against erosion of current sales
when competition from other products, particularly generics, is imminent. Expanded
indications for a product threatened by competitors can help replace sales losses with
revenues from new uses; it can also trigger regulatory protections that provide
additional exclusivity periods. An additional period of data exclusivity and/or patent
protection can be particularly helpful in Europe, which generally experiences lower
levels of off-label drug use than the US, serving to limit generic erosion of patented
indications.
Despite some limitations and lack of clarity resulting from the new European
pharmaceutical legislation, this benefit has largely been preserved. The regulatory
review introduced the potential for innovator companies to benefit from an additional
one year of market exclusivity (for the whole product) when receiving approval for a
“significant new indication” during the product’s first eight years on the market. New
indications filed during the first eight years the product is on market are expected to
gain exclusivity for the product as a whole, while exclusivity for new indications for
products with well established use (on the market for over 10 years) is likely to apply
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to the new indication only. This provision of the new legislation will not apply
retrospectively, therefore the first generics applications made under the 8+2+1 system
will not occur until late 2013 (eight years following official implementation of the law
in November 2005), and the generic launches can be expected no sooner than 2 years
after this date. All products approved up to date of implementation will qualify for the
existing 6 or 10 years of exclusivity.
Figure 1.2: Comparison of drug development costs by strategy
New Chemical Entity

Cost
Drug discovery & screening,
Toxicology,
Other safety studies
Chemical composition,
Reformulation
Dosing studies
Efficacy trials
Regulatory filing
Source: Author’s Analysis Business Insights Ltd
It should be noted that indication expansion is considerably more cost effective than the
development of entirely new molecules and is often more economical than other
lifecycle management strategies such as reformulation, as shown in Figure 1.2. This is
because drug developers can utilize early stage studies demonstrating safety of the
product, conducting only Phase III clinical studies to validate efficacy in the new
indication. With discovery to commercialization costs of more than $800m per new
chemical entity, this can save drug makers $500m or more for each new indication.
Furthermore, while reformulation and next generation launch require considerable
investment in laboratory efforts to alter a drug’s composition and/or format, indication
expansion utilizes a product in its existing format. Because of these important benefits,
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drug makers are increasingly citing indication expansion as a key product development
strategy.
Building additional revenue streams for a drug
Indication expansion may be pursued both proactively and reactively to build revenue
for a drug. Proactive pursuit of this strategy involves adding additional revenue
streams, in the form of sales from new indications, to build upon revenues generated by
a drug’s original indication. For both very large and very small drugs, this makes sense
as a means to leverage clinical development already invested in the product and
introduce new uses for the drug at a fraction of the development cost required to
commercialize an entirely new molecule. Therefore, the vast majority of drug
developers continuously look for new uses for their compounds that can augment
existing revenue streams.
Reactive indication expansion can be an appropriate response to an external event that

threatens to reduce a drug’s revenues. Although patent expiration and the introduction
of low cost generics is the most common cause of sales declines, other events may also
trigger these declines and cause a manufacturer to utilize indication expansion as a
means to generate additional revenue. For example, Pfizer’s Celebrex came to be
associated with safety risks following the 2004 market discontinuation of another
COX-2 inhibitor, Merck’s Vioxx, which had been linked to an increased incidence of
cardiovascular effects. Pfizer responded to the sales decline of Celebrex with an
indication expansion strategy, receiving FDA clearance in July 2005 for a sixth
indication for Celebrex (ankylosing spondylitis - a form of spinal arthritis that affects
more than one million people in the US) and pediatric exclusivity in August 2006. The
pediatric expansion extended Celebrex’s US patent to May 2014. Pfizer is continuing
to expand Celebrex’s indications, filing in April 2006 with the EU for permission to
market Celebrex for ankylosing spondylitis and filing in June 2006 with the FDA for
permission to market the drug for juvenile rheumatoid arthritis.
29
Mitigating the effects of patent expiration
When a branded medication loses patent protection, bioequivalent generic versions of

the original compound can be launched by competitors, invariably at a lower price.
This leads to strong competition for the branded product, which then typically
experiences sharply declining sales and market share. Patent expiries are thus viewed
with considerable apprehension by pharmaceutical companies, particularly if the
affected products are major revenue drivers and/or blockbusters.
The value of patents
Protection of intellectual property through patenting provides the necessary incentive

for drug developers to invest the considerable resources required to develop new
medicines. Patents guarantee market exclusivity for a period of 20 years, during which
time the bulk of the drug’s sales are made. This is important since the demands on
development resources continue to rise each year; furthermore, there is no guaranteed
return on this investment, since the likelihood of a compound in preclinical
development reaching the market is about one in 10,000.
The value of lost revenues following the expiry of a drug patent is most significant for
blockbusters since 50% or more of the value sales of a product may be eroded by
generic competition within the first few months after patent expiration. As companies
marketing blockbusters are often dependent on a handful of such products for their
revenues, the patent expiration of high selling products has the greatest influence on
those companies and markets. Therefore, strategies to protect blockbuster revenues
and, gradually, to replace them with new products are essential.
Most pharmaceutical products have annual sales below $500m and are marketed by a
wide range of companies, from domestic manufacturers to large multinationals.
However, the impact of patent expirations on smaller products can be as great for a
small pharmaceutical company as those on blockbuster drugs for a market leader. For
example, specialty companies typically expand via a growth-by-acquisition strategy,
30
relying heavily on sales of one product to fuel development of others. As a high-selling
product approaches patent expiration, such companies are forced to acquire a
replacement growth driver. As competition for new product acquisitions intensifies,
pushing up acquisition prices, and as specialty companies require ever-larger products
to maintain/increase their growth rates, their need for proactive patent and lifecycle
management strategies also rises. Often, the strategies adopted by companies to protect
or replace blockbusters are also applicable to smaller companies with individual
product sales below that level.
This high value of patents, and resulting losses to the company upon their expiration, is
driving increased focus on lifecycle management strategies. In a survey of drug
company executives conducted by Business Insights, 79.1% of respondents said patent
expirations are very important in driving lifecycle management, compared with
considerably fewer respondents citing other issues, such as shrinking product pipelines
(56.1%), competitive pressures (54.0%) and financial pressures (38.0%).
Types of patents
In the pharmaceutical industry, international patent legislation typically encompasses

four statutory classes of patentable inventions. These include:
Process patents;
Product patents;
Composition patents;
Use patents.
Process claims refer to the method used to produce a pharmaceutical rather than to the
chemical itself. Since it may be possible to develop the same chemical through several
different methods, it is often difficult to protect pharmaceutical products solely with
process patents or to prove infringement of process patents.
31
Product patents protect tangible products. These are typically commercially viable
entities that are ready to be launched or already on the market. In the pharmaceutical
industry, product patents are usually applied to medical devices, such as drug delivery
mechanisms, since few manufacturers would want to wait until they had performed
clinical trials on a compound (and, therefore, developed it into a product) to apply for
patent protection.
Composition patents are filed on the active ingredient and protect its molecular
structure from replication. Along with use patents, which protect the application of a
particular compound to a certain therapeutic indication, they are often among the key
patents that challengers must invalidate in order to introduce a generic product. Use
patents require utility, novelty and non-obviousness.
Cost containment and the rise of generics
In both the US and Europe, generics have become an increasingly popular means to
mitigate the effects of continually rising drug costs. However, usage of generics can
vary considerably across different countries, depending upon the size of the market,
degree of free market pricing and structure of the health care system.
United States
The US is the world’s single largest market for pharmaceutical products, accounting for
about 45% of total global sales. In 2006, US spending for prescription drugs is
estimated at $220m, or about 11% of all US health care spending. Annual drug price
increases, which are typically in the high single digits or low double digits, combined
with an aging population that is using more medication, has resulted in ongoing growth
in prescription drug spending which continues to outpace that of all other health care
services. Drug spending, therefore, continues to be targeted for cost containment.
Unlike in Europe where pharmaceutical prices are tightly regulated, the US operates a
free pricing system for drug products, with prices determined by market forces. This
disparity has led to higher prices for branded products in the US than in Europe. It has
32
also resulted in cost containment measures at both the public and private sector levels
that have historically focused on negotiating rebates from pharmaceutical
manufacturers and/or instituting incentives for consumers to utilize lower cost
medicines rather than implementation of strict price controls. While the public sector
has not been able to substantially increase patients’ out-of-pocket payments as a cost
containment mechanism, many of the initiatives in private sector health plans have
focused on passing an increasing proportion of costs to the consumer through higher
pharmacy co-payments, tiered formularies, etc. With administration of Medicare
prescription drug coverage from 2006 being contracted out to private sector providers,
utilization of patient-driven cost controls is expected to increase.
The public sector, largely through the federally-run Medicare program for senior
citizens and the state-operated Medicaid programs for low income individuals,
currently accounts for about one fifth of US prescription drug spending. The two
programs together cover more than 60 million persons. While Medicare had not
historically covered prescription drugs, the Medicare Modernization Act of 2003
introduced outpatient prescription drug coverage to the program and has resulted in an
ever greater need to focus on pharmaceutical prices as a target for cost containment, in
particular the program is proving to cost significantly more than originally predicted.
Virtually all of the state Medicaid programs are implementing drug cost containment
measures, with increasing numbers of states requiring prior authorization for
prescriptions, introducing a preferred drug list, seeking supplemental rebates,
instituting new or higher co-payments, reducing the dispensing fees paid to pharmacists
and instituting aggressive generic substitution policies. More than three dozen states
have mandatory generic substitution, which requires the generic version of a drug to be
dispensed to Medicaid beneficiaries when available.
The net effect of these trends on the usage of branded prescription drugs in the US may
be mixed. On the one hand, the use of on-patent brands is likely to increase among
Medicare beneficiaries who were previously uninsured and could not afford the
products. On the other, the increased cost of insuring these individuals is likely to put
33
pressure on US public healthcare funds, spurring the development of even more
aggressive cost containment policies than those already in place.
Private sector payers, which comprise almost 80% of prescription drug spending, are
also implementing cost containment initiatives that will likely result in increasing use
of generics. Historically, this has focused on negotiating rebates with pharmaceutical
companies in return for formulary inclusion, but as costs continue to rise, healthcare
plan sponsors are becoming dissatisfied with these efforts since the full savings of this
are usually not passed onto them. The increase in generics is supported by a report by
Dietz in August 2004, which found that over 80% of employer-provided drug coverage
programs used tiered plans as a method of containing costs in 2003, compared with
only 25% of schemes in 1993. Under a tiered plan, more generous coverage is offered
for generic drugs.
To further encourage patient selection of generics, pharmacy benefit managers (PBMs)

are increasingly promoting generic and even over-the-counter options to plan
participants. For example, Medco Health Solutions’ Generics First program provides
physicians with generic samples in four therapeutic categories - non-steroidal anti-
inflammatory drugs (NSAIDs), gastrointestinal, anti-infectives and anti-hypertensives -
and sends clinical pharmacists to meet with physicians to discuss generics. During the
first six months of the program, the generic prescribing rate of participating physicians
increased 22% versus a comparison group of non-participating doctors. The program
was later expanded to include samples of Wyeth’s OTC products Advil and Alavert to
encourage physicians to recommend patients begin therapy with OTC products before
trying prescription drugs. As a result, Medco reports that its generic dispensing rate has
grown from 36% in 2000 to over 50% in 2006. Several Blue Cross/Blue Shield health
plans have also introduced schemes attempting to contain costs by increasing use of
generics.
For the 45m uninsured, as well as Medicare recipients with pharmaceutical expenses
that fall into the non-reimbursed “donut hole” in the MMA’s prescription drug
coverage, importation of drugs from markets with lower drug prices is emerging as a
34
means to make prescription drugs more affordable. In 2006, about $2bn was spent on
drugs imported from Canada and other countries. Although this represents less than 1%
of total US prescription drug revenues, importation could eventually pose a threat to
US drug sales – particularly those of lifestyle drugs like Pfizer’s Viagra (sildenfil)
which are typically not covered by insurance. Drug importation continues to gain
acceptance as a means to contain rising drug costs, with the US Senate approving a bill
in 2006 that would create a Canadian loophole in an FDA ban on importing
prescription medicine into the US.
United Kingdom
In the UK, the number of generic competitors to a brand varies widely with the
formulation and size of the market opportunity. Three years following generic entry for
a large $100m - $500m selling brand, generics are priced at just 40% of the brand price
in the UK, while generic versions of small $10m brands are roughly equivalent in price
to the branded version. Drugs that are available in multiple formulations attract a
higher number of generic competitors than single formulation products, as do brands
with high sales. These relationships are particularly strong in the UK. This is likely to
be due to the relatively free pricing mechanism in the UK, which means that an
increased number of generics directly result in increased levels of price competition,
and increased incentives for generic uptake. This system also means that the number of
generics that can profitably enter a particular product market is directly related to the
size of that market.
When broken down by brand product size, generic market share follows the expected
pattern whereby products with higher branded sales suffer from higher levels of generic
erosion, resulting in higher market share for generics. Companies in the UK generally
raise the price of their brands following generic entry. The exception to this is in the
large $100m - $500m brands, where generic competition is so intense that the
originator has no choice but to reduce its price if it is to retain any market share.
35
Germany
In Germany, intense competition for larger brands has driven generics out of the
market. During the first year and a half following generic entry, the highest selling
$100m - $500m brands face competition from the largest number of generics, but
beyond this, the number of generic competitors falls to below that of smaller brands. At
this point it is likely that the intense levels of generic competition in the larger group
drives prices down to such an extent that it is no longer profitable for an average of 20
generics players to split the market between them, and some players are forced to exit
the market. These larger brands follow a “maximize volume sales” strategy, cutting
their price in order to compete with generics in an attempt to maintain some sales. This
is feasible because of the large market size of the original brands. Meanwhile, those in
the smaller $50m - $100m category follow a “maximize value sales” strategy by
increasing their price, aiming to maximize the return on every unit of branded product
sold.
In contrast to the UK market, there is only a limited correlation between the number of
generics entering the German market, and the size of the market. However, the positive
correlation between number of generics and the degree of generic erosion, as measured
by generic volume market share, seen in the UK is also found in Germany. This
suggests that competitive pricing is a key factor driving uptake of generics in the
German market.
France
Similar to trends seen in the UK, brands with higher pre-patent expiry sales in France
are associated with a greater number of generic competitors. In the French market,
generic erosion is faced by all but the smallest brands as generics reach a volume
market share of about 40%, three years following patent expiry. This may be related to
the tightly controlled generic pricing system, where generics must automatically be
priced 30% - 40% lower than the brand to be eligible for reimbursement and
substitution. This means that while larger brands face competition from a higher
number of generics manufacturers, the number of generic entrants is not closely
36
correlated with the degree of price erosion, hence the incentive for generic substitution
is not increased as more generics enter the market. It is also important to note that
pharmacists do not generally view cost as the most important factor in their dispensing
decision, and therefore a direct correlation between price and degree of generic erosion
would not be expected in the French market.
Italy
In Italy, strict controls over generic pricing have historically broken the linkage
between the number of generics on the market and the degree of brand erosion. Generic
prices in Italy have been around 20% to 30% lower than the brand, and with the
exception of injectable products, remained in this range for the three years following
generic entry. However, the implementation of a new reference price system in 2003
created a two tier system that based reference prices on the cost of the lowest priced
generic. Unlike other systems, products priced above the reference price are no longer
reimbursed up to the reference price, and do not qualify for reimbursement at all.
Branded companies have therefore begun dropping their prices once entry of generics
results in a decline in the reference price, as they would otherwise risk not being
dispensed by pharmacists.
Spain
In Spain, there is a marked difference in the number of generics companies entering the
market depending upon the size of the original brand. While an average of more than
20 generics companies introduce products within three years following patent
expiration of both mid-size $50m - $100m and large $100m - $500m brands, less than
10 generic products are introduced after patent expiration of small $10m - $50m
brands.
Similar to the situation observed in France and Italy, there is no relationship between
the number of generic entrants and the price of a generic or degree of generic erosion.
As in these other countries, this may be explained by the high degree of control over
generic prices, through the fixed 20% - 30% discount to the brand and reference
37
pricing, that serves to break the direct linkage between number of generics and price,
and therefore between number of generics and the incentive for generic uptake.
However, for brands with high sales of $100m - $500m, originator companies tend to
reduce their prices in response to generic competition. It is likely that in brands of this
size, the large market makes it feasible for branded companies to follow a “maximize
volume sales” strategy after patent expiry, aiming to maintain volume sales by
competing with generics on a cost basis. However, for smaller brands, the low levels of
generic erosion found in the Spanish market mean that branded companies can best
protect their revenues by maintaining prices at current levels. Going forwards, branded
companies may need to reconsider this strategy as revenues will increasingly be
threatened by generic erosion caused by further development of the Spanish generics
market.
Impact on drug revenues
The ultimate impact of patent expiration on branded drug revenues is directly

proportional to the likelihood of generic competition. This, in turn, is based upon two
key factors – the attractiveness of a particular therapeutic area to generics
manufacturers and the nature of the condition treated. The large market size of the
cardiovascular, infectious diseases and other areas attracts the attention of numerous
generics players. In addition, and the blockbuster status of many of the drugs within
these categories not only provides a significant opportunity for generics but also means
that the drugs are often the focus of cost containment initiatives by healthcare payers,
which is likely to drive uptake of generics upon launch. Conditions that lend
themselves well to switching patients from branded to generic products are those with
relatively lower levels of severity and/or conditions that are not chronic. As severity
and/or chronicity rises, physicians and patients become increasingly reluctant to
abandon viable therapies for alternate medications, even though they contain the same
active ingredients.
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Expiring patents on blockbusters
By 2008, an unprecedented number of blockbuster drugs will lose patent protection,

threatening the global blockbuster market which had driven industry growth. From
1994 to 2000, for example, the compound annual growth rate for global blockbuster
revenues was an estimated 23.6% and in 2000, blockbusters accounted for 34% of a
blockbuster marketing company’s total revenues, on average. For some companies,
blockbusters have been even more important, comprising more than 40% of the total
revenues of Bristol-Myers Squibb and Eli Lilly, over 50% of Pfizer’s total revenues,
more than 60% of Merck’s revenues and virtually all of Amgen’s sales, as shown in
Table 1.2.
Table 1.2: Revenues and patent expirations for selected companies’

blockbusters, 2006
Drug Company Est. company Est. total US patent

revenues ($) revenues (%) expiration
Singulair Merck 3,492 15.8% 2012

Zocor Merck 3,232 14.6% Expired
Fosamax Merck 3,127 14.1% 2007
Cozaar and Hyzaar Merck 3,064 13.9% 2010
Plavix Bristol-Myers Squibb 3,681 20.2% 2011
Pravachol Bristol-Myers Squibb 1,401 7.7% Expired
Abilify Bristol-Myers Squibb 1,227 6.7% 2014
Avapro Bristol-Myers Squibb 1,053 5.8% 2011
Zyprexa Lilly 4,276 28.0% 2011
Gemzar Lilly 1,383 9.1% 2010
Evista Lilly 1,033 6.8% 2012
Lipitor Pfizer 12,735 26.7% 2011
Norvasc Pfizer 4,732 9.9% Expired
Zoloft Pfizer 2,592 5.4% Expired
Celebrex Pfizer 1,999 4.2% 2013
Viagra Pfizer 1,609 3.4% 2012
Zyrtec Pfizer 1,593 3.3% 2007
Xalatan Pfizer 1,416 3.0% 2011
Zithromax Pfizer 705 1.5% Expired
Aranesp Amgen 4,020 29.8% n/a
Neulasta Amgen 3,865 28.6% Expired
Enbrel Amgen 2,783 20.6% 2009
Epogen Amgen 2,467 18.3% 2012
Est. = Estimated
Source: Company filings Business Insights Ltd
39
However, strong blockbuster revenue growth will not continue. Over the past several
years, growth has been slowing, and between 2001 and 2008, the blockbuster market is
expected to increase with a CAGR of just 4.3%, as patents on the products continue to
expire. With a lack of innovative new drugs emerging from pipelines to replace the loss
in revenue that mass patent expiry represents, companies will become increasingly
reliant on patent protection and lifecycle management strategies such as indication
expansion for at least their short to medium term growth. Companies that lack
replacement products with the potential to reach blockbuster status will also have to
consider extensive in-licensing alliances and/or acquisitions to boost the revenue
potential of their portfolios.
Patent challenges
In order to introduce a generic version of a drug before its patent expiration, generics
manufacturers are increasingly challenging the validity of patents. If successful, this
not only allows them early access to the market, but also provides them with an
exclusivity period during which they may build share in the absence of competition
from other generics makers. It should be noted, however, that even during this
exclusivity period, the branded drug manufacturer may introduce its own generic
version of the product, or it may license its right to do so to another generics
manufacturer. Because of their high cost, patent challenges are generally undertaken on
only the largest drugs.
Case study: Lipitor
Ongoing challenges involving Pfizer’s blockbuster cholesterol reducer, Lipitor

(atorvastatin), demonstrate the importance of patent protection. Lipitor is presently the
world’s single highest selling drug with 2006 sales of more than $12bn. It is key for
Pfizer, accounting for over 20% of the company’s global revenue and 25% to 30% of
its profit. Lipitor was acquired through Pfizer’s $114bn acquisition of Warner-Lambert
in 2000.
40
For the past several years, Indian generics maker Ranbaxy has brought patent
challenges against Lipitor in markets around the world, attempting to invalidate
Lipitor’s patents so that it could introduce a competing product sooner. Ranbaxy’s
strategy has generally been to assert that one of the two Lipitor patents did not cover
the exact molecular form of atorvastatin that Pfizer sells as Lipitor. The company
further alleged that the second patent, which does cover the exact molecular form,
should be invalidated because it does not represent a meaningful advance on the first
patent.
In October 2005, a British High Court rendered a mixed verdict, upholding one of
Pfizer’s patents on Lipitor but invalidating a second one. The ruling had no practical
effect on Pfizer's control over Lipitor in the UK, because the court simultaneously
upheld a patent that covers the main active ingredient in the drug which does not expire
until November 2011 and Pfizer’s exclusive right to sell Lipitor in Britain will remain
intact until November 2011. The patent that the court invalidated was to expire in July
2010.
Similar rulings in other countries have been mixed. A September 2006 ruling in the
Netherlands and an October 2006 ruling in Austria both upheld the validity of the
Lipitor patents; a December 2006 ruling in Australia, while invalidating one patent,
upheld Pfizer’s basic patent and preserved Lipitor’s original patent coverage in
Australia. Although a US court upheld the validity of both key Lipitor patents in
December 2005, an August 2006 decision on appeal followed the British precedent and
invalided the second patent, which was to expire in June 2011, reducing the drug’s US
exclusivity by 15 months. Pfizer now has US patent protection on the drug until March
of 2010. This is by far the most significant single-country ruling on Lipitor’s patents, as
the US accounts for about 60% of Lipitor sales.
41
Limitations of indication expansion
In both the US and the EU the most significant limitation of an indication expansion is
the ability of generic manufacturers to introduce a drug, albeit by excluding the new
indication from their label. Even with this constraint, however, the generic may be
prescribed off-label for price-conscious patients, particularly in the US as health care
providers continue to shift more cost burden to program participants. This can
significantly undermine the success of the strategy for products losing patent
protection. In the EU, planned SmPC harmonization and a provision of new EU
legislation to exclude patented indications from abridged MAs for generic indications
will also reduce effectiveness of this strategy as a delaying tactic in the generic
approval process.
This overhaul of European pharmaceutical legislation, which was finalized at a

European level in 2004, removed many of the barriers to generic penetration in Europe,
and with it, many of the strategies that have historically been used by branded
companies to delay or prevent generic competition. These include the introduction of a
European reference product, removing the potential for companies to prevent generic
competition by withdrawing a product from the market prior to patent expiry. In
France, this removed the additional 10 years of data exclusivity for each new
indication, dose, pharmaceutical form, etc. approved. Also, there is some uncertainty
about what constitutes “a significant new indication” in order to qualify for an
additional year data protection.
Changes have also occurred in the US, particularly in the Medicare Modernization Act
(MMA) of 2003, to limit the usefulness of an indication expansion strategy. Innovator
companies are still awarded three years of data exclusivity for a change to a product’s
label that requires clinical trials to be conducted, but in the case of indication
extensions though, generics companies can frequently get around this exclusivity by
excluding the additional indication from their application. Because of the high levels of
off-label prescribing in the US, the generic product is often used for the new indication
even though its label does not reflect the new usage. Although innovator companies
42
had historically listed patents covering the new indication in the Orange Book, thereby
forcing generics manufacturers to make a paragraph IV certification in its ANDA, and
generating an automatic 30-month stay of approval, the MMA of 2003 removed the
potential to generate multiple 30-month stays.
Furthermore, in both the US and Europe, indication expansion is limited by the

characteristics of the product and market it addresses. As with other lifecycle
management strategies, products that are uncompetitive or cause significant side effects
are unlikely to benefit from an indication expansion, although low sales, small market,
lack of brand equity, budgetary constraints and lack of technological know-how may
have less impact. These may be remedied, for example, if the new indication addresses
a large market. Furthermore, conducting the testing required to gain approval for a new
indication is often considerably less expensive and time-consuming than conducting
the research required to develop a next-generation product or even a new formulation.
In the US, innovator companies are awarded three years of data exclusivity for a
change to a product’s label that requires clinical trials to be conducted, although
changes to the Medicare Modernization Act of 2003 have limited the opportunity to
generate multiple 30-month stays. Originator companies had historically relied upon
listing patents covering new indications in the Orange Book, thereby forcing generics
manufacturers to make a paragraph IV certification in its ANDA, and generating an
automatic 30-month stay of approval.
In Europe, manufacturers have long taken advantage of the requirement for generics
companies to use the Mutual Recognition Procedure (MRP) process but also have the
same Summary of Product Characteristics (SmPC) as the listed drug in each market, to
extend patent protection by filing different indications in different markets. This results
in SmPCs for the listed drug differing between regions and makes it impossible for a
generic to gain approval for the full range of indications in each market via the MRP. A
related action that can delay generic competition, even if SmPCs are harmonized across
markets, is the filing of patents for new indications, which may expire at different times
in different countries. Thus the generic company would be prevented from marketing
43
the product for a particular indication. This can prevent launch of the product even for
patent expired indications. The mention of a patented indication in the generics
company’s marketing authorization (MA) amounts to patent infringement, but
excluding the patented indication can result in difficulties in gaining approval since the
generic SmPC would differ from that of the originator product.
It should also be noted that the success of an indication expansion strategy is heavily
dependent upon the level of generic competition. Drugs that are subject to intense
competition from generics may be unable to build share for a new indication, while
those with less competition may be more successful in this regard.
Trends in indication expansion
As the global pharmaceutical industry faces increasing pressure from ongoing

expirations of blockbusters, rising generic competition, ever-increasing drug
development costs and shareholder imperatives to create value, expansion of current
products’ indications is becoming an important strategy to maximize the value of
companies’ drug portfolios. This has resulted in a growing number of companies
actively pursuing indication expansion for an increased proportion of their products.
Drug developers are also attempting a greater number of indication expansions for each
product.
Along with this overall ramp up in indication expansion activity, drug makers are also
broadening their focus to more complicated types of indication expansions. While in
the past, indication expansions focused on a smaller number of related indications
and/or expansions that would result in extended exclusivity periods, shrinking pipelines
and a rising number of patent expirations on blockbuster products has resulted in a
broader view of indication expansion to encompass more complicated strategies such
as the addition of entirely new therapeutic indications and expansion of the drug’s
usage conditions. While the clinical testing required to obtain these extensions can be
more costly and time consuming than expansion to related indications, many
44
manufacturers are finding that the additional revenues to be gained from incrementally
adding indications offset this expense in the heightened competitive environment.
Indication Removal
Although it is considerably less common than indication expansion, occasionally,

manufacturers will remove an indication from a product. This occurred in February
2007 when Sanofi-Aventis revised the labeling on its Ketek antibiotic to remove
indications for acute exacerbation of chronic bronchitis (AECB) and acute bacterial
sinusitis (ABS), leaving just one indication (treatment of community acquired
pneumonia). The company made this change in response to safety data linking Ketek
with liver damage, noting that other products which do not carry this risk are available
for the treatment of AECB and ABS. With an increasing regulatory focus on drug
safety and costs related to consumer lawsuits posing an ever greater financial threat, it
is not unlikely that other manufacturers may similarly remove selected indications from
their products if those medications are linked to significant adverse reactions.
Conclusion
Indication expansion is a commonly-used lifecycle management strategy that may be

employed to expand target markets and/or delay the onset of generic competition. It
offers relatively high returns, although risk of failure is also relatively high, as are the
cost of implementation and time involved. Because of this, it is often undertaken early
in the product’s lifecycle – typically in Phase III testing, before the product is
introduced to market. For example, many manufacturers routinely seek to extend the
usage of their drugs to children and adolescents to gain an additional exclusivity period
While new pharmaceutical regulations in both Europe and the US have limited these
extensions somewhat, manufacturers may still receive additional periods of data
protection, which can be extremely valuable for top-selling products.
45
The most significant limitation to the strategy is the ability of generic manufacturers to
introduce products excluding any new indications in their labeling. This is a particular
problem in the US, where off-label prescribing is common and consumers are likely to
use generics for new indications approved only for the original branded drug.
46
CHAPTER 2
Extension to related
indications
47
Chapter 2 Extension to related
indications
Summary
The objective of an indication extension is to increase a drug’s revenues by

adding additional uses that are closely related to the drug’s original indication;
most drugs with extended indications experience market-beating revenue growth.
Indication extensions include extension of a product from treatment to prevention

or vice versa; expansion of a product to more or less severe forms of a disease;
and inclusion of closely-related variants of a condition.
Declining sales as a result of competition or other factors is a key driver of

indication extension.
Many drugs are extended into multiple similar indications but some may be
extended into a smaller number of larger indications; the latter approach tends to
offer greater returns for a similar level of investment.
Factors that make an indication extension attractive in one region are often
present in others so drug makers typically pursue similar indication extensions in
the US, Canada and Europe.
A manufacturer may receive an extension of the drug’s market exclusivity;

however, this benefit is not as significant as it is for other indication expansion
strategies such as an expansion into an entirely new therapeutic area.
Indication extension is not always associated with extended exclusivity periods.

Furthermore, recent regulatory changes have limited exclusivity extensions in
some regions.
As patent expirations for blockbuster drugs loom and generic competition

heightens, indication extension will become an increasingly important strategy to
maximize drug revenues.
48
Introduction
Indication extension, or the expansion of a drug’s usage to indications closely related to

the indication for which it was originally approved, is one of the most common forms
of indication expansion. This is because application to closely related indications is
often relatively straightforward to identify and demonstrate. Such extensions include:
Extension of a product from treatment to prevention or vice versa;
Expansion of a product to more or less severe forms of a disease;
Inclusion of closely-related variants of a condition.
As shown in Table 2.3, this latter occurrence is the most common, since many products
are first approved for very narrow indications and therefore their usage may often be
expanded to address closely-related variants.
Treatment-prevention extensions
For medications that address chronic conditions in which sufferers may experience
recurring bouts of symptoms, manufacturers often seek to extend the indication of
medicines beyond treatment of acute flares to prevention of relapse. This provides
benefits for both the patient and the drug maker, since patients may be spared the
discomfort of experiencing then treating and re-treating symptoms, while
manufacturers gain expanded sales from continuous usage of the drug.
Extensions to disease prevention may also be used for products that address potentially
wide spread, but not chronic conditions, such as influenza. A virally-transmitted
disease, influenza can affect anyone and is particularly dangerous in those with
49
compromised immune systems such as the elderly. In March 2006, GlaxoSmithKline
obtained FDA approval to market Relenza, which was initially approved in 1999 to
treat infection by the influenza virus, for the prevention of flu. While not recommended
as a substitute for flu vaccine, the medication is nonetheless benefiting from heightened
awareness of flu prevention and rising consumer demand for prevention therapies, as
various authorities including the Canadian, UK and German governments have begun
stockpiling the drug. In response, GlaxoSmithKline significantly increased its
inventory of Relenza in 2005 many times higher than its original forecast levels.
Relenza sales are estimated at roughly $25m in 2005 and approximately $130m in
2006.
Similarly, Merck’s Invanz was approved in October 2006 for the prevention of surgical
site infections, marking the antibiotic’s first approval for prophylaxis rather than
treatment. Invanz was originally approved in November 2001 as a once-daily injectable
to treat certain complicated skin and skin structure infections. Merck continued to
broaden Invanz’s indications by adding treatment of related applications and in 2006
sought approval for a prevention indication.
Disease severity extensions
When a disease manifests in varying levels of severity and current medications have
demonstrated efficacy at only certain of these levels, manufacturers may seek to extend
the drug’s usage by broadening the severity range within which a drug may be used.
This typically involves showing that a drug which has been proven effective at lower
levels of disease severity can also provide benefit at higher levels; but it can also mean
showing that the drug that addresses a severe form of the disease is also useful for
milder forms of the condition. While such extensions would initially appear to be
straightforward, clinical practice has shown otherwise, as shown by the following case
study of Aracept describing the attempts to extend the severity range within which the
product may be used.
50
Table 2.3: Selected indication extensions for US commercialized drugs
Company Drug Original Indication Expanded Indication Type Date of

Clearance
Merck Ivanz Infections Prophylaxis of surgical site infection P Dec 2006

(SSI) following elective colorectal
surgery
Abbott Humira Rheumatoid arthritis Inhibiting structural joint damage & V Nov 2006
improving physical function in
patients with PsA
Pfizer Aricept Mild to moderate Severe Alzheimer’s disease S Oct 2006
Alzheimer’s disease
GSK Lamictal Epilepsy Primary Generalized Tonic- Clonic V Sep 2006
(grand mal) seizures
BMS Plavix Reduction of athero- Reduce death rates from any cause V Aug 2006
sclerotic events in and the rate of combined
atherosclerosis re-infarction, stroke or death in
patients with acute ST-segment
elevation myocardial infarction
Abbott Humira Rheumatoid arthritis Ankylosing spondylitis V Jul 2006
Merck Emend Prevention of nausea Use with other antiemetic medicines V Jul 2006
& vomiting after for the prevention of nausea &
surgery vomiting after chemotherapy
GSK Relenza Treatment of influenza Prevention of influenza P Mar 2006
Merck Singulair Asthma Exercise-induced bronchospasm V Dec 2005
Wyeth Effexor Depression Panic disorder V Nov 2005
Schering- Avelox Infections Intra-abdominal infections V Nov 2005
Plough
OSI/ Tarceva Non-small cell lung Pancreatic cancer V Nov 2005
Genentech cancer
Abbott Humira Rheumatoid arthritis Psoriatic arthritis (PsA) V Oct 2005
J&J Levaquin Infections Bacterial sinusitis V Aug 2005
Pfizer Celebrex Osteoarthritis pain Ankylosing spondylitis V Jul 2005
Merck Hyzaar Hypertension Reduction in risk of stroke in V Apr 2005
patients with hypertension and left
ventricular hypertrophy
J&J Remicade Rheumatoid arthritis Active ankylosing spondylitis V Dec 2004
Roche Xenical Obesity Delay onset of type 2 diabetes in V Oct 2004
obese pre-diabetic patients
Merck Cancidas Invasive aspergillosis Fungal infections in febrile V Oct 2004
in patients unable to neutropenic patients
use other antifungals
P = Prevention of condition; S= Severity variant; V= Disease variant.

J&J = Johnson & Johnson; GSK = GlaxoSmithKline;
51
Case study: Aricept
Although all of the manufacturers of Alzheimer’s disease (AD) drugs have been
pursuing extended indications for their products, so far only one has received FDA
approval to market for the full range (mild, moderate, severe) of the disease. In October
2006, Pfizer and its development partner Eisai announced that the FDA had approved
Aricept for the treatment of severe AD; the drug was originally cleared in 1996 for the
treatment of mild to moderate AD. The new approval was based on results of a pivotal
six-month, multi-center, randomized, double-blind, placebo-controlled clinical trial
involving 248 Swedish nursing home patients with severe AD, and allows Aricept to be
used as a single continuous treatment for AD patients. Previously, AD patients with
mild to moderate levels of the disease would begin therapy with Aricept then move to
Forest Laboratories’ Namenda, which had been the only drug approved for the
treatment of severe AD.
This is an important extension, since patients with moderate to severe AD constitute

about 30% of the entire global AD patient population of more than 10 million people
and due to the debilitating nature of the disease, both AD sufferers and their caregivers
are extremely motivated to utilize medications that will inhibit its progression.
Although Aricept was the number one prescribed AD therapy worldwide prior to the
approval, the extended indication is expected to further boost the drug’s sales from
about $350m in 2006 to more than $500m in 2007.
However, demonstrating the ability of an AD drug to address the full spectrum of the
disease has proven difficult for other manufacturers. Merz, the original developer of
Namenda, and its US distribution partner, Forest Laboratories, continue to seek
approval to utilize Namenda for patients with mild to moderate AD. Forest had
submitted an application seeking FDA approval for this extension, but in July 2005,
received a non-approvable letter from the FDA which was subsequently confirmed in
May 2006. This occurred because, despite measurable improvements in cognitive
(ADAS-cog) and global function (CIBIC-Plus) of patients with mild to moderate AD in
a US clinical trial, statistical significance was not reached at the study’s end point.
52
Forest continues to investigate opportunities to extend the drug’s usage. Merz,
however, appears to be exploring European usage of Namenda for related conditions,
having published results of preliminary studies in 2005 showing that the drug may help
mitigate behavioral symptoms associated with AD as well as vascular dementia. After
Alzheimer’s disease, vascular dementia is the most common form of dementia in the
world. Interestingly, Aricept is approved for treatment of vascular dementia in India
and South Korea, but approvals in Europe and the US are being delayed by allegations
that a relatively high number of patients in a vascular dementia clinical trial died while
taking the drug.
Because of such difficulties in demonstrating efficacy between different severity levels

of AD, other AD drug makers are also focusing on other types of indication extensions.
In March 2006, Novartis announced that its Exelon, which is approved for the
treatment of mild to moderate AD in several dozen countries, was granted marketing
authorization by the European Commission for the symptomatic treatment of mild to
moderate dementia in patients with idiopathic Parkinson's disease in all 25 European
member states. In February 2007, the FDA issued a similar approval.
Extensions to disease variants
Because of the high similarity between variations of a disease, many drug makers focus
on extending usage within a family of related conditions. Diseases with a very large
number of variants, such as arthritis, cardiovascular disease and cancer, lend
themselves particularly well to such extensions. For example, Abbott originally
obtained approval for Humira in December 2002 for the treatment of rheumatoid
arthritis, a chronic, inflammatory autoimmune disorder that causes the immune system
to attack the joints. In October 2005, Humira was approved in the US for treatment of
psoriatic arthritis, a type of inflammatory arthritis that affects around 20% of people
suffering from psoriasis and in July 2006, it was approved for treatment of ankylosing
spondylitis, a type of arthritis that primarily affects the spine.
53
Disease variants can often be even more closely linked – particularly when the drug
was originally approved for a relatively narrow indication. For example, in April 2005,
Merck’s Hyzaar was approved by the FDA to reduce the risk of stroke in patients with
hypertension and left ventricular hypertrophy (LVH). Since the drug’s initial approval
in April 1995 for treatment of hypertension under certain conditions, Merck has
continued to expand the drug’s approvals including usage to address severe
hypertension in appropriate patients.
Variants may fall within the same disease family, such as hepatitis. Serotypes of the
disease, which cause inflammation of the liver, include hepatitis A through G, with
hepatitis B and C being the most common. Although drugs that are effective against
one strain of hepatitis are not necessarily effective against others, developers continue
to investigate extension of products. In May 2005, Roche received FDA approval to
market its Pegasys injection for treatment of chronic hepatitis B; the drug was first
approved in October 2002 for treatment with chronic hepatitis C. The B and C
serotypes each affect approximately 250 million people worldwide.
Other conditions may be linked to fewer variants and a drug may be initially approved
for relatively broad usage, but due to the similarity between the disease and related
disorders, an indication extension may be appropriate. This is particularly true for
conditions that affect very large patient populations. Unlike other diseases whose
physiology is well understood, depression represents a functional condition which is
diagnosed largely on the basis of a patient’s impressions and behaviors rather than
through clinical measurement of physical parameters. Because of this, drugs that help
alleviate depression carry relatively broad indications and variants of the condition are
relatively few. However, due to rising consumer awareness of medications for
depression, as well as imminently expiring patents, drug developers are increasingly
investigating additional indications for leading depression medications. In November
2005, for example, Wyeth obtained FDA approval to market its Effexor for the
treatment of panic disorder. Effexor was first approved in October 1997 for treatment
of depression, and was subsequently approved in February 2003 for the treatment of
social anxiety disorder. Depression is believed to affect about 6% of the population;
54
social anxiety disorder affects up to 13% of people at some point in their lives; and
panic disorder is believed to affect about 1% of adults annually. The large size of this
patient population, combined with these key indication extensions, have resulted in
global sales of Effexor exceeding $3.5 billion in 2006. Figure 2.3 shows disease and/or
market characteristics that lend themselves well to the introduction of indication
extensions for disease variants.
Figure 2.3: Disease characteristics supporting indication extension for disease

variants
Number of Variants Low High
Indication Scope Narrow Broad
Similarity Between Low High

Indication
Market Size Small Large
Competition Low High
Optimal Conditions for Indication Extension to

Additional Disease Variants
55
Case study: Hycamtin
The dozens of different varieties of cancer, combined with their relatively similar
etiology, make the disease an excellent area in which to extend the indications of
efficacious medicines. Typical of anti-cancer drugs, usage of GlaxoSmithKline’s
Hycamtin continues to be expanded to related oncology indications. In June 2006,
GlaxoSmithKline announced that the FDA approved Hycamtin in combination with
cisplatin, for the treatment of stage IV-B, recurrent, or persistent carcinoma of the
cervix, which is not amenable to curative treatment with surgery and/or radiation
therapy. Following a six-month priority review, the expanded indication is based on
Phase III results that demonstrated a significant survival advantage by using Hycamtin
in combination with cisplatin compared to cisplatin alone. In December 2006, the
European Medicines Agency (EMEA) granted Marketing Authorisation for Hycamtin
in combination with cisplatin for similar use.
These were important approvals, since cervical cancer is widely viewed as incurable,
with several dozen drug regimens having been tested against the disease and Hycamtin
in combination with cisplatin now representing the only approved therapy. Each year,
cervical cancer is diagnosed in 500,000 women worldwide and an estimated 270,000
women die from the disease. Because of the scarcity of other treatment options for
cervical cancer, Hycamtin sales are expected to grow strongly. From 2000 to 2005, the
drug’s global sales have remained relatively flat at about $175 - $190m per year. In
2006, however, with less than half a year’s marketing approval in the new indication,
global sales of Hycamtin are projected to exceed $250m.
Hycamtin was originally approved in the mid 1990s for the treatment of metastatic
carcinoma of the ovary after failure of initial or subsequent therapy. It was later
approved for the treatment of small cell lung cancer disease for those whom re-
treatment with the first-line chemotherapy is not considered appropriate.
GlaxoSmithKline has also investigated Hycamtin as a treatment for myelodysplastic
syndrome and as second line therapy for colorectal cancer but has not filed to market
56
for these indications, presumably because the drug has not demonstrated adequate
efficacy in these areas.
This latter indication for colorectal cancer could have been extremely beneficial, as
treatment of colorectal cancer has boosted global sales of Pfizer’s Camptosar to more
than $1bn in 2006. While the drug was initially approved in 1996 for treatment of
patients with metastatic carcinoma of the colon or rectum whose disease had recurred
or progressed following 5-fluorouracil (5-FU) based therapy, an indication extension in
April 2000 allowed Camptosar to be used as first-line therapy in combination with 5-
FU to treat metastatic colorectal cancer. Along with Hycamtin, Camptosar is one of
two key topoisomerase inhibitors used in the treatment of cancer.
When an indication extension is appropriate
Assuming that efficacy can be demonstrated in the new indication, an indication

extension can be appropriate for a variety of products including those that:
Were initially approved for relatively narrow applications;
Address a condition with a range of severity levels or a broad number of variants;
May be used to prevent the onset of a disease or its symptoms;
Are facing declining sales as a result of competition or other factors.
As with business development decisions for entirely new drug entities, the decision as
to whether or not to invest the required resources in clinical development largely turns
on market characteristics. This includes factors such as the sizes of patient populations,
competing products, pricing issues (if any), regulatory hurdles, etc. However, while
new molecules may be required to offer much higher potential returns on investment as
a means to offset much higher development costs, products based upon an indication
extension may be held to a lower standard since their costs of commercialization are
57
much lower. These costs will vary for each company with a wide variety of factors
including the availability of data supporting the proposed new indication for the drug,
data requirements to support efficacy in the new indication, the R&D group’s expertise
and available resources.
Many times, the factors that make pursuit of an indication extension attractive in one
region are also present in others. Because of this, it is common for manufacturers to
pursue similar indication extensions in the US, Canada and Europe. For example, in
August 2006, Bristol-Myers Squibb and Sanofi-Aventis received approval from both
the FDA and the EMEA for an additional indication for Plavix to reduce the rate of
death from any cause and the rate of a combined endpoint of re-infarction, stroke or
death in patients with acute ST-segment elevation myocardial infarction (STEMI).
About 300,000 Americans and another 325,000 Europeans suffer STEMI events each
year, and survivors are at high risk of suffering another atherothrombotic event. The
approvals allow Plavix to market for risk reduction of atherothrombotic events across
the entire spectrum of acute coronary syndrome, which affects more than 2.8 million
people in the US and Europe combined.
Objectives of indication extension
The main objective of indication extension is to increase the revenues of a drug by

broadening its usage. This may involve adding multiple smaller indications, which is a
common strategy for products that address conditions with many variants, or it may
involve extending the drug’s usage with a smaller number of larger indications. The
former approach tends to be utilized more often, since many conditions may be
somewhat narrowly indicated. However, the latter approach, when appropriate, offers
greater returns for a similar level of investment.
For example, in October 2006, Novartis announced positive results of a clinical trial
investigating its Zelnorm for dysmotility-type dyspepsia, a gastrointestinal disorder
closely related to the condition for which Zelnorm was first approved, irritable bowel
58
syndrome with constipation (IBS-C). Although Zelnorm has recorded strong growth
since its original FDA clearance in July 2002, with 2006 sales exceeding $500m, the
ability to address dysmotility-type dyspepsia could significantly enhance drug revenues
since about 25% of the US population suffers from the condition and no currently
approved medications are available to treat it or its associated symptoms, which can be
chronic and disruptive. Novartis has also obtained approval to market Zelnorm for
chronic idiopathic constipation in 20 countries including the US. Chronic idiopathic
constipation, or constipation lasting 6 months or more, affects an estimated 5 million
Americans.
Benefits of indication extension
The primary benefit of indication extension is to cost effectively increase the revenue
for a drug by increasing its uses. Patients and physicians also benefit when
manufacturers confirm or disprove the safe and effective usage of medicines that are
being used off-label. (According to the Association of Community Cancer Centers, for
example, 50% to 60% of all cancer drugs are used off-label in the US for related
indications due to the dearth of clinical testing conducted for certain smaller
indications).
To a secondary extent, the manufacturer may also receive an extension of the drug’s
market exclusivity. However, this benefit is not as significant as it is for other
indication expansion strategies such as an expansion into an entirely new therapeutic
area.
In the U.S, innovator companies are awarded three years of data exclusivity for an
indication expansion that requires clinical trials to be conducted. This means that
generics manufacturers could not claim a similar indication within that period. In
Europe, additional exclusivity periods are typically reserved for “significant new
indications” and since indication extensions more often represent smaller add-on
applications, protection of exclusivity often does not arise.
59
Nonetheless, the potential gains from the addition of multiple indication extensions can
be significant. For example, Merck reported that 2005 sales of its Cancidas reached
$570m, attributing much of the 33% gain over the prior year to the drug’s October
2004 approval for presumed fungal infections in febrile neutropenic patients. Table 2.4
shows revenues for selected drugs in the year before an important new indication
extension and revenues in the year following. Because many drugs experience multiple
indication extensions and/or other types of indication expansions, it can be difficult to
assess the overall impact of particular extensions on the drug’s revenues; therefore,
Table 2.4 focuses on a selected group of drugs with more limited indication
expansions. In most cases, revenue growth for drugs with extended indications
outpaces that of the drug’s manufacturer overall in the year immediately following
approval of the new indication. Where it does not, the drug’s growth often outpaces
that of its market. For example, Roche’s overall sales expanded by 20% in 2005 on
gains in the company’s oncology medications. While the market for weight loss drugs
was flat, Roche’s Xenical nonetheless expanded by 5% on an expansion of the
product’s labeling to include obese adolescents.
Table 2.4: Impact on global revenues of indication extensions of selected

drugs
Company Drug Date of Revenues in Revenues in Drug sales Company

extension extension year year after growth sales growth
($M) ($M)
GlaxoSmithKline Relenza Mar-06 25 130 420% 7.0%

Merck Singulair Dec-05 2,975 3,492 17% 2.1%
Schering-Plough Avelox Nov-05 228 287 26.0% 11.0%
Abbott Humira Oct-05 1,400 1,600 14% -0.2%
Roche Xenical Oct-04 518 544 5.0% 20.0%
Merck Cancidas Oct-04 428 570 33.0% -4.0%
Because of this financial benefit, drug developers continue to pursue indication

extensions for leading products. Key announced initiatives are shown Table 2.5.
Consistent with approved indication extensions, most indication extension initiatives
60
focus on disease variants with fewer focusing on severity variants or disease
prevention. One exception is research funded by Schering-Plough to examine the
effects of its antifungal, Noxafil, in immuno-compromised patients. According to a
January 2007 report published in the New England Journal of Medicine, scientists at
the University of Cologne in Germany found that Noxafil reduced the risk of fungal
infection in cancer patients receiving chemotherapy to just 2%, compared with 8% for
those receiving either of two medications commonly used to prevent infection,
fluconazole or itraconazole. Because of a higher risk of adverse reactions in the Noxafil
study arm, however, it is unclear whether Schering-Plough will seek approval for
Noxafil in this indication.
Often, manufacturers with similar types of products pursue similar indication

expansion initiatives. For example, several developers of cardiovascular medications
have recently obtained approval to extend usage of their products to treatment of acute
ST-segment elevation myocardial infarction (STEMI). In August 2006, Bristol-Myers
Squibb obtained an expansion to this indication for Plavix and in February 2007,
GlaxoSmithKline announced FDA approval for treatment of STEMI for Arixtra. Other
manufacturers, including Sanofi-Aventis, are seeking similar indication extensions for
their cardiovascular medications.
61
Table 2.5: Selected indication extension initiatives for US commercialized
drugs, 2007
Company Drug Original Indication Expanded Indication/s Type
Abbott Humira Rheumatoid arthritis Several autoimmune, arthritis- V

related diseases
Daiichi Sankyo Welchol Cholesterol reduction Improving glycemic control V
Fresenius PhosLo Control of elevated phosphor- Treatment of Stage 4 chronic V
ous levels in patients with end kidney disease
stage renal disease (ESRD)
GlaxoSmith- Advair Maintenance treatment of air- Chronic obstructive V
Kline Diskus flow obstruction of with COPD pulmonary disease (COPD)
with chronic bronchitis
Merck Singulair Asthma Acute asthma, respiratory V
syncytial bronchiolitis
Pfizer Camptosar Colorectal cancer Gastric cancer V
Pfizer Geodon Schizophrenia and acute manic Bipolar relapse prevention P
or mixed episodes
Pfizer Lipitor High cholesterol Sec. prevention of cardio- V
vascular events in patients with
coronary artery disease
Pfizer Macugen Neovascular (wet) age-related Diabetic macular edema V
macular degeneration (AMD).
Pfizer Zyvox Bacterial infections Catheter-related infections, bone V
and joint infections
Sanofi-Aventis Lovenox Prophylaxis and treatment of Treatment of patients with acute V
thromboembolic disease ST-segment elevation myocardial
infarction (STEMI)
Schering-Plough Noxafil Tx of fungal infections Prevention of fungal infections P
P = Prevention of condition; S= Severity variant; V= Disease variant.
Limitations of indication extension
The most significant limitation of indication extension relates to market exclusivity.

Unlike other indication expansion strategies, such as pediatric extensions, that can
automatically extend a drug’s market exclusivity and thereby help a manufacturer
defend against generic competition, indication extension is not always associated with
extended exclusivity periods. Furthermore, recent regulatory changes have limited
exclusivity extensions in some regions.
62
In the US, innovator companies receive three years of data exclusivity for a change to a
product’s label that requires clinical trials to be conducted, but changes to the Medicare
Modernization Act of 2003 have limited the opportunity to generate multiple 30-month
stays. In the past, originator companies listed patents covering new indications in the
Orange Book, thereby forcing generics manufacturers to make a paragraph IV
certification in its ANDA, and generating an automatic 30-month stay of approval. This
means that generics products, if they are available, may be used off label for the new
indication. The situation is even worse in Europe, where new pharmaceutical
legislation allows innovator companies to benefit from an additional one year of market
exclusivity (for the whole product) during the product’s first eight years on the market,
but only when receiving approval for a “significant new indication”. Because many
indication extensions are not considered “significant”, many products do not qualify for
this benefit.
Aside from these exclusivity limitations, the characteristics of the product itself and
market it addresses pose the greatest limitation to indication extension strategies. As
with other indication expansion strategies, products that are uncompetitive or cause
significant side effects are unlikely to benefit from an indication extension. If the
market for the new indication is dominated by a highly successful and efficacious
product which offers greater benefit than the new drug could, for example, the new
drug is unlikely to be successful in its new indication unless its manufacturer can
develop a means to position it more competitively. This may include pricing,
promotional or other tactics.
Competition from generic products could pose a significant threat to the drug’s success
in a new indication. Generic products that are widely used in the drug’s original
application could also be used for the new indication; generic medications approved for
the extended indication would pose an even greater threat, as they would directly
compete with the drug in its new indication.
63
Conclusion
Indication extension is a highly effective means to expand a drug’s usage to related

conditions. Because of the relatively low cost to obtain additional regulatory approvals
for a product already on the market, particularly for indications closely related to the
drug’s original approval, many drug makers are actively pursuing indication extension
strategies and in many cases are investigating several related indications for selected
products. Over the next several years, as patent expirations for blockbuster drugs loom
and generic competition heightens, it is likely that indication extension will become an
increasingly important strategy for drug makers to maximize revenues from each
product.
64
CHAPTER 3
Extension to new applications
65
Chapter 3 Extension to new
applications
Summary
New application extensions are therapeutically distinct from a drug’s original

indications.
Compared with other types of indication expansions, new application extensions

occur less frequently due to their relatively high cost and lack of data on how the
drug will affect other conditions.
Certain drug families, like anti-depressants, have been found to address a wide
range of loosely related conditions, and because of this, are now being closely
studied by their developers for appropriate new application extensions.
The benefits of a new application extension are twofold: to cost effectively

increase the revenue for a drug by increasing its uses, and to obtain an extension
of the drug’s market exclusivity.
In 2006, the pharmaceutical industry embraced a systematic new means to

develop new application extensions for previously researched products called
“repositioning” in which an entire library of failed experimental compounds is
methodically analyzed to identify new therapeutic applications.
With the introduction of new repositioning services, new application extensions

are likely to become an even more important indication expansion strategy over
the next several years.
Because of the significant financial benefits that many manufacturers have been
able to realize from such new application expansions, drug developers continue to
pursue new application extensions for leading products.
Limitations of new application extensions are related to the market for the new
indication; products that are uncompetitive are unlikely to benefit from a new
application extension.
66
Introduction
The extension of a drug’s indications into entirely new applications represents a

significant opportunity to expand the drug’s usage. Unlike indication extensions as
discussed in Chapter 2, in which new indications are closely related to the drug’s
original approved uses, these new applications are therapeutically distinct from the
original indications.
In some cases, however, the conditions may be similar and a judgment must be made as
to whether they are closely related enough to be categorized as an indication extension
or as an entirely new application. For example, two manufacturers of Parkinson’s
disease drugs, Boehringer Ingelheim and GlaxoSmithKline, recently received FDA
approval to market their products, Mirapex and Requip, respectively, for restless legs
syndrome (RLS). Both conditions are considered neurologically-based movement
disorders, although Parkinson’s is considerably more degenerative and causes a much
wider and more severe range of symptoms. In this report, indication expansions that
build upon prior clearances for new applications will themselves be considered new
applications and not extensions to related indications. Table 3.6 shows selected new
application extensions in the US.
Compared with other types of indication expansions such as indication extensions, new
application extensions occur less frequently. This is due to a variety of inter-related
causes including:
Higher cost to investigate the drug’s applicability to entirely new therapeutic areas;
Lack of data on how the drug will affect other conditions;
Lower barriers to entry for other types of indication expansions.
67
Table 3.6: Selected new application extensions for US commercialized drugs
Company Drug Original Indication Expanded Indication Date of

Clearance
Berlex Yaz Contraception Treatment of acne vulgaris Jan 2007

Boehringer Mirapex Parkinson’s disease Restless Legs Syndrome Nov 2006
Ingelheim
Berlex Yaz Contraception Premenstrual dysphoric Oct 2006
disorder
J&J Risperdal Depression Irritability associated with Oct 2006
autistic disorder
J&J Remicade Rheumatoid arthritis Plaque Psoriasis Sep 2006
Celgene Thalimid Skin conditions associated Multiple myeloma May 2006
with leprosy
Abbott Depakote ER Epilepsy Mania associated with Dec 2005
bipolar disorder
Pfizer Lipitor Cholesterol reduction Reduce the risk of stroke & Sep 2005
myocardial infarction in
type 2 diabetes
J&J Remicade Rheumatoid arthritis Ulcerative colitis Sep 2005
Merck Singulair Asthma Perennial allergic rhinitis Aug 2005
Pfizer Lyrica Painful diabetic peripheral Adjunctive therapy for Jun 2005
neuropathy and post-herpetic adults with partial onset
neuralgia epileptic seizures
GSK Requip Parkinson’s disease Restless Legs Syndrome May 2005
J&J Remicade Rheumatoid arthritis Psoriasis May 2005
Pfizer Depo-subQ Contraception Management of pain Mar 2005
Provera 104 associated with
endometriosis
J&J Topamax Epileptic seizures Migraines Aug 2004
Allergan Botox Strabismus, blepharospasm Excessive sweating Jul 2004
(uncontrollable blinking), and
hemifacial spasm
GSK = GlaxoSmithKline; J&J = Johnson&Johnson
68
When a new application extension is appropriate
Extension to a new application can be appropriate for a wide variety of products,

particularly those that:
Were initially approved for relatively narrow applications;
Are facing declining sales as a result of competition or other factors.
Products with high sales that are facing generic competition are particularly good
candidates for a new application extension, since the introduction of low cost generics
typically results in declines of 50% to 70% of a drug’s revenues. For example, Abbott
was facing patent expiration in 2008 and imminent generic competition for its
blockbuster epilepsy drug Depakote ER. In December 2005, Abbott obtained FDA
approval to market the product for mania associated with bipolar disorder, a condition
that affects about 1.2% of the population or 2.5 million US adults. Sales of the drug
rose by 20% in 2006 to an estimated $1.2bn.
Because of the relatively greater resources required to demonstrate efficacy in an

entirely new therapeutic area compared with expanded usage of the drug for its original
indication or a closely-related variant of the originally approved indication (indication
extension), care must be taken to select new therapeutic applications that will provide
an acceptable return on investment. Because of this, market characteristics such as the
sizes of patient populations, competing products, pricing issues (if any), regulatory
hurdles, etc. are particularly important and must be closely evaluated to determine the
desirability of each potential new application. Equally important, applications must be
selected that will meet regulatory criteria of being a “significant new indication”, so
that additional exclusivity may be obtained.
As with other types of indication expansions, the factors that make pursuit of an
indication extension attractive in one region are often also present in others. Because of
69
this, it is common for manufacturers to pursue similar new application expansions
concurrently in the US, Canada and Europe.
New application extensions within drug families
Certain drug families have been found to address a wide range of loosely related
conditions, and because of this, are now being closely studied by their developers for
appropriate new application extensions. For example, many medications used to treat
depression have also been found to also address a range of other conditions such as
compulsive eating and smoking. Intuitively, this makes sense since those with
depression suffer more frequently from weight gain and the abuse of alcohol or tobacco
than those without depression. Table 3.7 shows approved and non-approved indications
for the most common anti-depressives. Some of these belong to the newer selective
serotonin reuptake inhibitor (SSRI) class and some belong to other drug classes such as
the serotonin-norepinephrine reuptake inhibitors (SNRIs) and aminoketones (AKs).
Case study: Acomplia
Because depression, overeating and the desire to smoke are all regulated in similar
regions of the brain, medications that address one of these conditions are often found to
affect the others. This was the case with GlaxoSmithKline’s Bupropion, the active
ingredient in the company’s Wellbutrin anti-depressant as well as its Zyban smoking
cessation medication. Similarly, Sanofi-Aventis’s new Acomplia, which was first
launched in the UK in June 2006 then subsequently introduced to Germany, Denmark,
Norway, Ireland, Finland and Austria later in the year, is indicated for weight loss but
may also be able to address other conditions such as the urge to smoke.
70
Table 3.7: Approved and non-approved indications for anti-depressants in
the US, 2007
Company Drug Class Approved Indications Non-Approved Indications
Eli Lilly Cymbalta SSRI Depression Fibromyalgia, urinary

incontinence, diabetic neuropathic
pain
GSK Bupropion AK Wellbutrin: Depression, n/a
seasonal affective disorder
Zyban: smoking cessation
GSK Paxil SSRI Depression, OCD, PTSD, Premature ejaculation, chronic
panic disorder, GAD, social headache, bipolar disorder,
phobia/social anxiety disorder compulsive gambling, hot flashes
and PMDD
Lundbeck Celexa SSRI Depression, OCD, social Diabetic neuropathy, premature
anxiety disorder, panic ejaculation, treatment of post-
disorder, Huntington’s disease, stroke pathological crying
PMDD
Pfizer Zoloft SSRI Depression, anxiety, OCD, General anxiety disorder, binge
PTSD, panic disorder, PMDD, eating disorder, premature
and social phobia/social ejaculation, treatment of refractory
anxiety disorder eurocardiogenic syncope in
children and adolescents,
impulsive aggressive behavior in
personality disordered patients
Wyeth Efexor SNRI Depression, OCD, social Diabetic neuropathy, migraine
anxiety disorder, panic prophylaxis hot-flashes in
disorder, GAD menopausal women, weight loss
OCD = obsessive-compulsive disorder; PTSD = post-traumatic stress disorder; PMDD = premenstrual

dysphoric disorder; GAD = generalized anxiety disorder
Acomplia, whose active ingredient is rimonabant, is awaiting FDA clearance to market,

following a Premarket Approval application (PMA) filed in mid 2005. It is the first in
the new cannabinoid antagonist class and therefore it works by blocking the CB1
receptor, one of two receptors found in the endocannabinoid system (EC system). In
clinical trials, the drug has shown a significantly greater ability to help patients achieve
and maintain weight loss than other prescription products currently available. Acomplia
has also demonstrated the ability to address a variety of cardiovascular conditions. In
the RIO-Lipids (Rimonabant In Obesity) trial, completed in 2004, just 25.8% of
patients were diagnosed with metabolic syndrome after one year of daily treatment with
20mg of Acomplia, compared with 52.9% of patients at the trial’s outset. Metabolic
71
outset. Metabolic syndrome is a condition characterized by a variety of factors
including:
Abdominal obesity (excessive fat tissue in and around the abdomen);
Atherogenic dyslipidemia (blood fat disorders — high triglycerides, low HDL

cholesterol and high LDL cholesterol — that foster plaque buildups in artery
walls);
Elevated blood pressure;
Insulin resistance or glucose intolerance;
Prothrombotic state (high fibrinogen or plasminogen activator inhibitor–1 in

blood);
Proinflammatory state (elevated C-reactive protein in the blood).
Acomplia has also been shown to help individuals stop smoking. In the STRATUS-US
(STudies with Rimonabant And Tobacco USe) trial, a significant portion of study
participants who had previously tried unsuccessfully to quit smoking, were able to quit
in 10 weeks without post cessation weight gain. In the study, 787 smokers who smoked
an average of 23 cigarettes per day were randomized to receive either placebo, or
rimonabant in doses of either 5 mg or 20 mg per day. They were permitted to continue
smoking for the first 2 weeks, but were instructed to attempt to quit smoking on Day
15. Of patients who took 20 mg of rimonabant, 36% had quit smoking by the end of the
10 week study period. Of patients who took either placebo or 5 mg rimonabant, only
20% successfully quit.
In February 2006, however, the US FDA issued an approvable letter for the obesity
indication and a non-approvable letter for smoking cessation, telling the company that
to continue to seek approval of Acomplia as an aid to smoking cessation, Sanofi-
Aventis must conduct another study to further examine Acomplia’s effects on smoking
cessation. Similarly, the EU approval was restricted to treatment of obesity without a
72
smoking cessation indication. It is believed that Sanofi-Aventis has resumed
investigation of Acomplia for smoking cessation, although as of March 2007, the
company has not released any further news on development.
Objectives of new application extension
For many products, particularly blockbusters, the main objective of a new application
extension is often to obtain an additional period of market exclusivity. The introduction
of a significant new application offers the longest exclusivity extensions of all
indication expansion strategies, and in fact, only one other strategy (pediatric
extension) offers the ability for a manufacturer to extend a drug’s exclusivity at all. For
drugs with very high sales, therefore, such extensions can be extremely valuable.
The other main objective of a new application extension is to increase the revenues of a
drug by broadening its usage. However, while other types of indication expansion may
be cost effectively pursued multiple times, for example when cancer drugs continues to
be expanded to an ever-widening number of variants, the resources required for
investigating each new therapeutic area are considerably greater. Therefore, a far
higher return is typically expected on each new application extension.
Nevertheless, some manufacturers employ new application extension as a primary

strategy to increase a product’s usage. For example, Berlex recently received FDA
approval to market its contraceptive, Yaz, for three significant conditions that affect
women of childbearing age. In October 2006, the drug was approved for the treatment
of premenstrual dysphoric disorder, a form of severe premenstrual syndrome (PMS)
and in January 2007, Yaz was approved for the treatment of acne vulgaris. Yaz was
first approved as an oral contraceptive in March 2006 and with the two application
extensions, became the first and thus far only oral contraceptive approved by the FDA
for three distinct indications.
73
Benefits of new application extension
The benefits of a new application extension are typically twofold: to increase the
revenue for a drug by increasing its uses, and to obtain an extension of the drug’s
market exclusivity. Because regulators seek to promote the maximum number of safe
and effective medicinal products as a means to further public health through robust
marketplace competition, they typically provide the greatest exclusivity incentives to
manufacturers who can demonstrate significant additional uses for products.
In the US, innovator companies are awarded three years of data exclusivity for an
indication expansion that requires clinical trials to be conducted. This means that
generics manufacturers could not claim a similar indication within that period. In
Europe, additional one-year exclusivity periods are granted for “significant new
indications” of marketed products.
Because many drugs experience different types of indication expansions, it can be

difficult to isolate the impact of particular extensions on the drug’s revenues; therefore,
Table 3.8 focuses on a selected group of drugs with more limited indication expansions
including expansion into new therapeutic applications. In most cases, revenue growth
for drugs with extended indications outpaces that of the drug’s manufacturer overall in
the year immediately following approval of the new indication; it can also exceed the
drug’s prior growth. For example, sales of Johnson & Johnson’s Remicade grew by a
strong 18% from 2004 to 2005. After Johnson & Johnson obtained two approvals into
new therapeutic areas in 2005, sales expanded by an even stronger 21%.
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Table 3.8: Impact on global revenues of new additional extensions of selected
drugs
Company Drug Date of Sales in Sales in Drug sales Company

additional extension following growth sales growth
extension year ($MM) year ($MM)
Abbott Depakote ER Dec 2005 1,000 1,200 20.0% -0.2%

J&J Remicade Sep 2005, 2,500 3,000 21.0% 4.5%
May 2005
Pfizer Lyrica June 2005 291 1,070 268.0% 2.6%
J&J Topamax Aug 2004 1,427 1,700 19.1% 6.4%
Allergan Botox Jul 2004 705 831 17.9% 13.4%
Repositioning
In 2006, the pharmaceutical industry embraced a systematic new means to develop new
application extensions for previously researched products. Called “repositioning” or
sometimes “re-purposing”, the trend refers to the methodical analysis of an entire
library of failed experimental compounds to identify new therapeutic applications.
Typically, this analysis is conducted by a specialty biotechnology company that will
apply a proprietary screening process which could incorporate multiple different
technologies, and could be used to re-evaluate hundreds of candidates that may have
been discarded as much as 20 years prior.
Repositioning is the result of several phenomena:
Growing pressure on Big Pharma to expand their late-stage pipelines, with new
drug approvals hitting new lows;
Increasing recognition that many highly successful products, including Pfizer’s

Viagra and Rogaine, Eli Lilly’s Gemzar and orphan drug thalidiomide, originally
failed in their first intended indications;
Ongoing attempts to contain rising R&D costs.
75
As discussed in Chapter 1, indication expansions in general are considerably more cost
effective than the development of entirely new molecules from scratch since the
developer can leverage early stage safety data. This can cut development costs from
more than $800m per drug to half of that or less. With a typical pharmaceutical
company having an inventory of about 2,000 failed Phase II or Phase III compounds
with another 150 or so failing each year, it make sense that drug developers would not
only seek to develop new application extensions for commercialized products but
would also attempt to identify any previously unidentified potential for these discarded
projects.
Although a rising number of firms around the world are establishing repositioning
services for Big Pharma, among the most prominent is Gene Logic, which announced
repositioning agreements with Organon, Pfizer, Roche and Eli Lilly in 2006. The deals
are structured so that Gene Logic will receive milestone payments based on certain
laboratory breakthroughs then royalties on eventual sales in the high single digits on
products that are commercialized. Gene Logic entered the drug-repositioning business
through its 2004 acquisition of Millennium Pharmaceuticals' repurposing technology
program, which brought in vivo imaging capabilities, in vitro cell-based profiling
technologies, and ex vivo analysis through a metabolomics program. While Gene Logic
is an established drug discovery and development firm specializing in genomics
technology and bioinformatics, other companies, such as Melior Discovery, focus
exclusively on repositioning. In November 2006, Melior announced a collaboration
with Merck to re-evaluate Merck’s neuroscience compounds utilizing its in vivo
Indication Discovery platform. Table 3.9 shows specialists in the repositioning field.
These repositioning programs are slowly starting to bear fruit. As a result of

GlaxoSmithKline’s ongoing repositioning initiatives, for example, the company has
been able to initiate 3 Phase II clinical studies and more than a dozen new lead to
candidate programs.
76
Table 3.9: Selected repositioning specialists
Company Focus
Cypress Bioscience Repositioning central nervous system compounds for functional somatic
syndromes.
Gene Logic Compounds discontinued after Phase II that did not demonstrate significant
safety issues; orally available, small-molecule drugs.
KineMed Discontinued Phase II and Phase III compounds.
MDS Proteomics Proprietary technology enables observation of proteins and interactions to
understand the underlying causes of disease and develop new drugs and
diagnostic products.
Melior Discovery Discontinued Phase II and Phase III compounds; pursues new indications for
compounds with expired composition-of-matter patents; also acquires and
develops products for its own pipeline.
Sosei New indications for both commercialized and abandoned compounds;
generates new intellectual property by making chemical modifications to the
compound or developing a new delivery method.
Source: Chemical & Engineering News, February 13, 2006 Business Insights Ltd
Case Study: Lyrica
Due in part to several key new application extensions, Pfizer’s Lyrica has quickly
become one of the company’s most successful drug launches. The drug was designed
as a successor to Pfizer’s highly successful anti-epileptic medication, Neurontin, which
lost US exclusivity in 2005.
In July 2004, Pfizer first obtained approval in Europe to use Lyrica in the management
of peripheral neuropathic pain as well as an adjunctive therapy in the treatment of
partial epileptic seizures. Lyrica was then approved by the FDA in December 2004 for
two forms of neuropathic pain - diabetic peripheral neuropathy and post-herpetic
neuralgia. Although these indications are relatively common, with diabetic peripheral
neuropathy alone affecting nearly three million Americans, on their own they would
not be sufficient to drive drug revenues to the blockbuster level. Because of this, Pfizer
simultaneously investigated other applications and over the next 18 months, obtained
approvals in the US and Europe to market Lyrica for a broader range of conditions
affecting a larger patient population. Approvals for new applications include:
77
US approval in June 2005 for use of Lyrica as adjunctive therapy for adults with
partial onset epileptic seizures. Epilepsy affects about 2.3 million people in the US,
with an additional 180,000 persons diagnosed with the condition each year;
European approval in March 2006 to treat generalized anxiety disorder (GAD) in

adults, a condition affecting approximately 12 million Europeans.
The anti-epileptic approval was particularly important, as it enables Pfizer to position

Lyrica as a next-generation product to its former blockbuster, Neurontin, and
encourage physicians to switch their large Neurontin patient bases to the new product
as a means to minimise the impact of generic competition to Neurontin. Because Lyrica
has proven to be as effective as Neurontin, but at lower doses, the drug is believed to
cause fewer side effects and thus has been well positioned to capture Neurontin's
market share.
These new application extensions also build upon a recent indication extension for
Lyrica. In September 2006, Pfizer obtained approval in Europe to market the drug as a
treatment for central nerve pain, a variant of the drug’s original indication. Central
nerve pain is associated with conditions such as spinal injury, stroke and multiple
sclerosis. Lyrica became the only medication approved in the EU to treat both
peripheral and central neuropathic pain, which together affects nearly 8 million people
in Europe.
As a result, Lyrica’s sales climbed from $291m in 2005, the drug’s first year on the
market, to more than $1.0bn in 2006, an astounding 268% gain. In the US, Lyrica has
gained an approximate 10% new prescription share of the anti-epileptic market.
According to a survey conducted by Pfizer, 70% of doctors prescribing Lyrica do so
because of the drug’s ability to provide rapid pain relief. Pfizer is continuing to develop
new applications for Lyrica, including generalized anxiety disorder, fibromyalgia, and
other neuropathic pain conditions.
78
Because of the significant financial benefits that manufacturers such as Pfizer and
others have been able to realize from such new application expansions, drug developers
both large and small continue to pursue new application extensions for leading
products. Selected announced initiatives are shown in Table 3.10.
Table 3.10: Selected new application extension initiatives for US

commercialized drugs
Company Drug Original indication Expanded indication/s
Abbott Humira Rheumatoid arthritis Crohn’s disease

Allergan Botox Strabismus, blepharospasm Migraines, constipation, stroke, others
(uncontrollable blinking), and
hemifacial spasm
Aspreva CellCept Prevention of organ transplant Lupus, myasthenia gravis, pemphigus
rejections vulgaris
Eli Lilly Cymbalta Depression Fibromyalgia, urinary incontinence,
diabetic neuropathic pain
Pfizer Celebrex Arthritis pain Sporadic adenomatous polyposis (a
precancerous condition caused by
growths in the intestines)
Pfizer Lyrica Painful diabetic peripheral Fibromyalgia, generalized anxiety
neuropathy and post-herpetic disorder
neuralgia
Roche MabThera Non-Hodgkin’s lymphoma Rheumatoid arthritis
Case Study: Botox
With more than 20 approved indications in over 70 countries, Allergan’s Botox is

among the most widely researched and strategically extended medications. Despite the
product’s sales of almost $1bn in 2006, Allergan continues to investigate new
applications for the product as a means to expand sales.
Unlike developed pharmaceutical products, naturally-occurring products such as

botulinum toxin cannot be patented. While Allergan has obtained patents on certain
formulations as well as various uses of those formulations, other developers are legally
able to develop formulations of the toxin without infringing on Allergan and several
offer similar BTX-A products. These include Beaufour Ipsen’s Dysport, Medy-Tox’s
79
Neuronox and Merz Pharmaceuticals’ Xeomin. Extended market exclusivity,
therefore, is not available to Botox.
Comprised of botulinum toxin serotype A (BTX-A), Botox is a toxic substance that in

1949 was found to block neuromuscular transmission. The toxin continued to be used
experimentally over the next several decades and in 1980, Dr. Alan Scott at the Smith-
Kettlewell Eye Research Institute used it to treat strabismus, a disorder in which the
eyes point in different directions. Scott subsequently sold his rights to the drug to
Allergan, then a small pharmaceutical company focusing on prescription eye therapies
and contact lenses, in 1988. The following year, Allergan obtained FDA approval to
market the drug, which it named Botox, in the US for the treatment of strabismus,
blepharospasm (uncontrollable blinking), and hemifacial spasm.
Allergan continued to investigate Botox, obtaining approvals to market for the product
for cervical dystonia (an involuntary muscle contraction causing sustained neck
twisting), hemifacial spasm, VII nerve disorder, juvenile cerebral palsy, adult
spasticity, hyperhidrosis, back pain, headache, anal fissure, hyperactivity of bladder,
achalasia, myoclonic disorders, spasmodic dysphonia, essential tremor, bruxism, and
multiple sclerosis. In 2002, Allergan obtained FDA approval to utilize Botox in a
cosmetic application to address forehead wrinkling, a procedure that had achieved
widespread popularity on an off-label basis. Although the common factor among these
conditions is that they all affect the muscular system, and thus are amenable to a
product, such as Botox, that freezes the muscles; however, they are all nonetheless
distinct disorders with differing pathology and etiology.
As the indications for which Botox could be used continued to expand, the drug’s
revenues have risen strongly, as shown in Figure 3.4. This has occurred even as
competitors to Botox have arisen. Since about half of the drug’s usage is for cosmetic
applications, the relatively recent approvals for winkle treatment have contributed
strongly to this growth. Following the US approval, Vistabel/Vistabex (the European
names for Botox Cosmetic) gained approval in France in March 2003, then received
approval in Spain, Scandinavia and Italy in the second quarter of 2004. In January
80
2005, the product received a positive opinion in the EU’s Mutual Recognition Process,
allowing it to be marketed for aesthetic applications in the broader European market
including Austria, Hungary, Greece, Belgium and Finland.
Figure 3.4: Botox indications and revenues, 2000 – 2006
Europe U.S. approves

1000 approves use for excessive
cosmetic use sweating
900
800
Global Botox Sales in $MM
U.S. approves
700
cosmetic use
600
500
400
300
200
100
0
2000 2001 2002 2003 2004 2005 2006
Europe approves
use for focal Japan approves
spasticity for cervical
dystonia
Source: Allergen public filings Business Insights Ltd
Allergan and others continue to study Botox for a range of additional therapeutic
indications. For example, an April 2005 issue of Headache reported that when
compared to placebo, Botox significantly reduced the frequency of headache attacks in
migraine patients who experience migraine pain 16 or more days each month.
Similarly, a study published in a November 2006 issue of the American Journal of
Gastroenterology found that Botox injections can relieve constipation caused by
inappropriate contraction or inability to relax the pelvic floor muscles during
defecation, providing better results than conventional remedies such fiber, laxatives
81
and surgery. Studies into a range of other uses including prostatic symptoms, paralysis
after stroke, asthma and obesity, are ongoing.
Additional aesthetic applications for Botox also appear to be promising. At present, the
product is mainly used to soften wrinkles in the forehead, around the eyes and around
the mouth. However, some physicians have also begun using Botox for skin tightening,
pore shrinkage, enhancement of breast implantation results, facial scar reduction and
facial slimming. Therefore, it is likely that over the next several years, Allergan will
continue to pursue approvals for additional indications and off-label usage of Botox,
particularly in the US, for as yet unapproved indications will rise.
Limitations of new application extension
Although manufacturers often pursue new application extensions to receive an

additional period of exclusivity on all of the drug’s uses and therefore may not
necessarily view the new indication’s market potential as a top priority, sales in the
new indication may nonetheless contribute to existing drug revenues and maximizing
these opportunities would enable the manufacturer to achieve an overall return on
investment for the drug.
The primary limitation of a new application extension relates to the drug’s

pharmacology – does it work in the intended new therapeutic area? Although safety has
already been demonstrated through testing in the drug’s original indication, the product
may not prove efficacious in other applications.
Other limitations of new application extensions relate to the market for the new
indication. As with other strategies, products that are uncompetitive are unlikely to
benefit from a new application extension. This could result from many factors
including:
Small potential market;
82
Entrenched competitors with very strong brand equity;
Lack of significant benefits or unacceptable side effects vis-à-vis competing

products;
Low prices of competing products for the new indication, such as from generics;
Heavy usage of effective over-the-counter medicines to address the condition.
Ongoing cost containment initiatives within the global managed care industry are
resulting in rising imperatives to shift from higher priced medications to lower priced
products. Therefore, appropriate pricing is vital for a product to be successful in a new
therapeutic indication. Because a drug must be priced at the same rate for all
indications (otherwise consumers would simply purchase the lowest priced version of
the drug and use it for any approved indication), differences between the drug’s current
price and the prices of competitors in the new indication may create either
opportunities or disincentives for an originator company, as shown in Figure 3.5.
Aside from a situation in which the drug, in its initial indication, is priced on par with
products sold for a possible additional indication, there are only two scenarios – either
competing products in the new indication will be largely priced higher, or they will be
mainly priced lower, than the drug to be expanded. If they are priced higher, as in
Scenario 1, a lower-priced drug would benefit in this market since consumers and
health care plans would likely favor the low cost candidate (assuming that efficacy and
other effects were similar). On the other hand, if drugs in the new market are largely
lower priced, as in the case of a market that has been heavily genericized, there would
be no reason for consumers to use the new drug unless it offered significantly greater
therapeutic value. Most commonly, however, this situation (Scenario 2) would
represent such a significant competitive threat as to render an indication expansion not
worthwhile.
83
Figure 3.5: Pricing opportunities and threats for a new drug indication
Scenario 1: Opportunity Scenario 2: Threat
Price
differential
between
new
indication
and market
Rest of market Rest of market

New indication New indication
Price
Source: Author’s Insights Business Insights Ltd
Of course, alternative measures may be considered. For example, the price of the drug
may be reduced in all markets – particularly if generic competition is soon expected in
primary markets.
84
Conclusion
Although they require somewhat greater time and resource commitments than other
indication expansion strategies, new application extensions are a valuable tool to
maximize the return on investment of products in a drug developer’s portfolio. With the
introduction of high volume screening of failed compounds through new repositioning
services, new application extensions are likely to become an even more important
indication expansion strategy over the next several years as the pharmaceutical industry
continues to face pressure to produce late stage drug candidates while containing rising
R&D spending.
85
86
CHAPTER 4
Pediatric and special

population extension
87
Chapter 4 Pediatric and special
population extensions
Summary
The expansion of a drug’s usage to special populations primarily focuses on

pediatric extensions, although some manufacturers try to extend drug usage to
other groups such as men (for drugs initially approved in women) or women (for
medications originally approved for use by men).
Gender-based extensions occur relatively infrequently, as the group of drugs

indicated originally for only one gender is relatively small.
As of early 2007, approximately three quarters of all medicines used by children

have not been adequately researched in children.
More so than other types of indication expansions, the main objective of a

pediatric extension is to obtain an additional period of market exclusivity for a
product; this is due both to the small size of the pediatric market and physicians’
willingness to prescribe medicines off-label for children.
In both the US and Europe, drug makers are awarded an additional six months of
exclusivity in exchange for providing data on the effects of the drug in children.
Pediatric market exclusivity can be extremely cost effective; blockbuster drugs

generate more than $2.7m per day for each $1bn in annual sales but pediatric
testing typically costs just $4m per drug.
In December 2003, President Bush signed the Pediatric Research Equity Act,
giving the FDA the authority to require pediatric studies of drugs.
The US pediatric exclusivity law that provides for pediatric extensions is due for
review in late 2007 and may not be renewed; the European law will be reviewed
in 2012.
A pediatric extension does not preclude the threat of infringement from generics
manufacturers seeking to invalidate a drug’s intellectual property so they can gain
earlier access to the market.
88
Introduction
The expansion of a drug’s usage to special populations primarily focuses on pediatric

extensions, although to a considerably lesser extent, manufacturers sometimes try to
extend drug usage to other groups such as men (for drugs initially approved in women),
women (for medications originally approved for use by men) or geriatric populations.
Pediatric extension is by far the most commonly sought as most drugs are initially
tested in adult men and women, with children representing the largest single additional
population of users; furthermore, many jurisdictions provide additional market
exclusivity for drugs that have been proven effective in children, as a means to
encourage manufacturers to validate safety and efficacy in pediatric patients. Table
4.11 shows recent pediatric and gender-based extensions of drugs commercialized in
the US
89
Table 4.11: Selected new application extension initiatives for US
commercialized drugs
Company Drug Original Indication Expanded Indication Type Date of

Clearance
Pfizer Celebrex Osteoarthritis pain Juvenile rheumatoid P Dec 2006

arthritis
Salix Colazal Ulcerative colitis (UC) UC in patients aged 5 to
17 years P Dec 2006
Sanofi- Ambien Sleeping aid Pediatric patients P Nov 2006
Aventis
Procter & Actonel Osteoporosis for women Osteoporosis for men G Aug 2006
Gamble
Roche Fuzeon HIV-1 infection and 5 - 16 year olds P Jul 2006
replication despite anti-
retroviral therapy
Alcon Betaxon Elevated intra-ocular Pediatric patients P Jun 2006
pressure
AstraZeneca Nexium Short term tx of gastro- Tx of GERD in patients P May 2006
esophageal reflux disease aged12 - 17
(GERD)
Johnson & Remicade Rheumatoid arthritis Children with Crohn’s P May 2006
Johnson disease
Novartis Sandostatin Acromegaly Weight loss in patients P Jan 2006
LAR Depot aged 6 –17 years
Novartis Lescol High cholesterol Patients 10-16 years with P Dec 2005
heterozygous familial
hyper-cholesterolemia
Savient Oxandrin Weight gain Geriatric patients S Sep 2005
Pharma
Gilead Emtriva HIV-1 infection in Patients to 3 months of age P Sep 2005
Sciences combination with other
anti-retroviral agents
Merck Singulair Asthma Perennial allergic rhinitis in P Aug 2005
children to 6 months of age
Abbott Norvir HIV-1 infection Extended age range from 2 P Jun 2005
years down to 1 month
Pfizer Zyvox Bacterial infec-tions in Bacterial infections in P May 2005
adults pediatric patients
Novartis Trileptal Epilepsy Adjunctive therapy in
children aged 2 years and P Mar 2005
above
P = Pediatric; G= Gender-based; S= Geriatric.
90
Pediatric extensions
The market for validated pediatric medicines is large but relatively undeveloped, since
the global pediatric population is small compared with the adult population. As of early
2007, approximately three quarters of all medicines used by children have not been
adequately researched in them, and thousands of serious injuries or deaths each year
continue to be linked to off-label use of adult medicines by children, since doctors still
routinely prescribe adult medications for children. This off-label prescription is due
drug makers’ historic reluctance to test medicines in children because of the small size
of the pediatric market compared with the adult market. Although regulators had
requested such voluntary testing for decades, they were unable to compel pediatric
testing and some drug companies subsequently broke promises to test certain medicines
in children. An FDA report issued in 2001, for example, claims that the pharmaceutical
industry reneged on 60 out of 71 pediatric tests it had promised to complete between
1991 and 1996.
Despite more recently implemented exclusivity incentives for drug makers, only about
four dozen prescription drugs are currently FDA approved to treat children. Many of
these are anti-infectives and central nervous system drugs for conditions such as
epilepsy and attention deficit hyperactivity disorder (ADHD).
The need to test medicines specifically in children is related to the distinct physiologies
of children compared to adults. This includes:
Different metabolism and absorption process of drugs;
Unique metabolism and absorption by infants, unlike that of older children;
Significantly different drug metabolism and absorption by premature infants;
Distinct vulnerabilities towards particular drugs;
Proper drug dosing not able to be predicted based upon patient weight or otherwise
extrapolated from adult data;
91
Potential for certain drugs to impede growth process and other normal
development.
Because of these challenges, many drugs that are evaluated in children are not found to
be effective, as shown in Table 4.12. However, to encourage developers to conduct
pediatric studies, the FDA grants additional market exclusivity to drugs found to be not
approvable for use in children.
Table 4.12: Non-approved pediatric usage for US commercialized drugs
Company Drug Expansion sought Reason for rejection Date of

rejection
Roche Fuzeon Patients < 6 years old Insufficient data Jul 2006
Alcon Azopt Pediatric patients Efficacy not demonstrated Jun 2006
UCB Pharma Keppra Patients to age 4 Efficacy not demonstrated,
high rate of side effects Jun 2005
Sanofi-Aventis Amaryl Patients aged 8 to 17 years Efficacy not demonstrated May 2005
Pfizer Zyvox Pediatric patients Efficacy not demonstrated Feb 2005
Eli Lilly Gemzar Pediatric patients Efficacy not demonstrated Jan 2005
Organon Remeron Pediatric patients Efficacy not demonstrated, Jan 2005
high rate of side effects
GlaxoSmithKline Avandia Patients aged 10 to 17 years Efficacy not demonstrated Dec 2004
Abbott Meridia Pediatric patients Efficacy not demonstrated Oct 2004
Sanofi-Aventis Avapro Patients ages 6 to 16 years Efficacy not demonstrated Sep 2004
Source: US FDA Business Insights Ltd
For the purposes of this report, an indication expansion to infants, children or

adolescents is considered a pediatric extension even when the application differs from
the drug’s original approved indication. For example, Merck’s Singulair was first
approved in 1997 for treatment of asthma; the drug’s August 2005 FDA approval for
relief of symptoms of indoor allergies in children, however, is considered a pediatric
extension rather than a new application expansion as described in Chapter 3. However,
when pediatric approval is granted along with adult approval, as when
GlaxoSmithKline won FDA approval in March 2006 to market its Relenza the
prevention of influenza in adults and children aged 5 years and older, the approval is
not specifically considered a pediatric extension.
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Gender-based extensions
Gender-based extensions occur relatively infrequently, as the group of drugs indicated

originally for only one gender is relatively small. They include products that address
male pattern baldness, symptoms of menopause, osteoporosis, amongst others.
In August 2006, for example, Procter & Gamble received FDA approval to market its
Actonel for the treatment of osteoporosis in men; the drug was first approved in March
1998 for the treatment and prevention of osteoporosis in postmenopausal women.
Though women are four times more likely to acquire it, about 5 million men in the US
have osteoporosis, according to the National Osteoporosis Foundation. Usage of other
biphosphonates for osteoporosis, including Merck’s Fosamax, has also been extended
to men. Such extensions are rare, though, with the Fosamax approval occurring in year
2000 and other extensions, such as approval of Pfizer’s hair loss drug Rogaine for use
in women, occurring in 1991 (Rogaine was first approved by the FDA for use in men in
1998).
While certain oncology products such as drugs that address breast cancer and prostate
cancer, are initially approved for conditions that primarily affect one gender, cancer
drugs as a group tend to be effective against more than one type of cancer so extensions
to other types of cancers are considered to be extensions to related indications as
described in Chapter 2, rather than gender-based extensions.
Geriatric extensions
Even less commonly, manufacturers sometimes seek specific labelling for usage of a
product in geriatric populations. This is most useful for drugs that were initially
approved for usage in the broader population of mature, but not elderly, adults when
usage of the drug by seniors may be high and usage conditions may vary from those in
younger patients.
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For example, in September 2005, the FDA approved Savient Pharmceuticals’
Supplemental New Drug Application (SNDA) for Oxandrin tablets. The SNDA
provides for the addition of a Geriatric Use subsection in the Precautions section of the
drug’s prescribing information. Included in the new subsection is the observation of an
increased half-life in elderly patients as compared to younger patients. The new
labeling recommends a lower dose in elderly patients based on greater sensitivity to
drug-induced fluid retention and transaminase elevations.
Savient’s indication extension was likely related to imminent generic competition, as

the FDA approved the first generic version of Oxandrin in December 2006. The
prescribing information for Upsher-Smith’s generic oxandrolone, however, does not
include dosing information for seniors, giving Savient an advantage in the marketplace.
Oxandrin, a synthetic derivative of testosterone, was first approved in the 1990s to

promote weight gain after involuntary weight loss. This can occur following extensive
surgery, chronic infections, or severe trauma; it can also occur without definite
pathophysiologic linkages. Involuntary weight loss, or wasting, is particularly common
in the elderly, with 10% to 20% of men and women over the age of 65 suffering from
the condition. Such weight loss is associated with a range of other health problems,
including increased risk of osteoporosis, greater risk of falling, reduced immune system
response, etc., and therefore most physicians recommend treatment.
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When a pediatric or special population extension is
appropriate
Since pediatric or special population extensions provide a means to validate safety and
efficacy in additional patient populations who are using the product, these types of
indication expansions are particularly appropriate for products that are being used off-
label by groups of patients in which they were not initially tested. This includes
children of all ages as well as members of the opposite gender for which the product
was indicated. Pediatric or special population extensions may also be appropriate when
competitors to a particular product are being used off-label, as they offer an alternative
to off-label drug usage by providing a similar product whose safety and efficacy has
been specifically validated in the group of users.
From a business development perspective, pediatric extensions are also appropriate

when a drug is facing imminent competition as a result of an expected exclusivity loss,
as these types of indication expansions provide a straightforward means to protect
against generic competition for an additional six months.
Objectives of pediatric and special population

extensions
More so than other types of indication expansions, the main objective of a pediatric
extension is to obtain an additional period of market exclusivity for a product. In a
small proportion of cases where a disease represents a significant opportunity within a
pediatric population, expanded usage of the drug for children may itself be an
important goal. For example, in December 2006, Pfizer received FDA approval to
market its Celebrex for the treatment of juvenile rheumatoid arthritis. This condition
affects from 100,000 to 200,000 children in the US, requires ongoing usage of
medication to control symptoms and parents are typically extremely motivated to
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ensure compliance. At an average drug cost of about $1,000 per year, this indication
adds about $150m annually in revenues for Celebrex.
However, since additional exclusivity is generally not granted for products whose
usage is extended to special populations, the main goal of these types of indication
expansions is typically to target an additional population of patients.
Benefits of pediatric and special population extensions
In general, the main benefit from extensions to special adult populations is the extra
sales revenue earned by the drug as a result of its expanded usage. Additional periods
of market exclusivity are rarely granted for special population, non-pediatric
extensions.
Pediatric extensions, however, are eligible for additional market exclusivity and this
benefit is the primary driver behind most pediatric extension applications. This is due
to the relatively small population of children compared with adults, and because many
medications originally tested in adults are nonetheless prescribed for children; so
additional sales from a pediatric indication are unlikely to be significant. However,
additional market exclusivity can be extremely important for blockbuster drugs, since
these drugs generate more than $2.7m per day for each $1bn in annual sales. With
generic versions typically priced at a discount of 50% or more, generic competition can
therefore cost a drug over $1.3m per day for every $1bn in annual sales. At about $4m
per drug, according to an industry survey by the Tufts Center for the Study of Drug
Development, pediatric tests are extremely cost effective. Furthermore, pediatric
extensions are one of just two avenues (the other being an extension into a significant
new indication) available to drug makers to extend market exclusivity.
Because of the significant impact of generic competition, pediatric exclusivity

extensions have become a routine lifecycle management strategy for virtually all drug
96
makers and particularly those with blockbusters. For example, Bristol-Myers Squibb’s
six month pediatric extension for its Pravachol cholesterol reducer was worth an
estimated $814m. With its US composition of matter patent scheduled to expire in
October 2005 and global revenues falling from $2.8bn in 2003 to $2.2bn in 2005,
Pravachol would have experienced an immediate 37% revenue decline six months
sooner than it otherwise did had the FDA not granted a pediatric extension to April
2006. Because of this financial benefit, drug developers continue to pursue pediatric
extensions for top products, although these initiatives are rarely announced. Current
applications under review include pediatric extensions for GlaxoSmithKline’s Advair,
Johnson & Johnson’s Risperdal, Pfizer’s Vfend, Roche’s Cardene and Wyeth’s
Protonix.
United States
As part of the FDA Modernization Act of 1997, former President Bill Clinton signed
into law section 505A of the Federal Food, Drug and Cosmetic Act, permitting certain
applications to obtain an additional six months of marketing exclusivity (“pediatric
exclusivity”) if the sponsor submits requested information relating to the use of the
drug in the pediatric population. The law was created to encourage further pediatric
testing, thereby creating a growing group of products that have been proven safe in
children and reducing the potential of adverse reactions related to off-label usage of
potentially unsafe medications. In light of the varying effects that a drug can have on
adults compared with children, the law grants additional exclusivity to drug developers
that submit pediatric testing data regardless of whether the data demonstrates safety
and efficacy in children.
The 1997 law mandated that the pediatric exclusivity law would expire at the end of
2001, as Congress was unsure of the effects on public health care costs, but in January
2002, the Best Pharmaceuticals for Children Act renewed the pediatric exclusivity
provision through October 2007; it also created a fund, managed by the National
Institutes of Health (NIH) and FDA, for research and studies on older products.
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Pediatric Research Equity Act of 2003
In December 2003, President George W. Bush signed the Pediatric Research Equity
Act, giving the FDA the authority to require pediatric studies of drugs to ensure they
are safe for children. The law builds upon prior initiatives dating to the late 1970s to
boost pediatric testing, by adding a compulsory component to earlier incentive-based
approaches. Interestingly, it was passed after a similar 2001 law, called the Pediatric
Rule, was struck down in October 2002 by a US Federal District Court on the grounds
that “Congress never intended to give the FDA power to require drug companies to test
adult medicines commonly given to children”.
The result of the pediatric exclusivity incentive enacted in 1997 and the later Pediatric
Research Equity Act have been labeling updates on more than 100 US medicines to
specifically allow usage by children. According to a study published recently in the
Journal of the American Medical Association, between 1998 and 2004, 253 studies
were submitted to the agency for pediatric exclusivity. Of these:
125 (50%) evaluated efficacy;
51 (20%) were multi-dose pharmacokinetic;
34 (13%) were single-dose pharmacokinetic;
43 (17%) were safety studies.
Of the 253 studies, 127 resulted in approval of the medication by children and 113
were published in peer-reviewed medical literature.
Many of the medications that the FDA has requested pediatric data for are widely used
products that have been linked with side effects. For example, in December 2005, the
FDA sent a written request to Sanofi-Aventis to conduct pediatric trials of its Ambien
sleeping aid. In 2006, Ambien had experienced double-digit sales growth, with US
sales alone rising to about $2bn from less than $1bn in 2005; however, it had been
linked with a series of disturbing side effects including sleepwalking, memory
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loss/amnesia and binge eating while sleeping. Pediatric studies conducted on the drug,
however, demonstrated safety and efficacy in children so in November 2006, Ambien’s
label was updated to included pediatric usage and the drug was given a six month
market exclusivity extension.
It should also be noted, however, that a manufacturer is not required to conduct

pediatric studies as requested by the FDA and may decline a request to provide this
data.
Chances of Pediatric Exclusivity Renewal in 2007
Since its first enactment in 1997, the pediatric exclusivity law has been controversial.
An array of consumer groups continue to protest that additional exclusivity for
blockbusters delays the public’s access to lower cost generic products and thereby
essentially transfers much needed healthcare dollars from patients/payors to Big
Pharma. Meanwhile, drug developers and their armies of lobbyists maintain that six
months of exclusivity is insufficient and five to six years would be more appropriate as
an incentive to investigate products for the small pediatric markets. With a shift in
control of Congress from Republican to Democrat as a result of the 2006 elections,
there is now a real possibility that the exclusivity provisions may not be renewed.
Although several Democrats voted for the earlier pediatric extension laws, most of the
support was Republican. In the House of Representatives, 212 out of 219 Republicans
(96.8%) voted for the bill, while just 125 out of 211 Democrats (59.2%) supported it.
In the Congress which convened January 2007, Republican seats have been reduced to
202 while the Democratic presence has risen to 233 seats. Furthermore, Democrat
Henry Waxman, one of the key figures behind the industry-reforming Hatch-Waxman
Act that paved the way for generic competition in the US drug industry, now chairs the
important Government Reform Committee and has long been a proponent of reducing
the cost to consumers of medicines. Therefore, there is a real possibility that the
pediatric exclusivity extension, if not eliminated altogether, will be modified to be
somewhat less beneficial for drug developers.
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Europe
In September 2004, the European Commission released the long-awaited Draft

Pediatric Regulation: Proposal for a Regulation of the European Parliament and of the
Council on Medicinal Products for Paediatric Use and amending Council Regulation
(EEC) No 1786/92, Directive 2001/83/EC and Regulation (EC) No 726/2004. In June
2006, the European Parliament adopted a modified version of the original proposal.
The directive, which takes effect in 2007, provides for:
A six month extension for patented products to allow industry to develop children’s
medicines with a revision clause allowing re-evaluation of this point six years after
taking force;
Amendments to shorten procedures and administrative delays, improve

transparency and the exchange of information to prevent the duplication of clinical
trials;
Launch of a new research program called "Medicines Investigation for the Children
of Europe" (MICE) to adapt for children existing products that are no longer
covered by patents;
The creation of a new Pediatric Committee set up within the European Medicines
Agency (EMEA) that would independently evaluate scientific investigation plans
for pediatric drug usage put forward by companies.
The new Pediatric Committee will render decisions on many of the details pertaining to
individual drug research, including how many and what types of pediatric studies are
necessary. It will also evaluate the value of older studies either conducted in other
countries or in academic environments.
Case study: Claritin and Zyrtec
Due to the high value of market exclusivity period extensions, some manufacturers in
particularly large markets have obtained multiple extensions by continuing to
demonstrate safety and efficacy of their products in ever-younger patients. Pfizer and
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Schering-Plough, for example, employed such a strategy with their Zyrtec and Claritin
antihistamines in an ongoing battle for control of the $10bn global market for non-
sedating antihistamines. Figure 4.6 shows key pediatric extensions obtained for Claritin
and Zyrtec.
Figure 4.6: Timeline of Zyrtec & Claritin US pediatric extensions, 1994 –

2006
Claritin
Approved in patients
Approved in patients age 2 & older
age 12 & older
FDA approves new
Approved in patients grape flavor syrup
age 6 & older
1995 1997 1999 2001 2003 2005

1994 1996 1998 2000 2002 2004 2006
January: approved in patients Approved in children

age 12 & older age 6 months & older
September: approved in
patients age 6 & older
Approvedininpatients
patientsage
age New chewable
Approved
Zyrtec
Zyrtec formulation approved
22&&older
older
for children
Source: Author’s Insights Business Insights Ltd
As the first non-sedating antihistamine when it was introduced in 1994, Claritin quickly
built sales by providing relief from allergies without the unpleasant and often
dangerous side effect of drowsiness. In 1996, competition entered the category with
Pfizer’s Zyrtec and Sanofi-Aventis’s Allegra, which both offered similar non-drowsy
relief of allergies. Although the increased competition spurred market growth, with US
sales of non-sedating antihistamines reaching more than $5bn in 2002 (the year before
Claritin was switched from Rx to OTC use), it also created intense competition among
101
the three leading brands, with each fighting to both extend current sales and protect
future revenues through exclusivity extensions. In an effort to capture share of the $2bn
global market for pediatric antihistamines, the companies also introduced products
specifically designed for children, such as chewable formulations and new flavors.
Limitations of pediatric and special population

extensions
Even more so than with new application extensions, the primary driver of pediatric
extensions is often not the sales potential of the new market (in this case, children), but
rather the extended period of market exclusivity granted to all of the drug’s uses. This
is due to a variety of factors including:
Small size of the pediatric market;
Physicians' willingness to prescribe medicines off-label for children;
Availability of some market exclusivity extensions in return for provision of

pediatric data even if the drug is not approved for use in children.
Since the main goal of pediatric testing is not necessarily to obtain an approval for use,
but to demonstrate that the drug has been adequately researched in children, the
pharmacologic properties of the drug that would lead to an approval for its use in
children are not of significant import.
Vis-à-vis the primary benefit of additional exclusivity, the main limitation of pediatric
extensions is their shorter duration compared with new application extensions.
In the US, drug makers are awarded three years of data exclusivity for an indication
expansion that requires clinical trials to be conducted; in Europe, additional one-year
exclusivity periods are granted for “significant new indications” of marketed products.
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These periods are substantially longer than the six additional six months of exclusivity
awarded for the provision of pediatric data.
Furthermore, as with other indication expansion strategies, a pediatric extension does

not preclude the threat of infringement from generics manufacturers seeking to
invalidate a drug’s intellectual property so they can gain earlier access to the market.
These challenges are not only time consuming and costly from a legal standpoint, but
also pose a real risk that the drug’s additional exclusivity will be invalidated.
Case study: Norvasc
In 2006, Pfizer’s hypertension drug Norvasc was its second most important product
after Lipitor, with global revenues of nearly $5bn and US sales at about half this level.
This was the result of a series of ongoing indication expansions, such as Norvasc’s
November 2005 FDA approval for treatment of angiographically documented coronary
artery disease. The drug remained the world’s most prescribed branded medicine for
treating hypertension, although over the past several years it had experienced patent
expirations in several European countries. Defending sales in the large US market,
therefore, was a paramount concern and to this end, Pfizer had obtained a pediatric
exclusivity extension, delaying the expiration of the drug’s US exclusivity to
September 2007 from March 2007.
However, Norvasc’s high revenues had long made it a target for generic manufacture.
Dating at least to 2001, several generics manufacturers had filed applications with the
FDA seeking to market similar products such as amlodipine maleate, a variation of
Norvasc’s active ingredient, amlodipine besylate. Pfizer prevailed against all of these
early challengers, with only one case prior to 2006 going to trial. In January 2006, the
US District Court for the Northern District of Illinois held that Pfizer’s amlodipine
besylate patent was valid and infringed by the generic manufacturer Apotex’s product.
The court issued an injunction prohibiting Apotex from marketing its generic
amlodipine besylate product before the expiration of Pfizer’s amlodipine besylate
patent, including the additional six-month pediatric exclusivity period. Later in the
103
year, Pfizer prevailed in a similar case brought in a North Carolina Federal Court
against Synthon Laboratories.
A subsequent challenge from Mylan Laboratories, however, is proving more difficult

for Pfizer to win and threatens to cut short Norvasc’s pediatric exclusivity. The case
dates to October 2002, when Mylan announced that it had filed an Abbreviated New
Drug Application (ANDA) seeking FDA approval to sell amlodipine besylate tablets
prior to the expiration of Pfizer’s patents on Norvasc. Pfizer filed suit against Mylan,
but not before the expiration of the 45 day statutory period, so the FDA could approve
Mylan's ANDA as soon as the exclusivity period expires. In October 2005, the FDA
confirmed that Mylan was the first generic company to file on all strengths of Norvasc
tablets (2.5mg, 5mg and 10mg) so is eligible for 180 days of market exclusivity.
Mylan’s exclusivity will begin to run from the earlier of the commercial launch of the
Mylan product or a final court decision concerning the pending litigation between
Pfizer and Mylan. This exclusivity period became the subject of a protracted patent
infringement case between the two companies.
To prevent Mylan from bringing a generic version of Norvasc to market before

September 2007, when Norvasc’s pediatric exclusivity period ended, Pfizer filed a
lawsuit against Mylan alleging that Mylan’s product infringed upon Pfizer’s US patents
numbers 4,572,909 (“909”) and 4,879,303 (“303”). Mylan argued that Pfizer’s claims
of infringement of the ‘909 patent should be dismissed since the ‘909 patent had
expired on July 31, 2006, so there was no longer a case with respect to that patent.
Pfizer responded that the district court retained jurisdiction over a patent infringement
case when the patent has expired but the period of pediatric exclusivity remained in
question. In October 2006, the court agreed with Mylan on the issue of the ‘909 patent
expiration, finding that the rights secured by the patent are no longer protectable so
entitlement to injunctive relief becomes moot because that relief is no longer available.
Pfizer brought a subsequent and final suit in November 2006 to challenge the earlier
ruling in favor of Mylan. During the seven-day trial in a US Federal Court in the
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Western District of Pennsylvania, Mylan argued that Pfizer’s patents on Norvasc were
unenforceable and invalid because they contained an incorrect formula for the drug.
Norvasc co-inventor James I. Wells admitted under oath that the patent application for
the drug contained an incorrect formula, Mylan alleged that Pfizer changed the Norvasc
formulation for the sole purpose of extending its exclusivity by three years; Pfizer
responded that the formula had been changed because the first one that was patented
had problems with both stability and stickiness in processing the medication in tablet
form. As of February 2007, a final opinion in the case had not been issued.
Conclusion
Pediatric extensions are an important type of indication expansion, as they can add an
additional six months of market exclusivity to a drug’s patent protection in the US as
well as Europe. This is the most important for blockbuster drugs with very high sales,
but can also help protect smaller products from revenue losses upon the introduction of
generic competition. Although new application extensions provide longer exclusivity
extensions in both the US and Europe, pediatric extensions are typically easier and less
expensive to conduct as they do not require investigation into an entirely new
therapeutic area. Because of this, pediatric extensions have become commonplace in
the pharmaceutical industry; their continued usage, however, depends upon the renewal
of legislation creating them. In the US, this legislation is scheduled for review in late
2007 and in Europe, it will be revisited in 2012.
Extensions to special populations of patients, such as extending a drug first approved in

men to women and vice versa, are considerably less common as they do not provide for
important market exclusivity extensions.
105
106
CHAPTER 5
Extension of usage conditions
107
Chapter 5 Extension of usage
conditions
Summary
Usage extension involves expanding the conditions under which a drug may be
used by providing for a variation in the drug’s administration exclusive of
reformulations.
Typical usage extensions include expanding a drug’s usage from combination

therapy to monotherapy or vice versa; allowing a drug to be taken without food;
or elimination of requirements that patients have failed other drug therapies.
Usage extension is less common than other types of indication expansion.
therapy to monotherapy is often appealing for a variety of reasons so many
manufacturers of products approved in combination therapy seek to expand usage
of those medications to monotherapy.
Usage extensions from monotherapy to combination therapy are less common,

but can be a useful way to broaden a medication’s utility when the other
medications with which the drug is to be used are extremely popular.
Usage extensions may make a product more convenient to take, such as by

eliminating the requirement to take other medications or food concurrently; they
may also broaden the population of patients who may use the drug, typically by
extending a drug’s usage from second line to first line therapy.
Although drug developers must invest in additional clinical research to support an

application for a usage extension, this investment is typically lower than for other
types of indication expansion.
Unlike other indication expansion strategies, such as new application extensions

and pediatric extensions, usage extensions do not typically extend a drug’s
market exclusivity. Therefore, they cannot help delay a decline in drug revenues
caused by loss of market exclusivity and resulting generic competition.
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Introduction
Usage extension, or the expansion of the conditions under which a drug may be used, is
a relatively less common form of indication expansion. Unlike other types of indication
expansion in which a drug may be used to address a broader range of diseases (some of
which may be closely related to the original indication and others of which may be
entirely different diseases), a usage extension does not extend the range of ailments that
a drug may address; rather, it provides for a variation in the drug’s administration
exclusive of reformulations. This includes:
Expansion of a drug’s usage from combination therapy to monotherapy;
Expansion of a drug’s usage from monotherapy to combination therapy;
Other usage variations such as administration with or without food, variations in

dosing frequency, elimination of requirements that patients have failed other drug
therapies or long term use.
As shown in Table 5.13, extensions regarding usage in combination or apart from other
medicines are the most common type of usage extension.
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Table 5.13: Selected usage extensions for US commercialized drugs
Company Drug Original indication Expanded Type Date of

indication clearance
Amylin Byetta Monotherapy for patients With a thiazolidine-dione C Dec 2006

Pharma, with type 2 diabetes for patients who have not
Eli Lilly adequately controlled their
diabetes after taking a TZD
alone
Novartis Femara Treatment of early breast Adjuvant therapy for early O Dec 2005
cancer in post-menopausal breast cancer
women who had 5 years
of tamoxifen therapy
Reliant Antara To reduce elevated LDL-C, Administration with or O Nov 2005
Pharma total-C, triglycerides, and without food
apo B and increase HDL-C
in adults with primary
hypercholesterolemia or
mixed dyslipidemia
Novartis Diovan Heart failure in patients Heart failure O Aug 2005
intolerant of ACE inhibitors
J&J Topamax Epilepsy adjunctive therapy Epilepsy monotherapy M Jun 2005
GSK Lamictal Epilepsy adjunctive therapy Epilepsy monotherapy M Jan 2004
Novartis Starlix Monotherapy for patients With a TZD for patients C Dec 2003
with type 2 diabetes who have not controlled
their diabetes after taking a
TZD alone
Eli Lilly Zyprexa Monotherapy for the With lithium or valproate C Jul 2003
treatment of manic for tx of manic episodes
episodes associated with associated with bipolar
bipolar disorder disorder
M= Monotherapy; C= Combination therapy; O=Other

GSK = GlaxoSmithKline; J&J = Johnson & Johnson
110
Monotherapy extensions
therapy to monotherapy is often appealing for a variety of reasons. For most conditions,
monotherapy with a single medication offers:
Decreased adverse effects;
Diminished potential for drug interactions;
Greater convenience and therefore improved patient compliance;
Lower cost.
As disease targets become increasingly complex, a growing number of conditions

including HIV, cancer, cardiovascular disease and metabolic disease, have been found
to respond best to combinations of medications. New medications, particularly in new
drug classes, may also initially be cleared for monotherapy.
For example, in March 2000, GlaxoSmithKline’s Avandia was initially approved for
use in the EU only in combination with other oral anti-diabetic agents in well defined
circumstances. In March 2003, however, GlaxoSmithKline obtained EU approval to
market Avandia as oral monotherapy in type 2 diabetes patients, particularly
overweight patients, for whom the current standard of care, metformin, was not a
treatment option. This trend of moving medications from combination therapy to
monotherapy has become particularly common for antiepileptic medications.
111
Case Study: Topamax
When its indications were expanded in June 2005 to include a usage extension for
monotherapy, Johnson & Johnson’s Topamax became the latest of a group of second
generation epilepsy drugs whose usage was extended by the FDA.
Second generation antiepileptic drugs include 9 products introduced in the US since

1990: MedPointe’s Felbatol, Cephalon’s Gabitril, UCB Pharma’s Keppra,
GlaxoSmithKline’s Lamictin, Pfizer’s Lyrica, Pfizer’s Neurontin, Johnson & Johnson’s
Topamax, Novartis’s Trileptal, and Eisai’s Zonegran. These were introduced as a
gentler alternative to first generation products, whose usage was often complicated by
complex pharmacokinetics and significant effects on liver enzymes. Because first and
second generation products were often not effective for all epilepsy types and not able
to effectively control seizures in a large proportion of patients, both types of products
were initially utilized in combination therapy programs.
However, several second generation products were found to have a broader spectrum of
activity along with improved side effect profiles. In December 2001, Novartis received
an approvable letter from the US FDA to market Trileptal as monotherapy in the
treatment of partial seizures; in January 2004, GlaxoSmithKline received a similar
approval for its Lamictin. This led to the Therapeutics and Technology Assessment
Subcommittee and the Quality Standards Subcommittee of the American Academy of
Neurology and the American Epilepsy Society issuing an evidence-based guideline for
the usage of second-generation antiepileptic drugs as monotherapy in newly diagnosed
epilepsy later in 2004.
While Johnson & Johnson had submitted data to the FDA in late 2002 to support the
use of Topamax as a standalone treatment for epilepsy, the application was not
approved until June 2005, by which time more than five dozen countries had already
approved the usage of Topamax as monotherapy. While the data was extensive,
describing clinical trials in nearly 500 volunteers, the delay appears to have been
related, at least in part, to safety concerns about the drug. In 2001, Topamax was linked
112
with a relatively high number of cases of an ocular syndrome characterized by acute
myopia and secondary angle closure glaucoma.
In the US, Topamax was first approved in 1996 as adjunctive treatment for adults with
partial-onset seizures. In 1999, it was approved to treat partial-onset seizures as
adjunctive therapy in children as young as two years old. Later that year, Topamax was
approved as add-on treatment for generalized seizures in both adults and children. In
2001, the treatment of seizures associated with Lennox-Gastaut Syndrome was added
to its approved indications and in 2004, Topamax was approved for treatment of
migraines. These indication expansions have led to continuously rising sales for
Topamax, with the most recent usage extension for monotherapy providing similar
gains. In 2005, Johnson & Johnson reported sales of $1.7bn for Topamax; these rose by
17.6% to $2.0bn in 2006 for a gain in line with the past several years’ growth.
Other manufacturers of antiepileptic drugs are also attempting to expand their

indications to monotherapy, with UCB Pharma announcing in July 2006 that the
European Medicines Agency (EMEA) issued a positive opinion to approve marketing
authorization of Keppra as monotherapy in the treatment of partial onset seizures with
or without secondary generalization in patients from 16 years of age with newly
diagnosed epilepsy. This approval likely foreshadows a similar usage extension for
Keppra in the US.
Combination therapy extensions
Although usage extensions from monotherapy to combination therapy are less

common, they can nonetheless be a useful way to continue to broaden a medication’s
utility and highlight certain special conditions under which the product may be
administered. This is particularly true when the other medications with which the drug
is to be used are extremely popular.
For example, in December 2003, the US FDA approved Novartis’s Starlix for use in
combination with two other diabetes drugs (“thiazolidinediones” or “TZDs”) for
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patients in whom the TZDs had not proven optimally effective. While Starlix had
previously been indicated as monotherapy, it was not among the more commonly used
diabetes drugs as it tends to lose effectiveness for patients within 6 years of beginning
use; GlaxoSmithKline’s Avandia, however, posted sales of $1.8bn and Takeda’s Actos
reached $1.3bn in 2003. Most users of Avandia and Actos experience acceptable
results, but the expanded indication makes Starlix available to the small proportion but
relatively large number of Avandia and Actos patients who do not respond adequately
to TZD monotherapy. However, it should be noted that by 2005, Starlix was not
included among Novartis’s 20 top brands, indicating that while the usage extension
may have increased sales somewhat, this gain has not been substantial. In December
2006, the FDA granted a similar approval to Byetta, the first in a new class of drugs for
the treatment of type 2 diabetes called incretin mimetics, which was developed by
Amylin Pharmaceuticals and Eli Lilly; and in February 2007, Merck filed an
application with the FDA seeking to extend the usage of its new diabetes drug, Januvia,
to include usage with two more popular diabetes therapies. While Januvia was initially
approved for use as monotherapy and as add-on therapy to either of two other types of
oral diabetes medications, metformin or thiazolidinediones (TZDs), the new
applications seek approval to utilize Januvia in combination with metformin as initial
therapy, as add-on therapy to a sulfonylurea when the single agent alone does not
provide adequate glycemic control and as add-on therapy to the combination of a
sulfonylurea plus metformin.
In some cases, combination therapy can provide medical benefits that enhance the
performance of certain products, such as with TAP Pharmaceutical’s Prevacid
NapraPAC. In November 2003, TAP received FDA approval to market a combination
of its Prevacid acid suppressor along with Naprosyn naproxen tablets. Each NapraPAC
package contains pills for 7 days of treatment (one Prevacid capsule and two Naprosyn
tablets per day), and is indicated for reducing the risk of NSAID-associated gastric
ulcers in patients with a history of gastric ulcers that require the use of a non-steroidal
anti-inflammatory drug (NSAID) for treatment of rheumatoid arthritis, osteoarthritis
and ankylosing spondylitis. While naproxen effectively addresses the pain and
inflammation of these conditions, it has also been associated with the development of
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ulcers – which Prevacid can help prevent. NapraPAC was the second successful
combination product for Prevacid, with the first, Prevpac, launched in 1999 to both
cure and prevent ulcers caused by Helicobacter pylori bacteria; Prevpac contains
Prevacid capsules as well as amoxicillin and clarithromycin antibiotic pills.
Other usage extensions
Other types of usage extensions are varied, and include removing restrictions related to
usage of a drug only after other therapies had failed, dosing frequency variations or
administration in conjunction with food intake. Some of these extensions can have a
greater impact on a drug’s usage than others. For example, removing restrictions that a
drug must be taken with food, as occurred with Reliant Pharmaceuticals’ indication
expansion of Antara in November 2005, offers greater convenience to patients but
would not be expected to result in significantly increased usage since prescribing
decisions are not typically made on the basis of concurrent food intake requirements.
On the other hand, Novartis’s Diovan was initially approved in December 1996 only
for the relatively small group of patients intolerant of angiotensin-converting enzyme
(ACE) inhibitors; broadening the drug’s usage in August 2005 to all heart failure
patients represents a significant expansion of its indications.
Less common types of usage extensions pertain to the characteristics of certain types of
medications. For example, in February 2007, Bayer’s Kogenate was approved in the
EU for continuous infusion in hemophilia A patients undergoing major surgery. Like
other recombinant Factor VIII products, Kogenate was initially approved for bolus
infusion; however, this required regular monitoring and control of hemostatic factor
levels to control bleeding and complications. Continuous infusion eliminates these
problems and reduces surgical risk.
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When a usage extension is appropriate
Assuming that safety and efficacy can be demonstrated in the extended usage, this type
of indication expansion strategy can be appropriate for a variety of products including
those that:
Are used in combination with other products to address chronic conditions;
Were initially approved as monotherapy but may offer better performance in

combination with other products;
Were initially approved as second line therapy;
May be used intermittently rather than regularly;
Were initially approved for short term use;
May be administered less frequently.
Chronic conditions such as diabetes, epilepsy and HIV infection require lifetime usage
of medications to control symptoms. Combination therapy for these cases is associated
with lower compliance as well as higher costs and greater adverse reactions than
monotherapy; therefore, drugs whose usage can be expanded from combination therapy
to monotherapy offer a considerable benefit to the patient. As a simpler and less
expensive therapy, usage of these products is often higher than usage of combination
products so the manufacturer also benefits.
Occasionally, an expansion from monotherapy to combination therapy can be

beneficial when the drug’s performance is found to improve with concurrent usage of a
complimentary product. Although this is not as common as a shift from combination
therapy to monotherapy, an improvement in results can lead to expanded usage of the
drug.
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Drugs that were initially approved as second line therapy, after or instead of usage of a
first line product, are particularly appropriate for usage extension if they can be shown
to offer comparable performance to a first line product. This type of indication
expansion often occurs with new types of drugs and molecules with uneven safety
records.
To a more limited extent, usage extensions that allow more flexible dosing may be an
appropriate means to enable a clearance for other indications. For example,
GlaxoSmithKline’s Flonase was originally approved for the treatment of seasonal and
perennial rhinitis in December 1990. Although allergy medications are a large market,
with approximately half the US population suffering from allergies at some point in
their lives, the market has also become congested with several blockbusters and
Flonase faced US patent expiration in 2004. GlaxoSmithKline therefore sought an
additional approval for a related indication which affects a large number of consumers,
treatment of nonallergic nasal symptoms. However, because this condition is
intermittent rather than chronic, the company also sought an expansion of Flonase’s
usage conditions from daily use to usage on an as-needed basis. In May 2002, the FDA
approved Flonase for both treatment of nonallergic nasal symptoms and as-needed
usage. The drug’s marketing materials, though, continued to state that Flonase provided
best results when used daily.
As with other types of indication expansions, the factors that make pursuit of an
indication extension attractive in one region are often present in others. Because of this,
it is common for manufacturers to pursue similar indication extensions in many
different jurisdictions. However, relatively few manufacturers are currently pursing
usage extensions for commercialized products due to the greater benefits afforded by
some other indication expansion strategies. Selected initiatives for drugs
commercialized in the US are shown in Table 5.14.
Usage of certain drugs may also be extended from short term to long term use. This
often occurs for new classes of drugs and/or drugs that must be taken chronically, as
long term safety has not been demonstrated. Proton pump inhibitors, like Wyeth’s
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Protonix, are one such group. While the drugs were developed to treat heartburn and
ulcers, they were initially approved only for short term therapy of 16 weeks. Since
many patients with gastroesophageal reflux disease (GERD) are chronic sufferers who
require long term treatment, manufacturers subsequently obtained usage extensions to
enable longer term therapy.
Table 5.14: Selected usage extension initiatives for US commercialized drugs,

2007
Company Drug Original indication Expanded indication/s Type
GlaxoSmithKline Hycamtin Metastatic carcinoma of the First line therapy for O

ovary after failure of initial or ovarian cancer
subsequent therapy
Merck Januvia Monotherapy for treatment of Initial therapy with C
type 2 diabetes; add-on metformin for treatment of
therapy with metformin type 2 diabetes
Merck Januvia Monotherapy for treatment of Add-on therapy with C
type 2 diabetes sulfonylurea for treatment
of type 2 diabetes
Roche Rituxan Treatment of indolent and First-line therapy and O
aggressive Non-Hodgkin’s maintenance therapy for
lymphoma indolent lymphoma
UCB Pharma Keppra Combination therapy for Monotherapy for epilepsy M
Epilepsy
M= Monotherapy; C= Combination therapy; O= Other
Other medications may be found to be equally effective even when administered less
often, although this is a less common form of usage extension. One recent example is
Roche’s NeoRecormon, whose dosing was reduced in the EU in January 2007 from a
thrice-weekly subcutaneous injection to once weekly injections. NeoRecormon was
first approved in the early 1990s in dosages of 1,000 to 10,000 IU for the treatment of
anemia following chemotherapy, a condition that affects the vast majority of
chemotherapy patients. Following the BRAVE (BReast cancer - Anaemia and the
Value of Erythropoietin) study, which was conducted in women with metastatic breast
cancer receiving chemotherapy and the NAUTICA study conducted in patients with a
wide range of cancer types also receiving chemotherapy, NeoRecormon’s indications
were expanded to include single weekly dosages of 30,000 IU.
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Objectives of usage extension
Unlike other types of indication expansions that provide market exclusivity extensions,
such as new application extensions and pediatric extensions, usage extensions offer no
means for a drug maker to extend an exclusivity period. This is because on average
they do not significantly broaden a drug’s utility beyond its original indications – even
though sales may rise from the removal of certain restrictions. Because regulators do
not offer exclusivity incentives for manufacturers to test for usage extensions, the main
objectives of this type of indication expansion revolve around making the drug more
appealing for current patients and increasing the size of the patient base by removing
cumbersome restrictions on usage.
Benefits of usage extension
Usage extensions typically offer two key benefits, both of which may broaden the
population of users for a drug. First, they may make a product more convenient to take,
such as by eliminating the requirement to take other medications or food concurrently.
They may also broaden the population of patients who may use the drug, typically by
extending a drug’s usage from second line to first line therapy. This second benefit is
the most important for manufacturers, as it most directly impacts drug revenues by
increasing usage.
A further benefit of usage extension, when the potential size of the first line patient
population is large, is its relatively low cost. Although drug developers must invest in
additional clinical research to support an application for a usage extension, this
investment is typically lower than for other types of indication expansion such as new
application extensions and pediatric extensions, which can require large study groups
and multiple trials. Usage extensions, however, often can be obtained from more
limited studies in smaller groups of patients.
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Because usage extensions often accompany other types of indication expansions for a
particular product – some of which may more significantly broaden the drug’s
applications – it is often not possible to isolate the economic effect on a drug’s
revenues of usage extensions alone. However, occasionally an important usage
extension will occur apart from other indication extensions; in these cases, such as the
usage extension of Novartis’s Femara in December 2005, it becomes easier to quantify
the benefit of these indication expansions to the drug’s manufacturer.
Case study: Femara
Femara’s success reflects its developer’s ongoing ability to obtain usage extensions and
other indication expansions for the drug.
An aromatase inhibitor, Femara was first approved by the FDA in July 1997 for the
relatively narrow indication of treatment of advanced breast cancer in postmenopausal
women with disease progression following antiestrogen therapy. In January 2001, this
approval was upgraded through the drug’s first usage extension, following FDA’s
acceptance of Novartis’s supplemental New Drug Application (sNDA) to first-line
treatment of postmenopausal women with hormone receptor positive or hormone
receptor unknown locally advanced or metastatic breast cancer. Although the removal
of the requirement that patients fail antiestrogen therapy prior to treatment expanded
the drug’s potential base of users, the indication nonetheless was restricted to women
with advanced breast cancer; since the majority of breast cancer cases are diagnosed at
an earlier stage, Femara’s sales in its first years on the market remained low while
Novartis sought to expand this indication to early stage patients.
In October 2004, the FDA expanded Femara’s indications to the full range of breast
cancer patients, grating accelerated approval for the drug in the adjuvant treatment of
early breast cancer in postmenopausal women who had received five years of
tamoxifen therapy. Tamoxifen is a mature, genericized product that had become the
standard of care in breast cancer treatment. A further approval in December 2005,
mirroring Femara’s 2001 usage extension, allowed Femara to be used in the treatment
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of postmenopausal women with hormone receptor positive early breast cancer
regardless of their prior usage of other breast cancer drugs. The approval was granted
after Femara was found in an 8,000-patient clinical trial to be more effective than
tamoxifen in preventing disease recurrence. This builds on a similar approval earlier in
2005 in the UK and similar applications pending in the EU, Japan and other countries.
This second usage extension resulted in an immediate revenue gain for Femara. In
2006, Novartis reported total worldwide sales for Femara of $719m, up 34.1% from
$536m in 2005.
This strategy of continually expanding a drug’s indications through usage extensions

works particularly well for anti-cancer drugs such as Femara, as many new products
belong to classes with limited safety histories which therefore tend to receive
incrementally broader indications as their safety is validated over time. For example,
Johnson & Johnson’s Velcade was initially approved in the US in May 2003 for the
treatment of multiple myeloma in patients who have not responded to other treatments.
Velcade was the first in a class of anticancer medicines called proteasome inhibitors. In
May 2004, the EU approved the use of Velcade for the treatment of patients with
multiple myeloma who have received at least two prior therapies and have
demonstrated disease progression on the last treatment cycle. Canada then approved the
drug in January 2005 for the treatment of patients with multiple myeloma who have
relapsed following front-line therapy and are refractory to their most recent therapy,
and again in May 2006 the treatment of multiple myeloma in patients who have
received at least one prior therapy and who have already undergone or are unsuitable
for stem cell transplantation. Johnson & Johnson and Millenium Pharmaceuticals, its
development partner, have are continuing to investigate the full potential of Velcade in
both hematologic and solid tumors and have more than six dozen ongoing or planned
clinical trials which could further extend the drug’s usage indications for usage.
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Limitations of usage extension
The most significant limitation of usage extensions, compared with other types of
indication expansion, relates to market exclusivity. Unlike other indication expansion
strategies, such as new application extensions and pediatric extensions, usage
extensions do not typically extend a drug’s market exclusivity. Therefore, they cannot
help delay a decline in drug revenues caused by loss of market exclusivity and resulting
generic competition.
To a certain extent, the competitive landscape also plays a role. For example, some
drugs are initially approved for use under restricted conditions such as treatment in
combination with more established products or second line therapy. This often occurs
for products in new classes of drugs and those with somewhat inconsistent safety
profiles, particularly when more established products are already available to address
the condition. Without a clear public health need for a product, regulators often err on
the side of caution by initially limiting a new product’s scope of usage.
However, the most significant limitations relate to the drug’s own pharmacological
properties and its ability to be safely and effectively utilized in a broader range of
administrative formats. Products whose safety and efficacy cannot be established under
more the desired usage conditions cannot receive usage extensions. In some cases, this
can represent a significant blow to a manufacturer’s development pipeline, as when
Pfizer’s new cholesterol reducer, torcetrapib, was found to raise blood pressure and not
therefore, be able to be used in combination with the company’s blockbuster Lipitor.
Case study: torcetrapib
In December 2006, Pfizer discontinued development of its next generation cholesterol

reducer, torcetrapib, an event that was described in the press as a “tremendous blow” to
the company, since Pfizer had been developing the product as a means to mitigate sales
declines it would face when its blockbuster, Lipitor, lost patent protection in 2010.
Pfizer’s strategy with torcetrapib was unique, as it was planning to introduce the drug
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for use in combination with Lipitor to reduce the formation of plaque in the arteries.
This would have buoyed Lipitor’s $12bn sales, mitigating an immediate decline from
generic competition since generic versions of atorvastatin would not have been able to
market for this combined indication. This usage extension strategy represented the
latest in a long line of indication expansions that Pfizer had obtained for Lipitor; since
the drug was first approved in 1997, Pfizer had obtained nearly a dozen approvals for
related indications as well as a pediatric extension.
Pfizer began development of torcetrapib in 1990, investigating it for treatment of

hypercholesterolemia and prevention of cardiovascular disease. Torcetrapib acts by
inhibiting cholesterylester transfer protein (CETP), which is an important molecule in
the liver that transfers cholesterol and regulates cholesterol size; this results in higher
HDL cholesterol levels ("good" cholesterol). Lipitor works in a complementary
manner, by lowering LDL cholesterol levels, suggesting that the two drugs might be
used in combination. Over the course of Pfizer’s $800m development program,
torcetrapib demonstrated excellent results, with one study published in the New
England Journal of Medicine (NEJM 350:1505-1515), reporting an increase in HDL
levels of 61% and a decrease in LDL levels when used in combination with a statin
such as Lipitor. This compares with a rise in HDL of just 46% when torcetrapib was
used without a statin.
At the same time, however, torcetrapib was also linked to an increase in blood pressure.
Early reports measured this rise at 2 to 3 mm Hg, but later data from the drug’s Phase
III ILLUMINATE clinical trials indicated a higher increase of 3 to 4 mm Hg.
ILLUMINATE evaluated the effect of torcetrapib/Lipitor vs Lipitor alone on the
occurrence of major cardiovascular events in 15,000 subjects with coronary heart
disease or risk equivalents. In that trial, 82 patients taking the combination of
torcetrapib and Lipitor died, compared with 51 patient deaths in the Lipitor-alone arm,
representing a 61% increase in mortality from usage of torcetrapib. After these findings
were identified, the study’s data safety monitoring board (DSMB) recommended the
trial be halted due to an "imbalance of mortality and cardiovascular events."
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It should be noted, however, that public opinion also played a role in the termination of
Pfizer’s strategy to include Lipitor in a new combination therapy. Several months prior
to the discontinuation of torcetrapib, Pfizer had explored the notion of launching
torcetrapib as a stand-alone therapy instead of a combination product with Lipitor. This
occurred following media and physician criticism that the drug was being developed
primarily as a business strategy to protect against sales declines from the genericization
of Lipitor, a concept that many healthcare providers believe conflicts with their
priorities of putting patients first. A stand alone version of torcetrapib, however, would
have allowed physicians to recommend usage of the drug either on its own or in
combination with a statin of their choice for patients intolerant of Lipitor. Since the
development of torcetrapib was terminated, however, what would actually have
happened is unknown.
Conclusion
Usage extension is used infrequently to expand the conditions under which a drug may
be used. Although it is used less frequently than other indication expansion strategies,
usage extension can be utilized to broaden a drug’s patient base and revenues,
particularly when the drug was initially approved as a second line therapy. More so
than other types of indication expansion, usage extension is highly dependent upon the
pharmacological properties of a drug. The competitive landscape also plays a role for
products whose usage is being extended from monotherapy to combination therapy or
vice versa.
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CHAPTER 6
Comparison of indication
expansion strategies
125
Chapter 6 Comparison of indication
expansion strategies
Summary
Each indication expansion strategy offers distinct advantages and disadvantages.
Extension to related indications and extension to new applications are the most
appropriate strategies to address declining drug revenues as they provide an
opportunity to significantly broaden the drug’s usage and/or extend its period of
market exclusivity.
Pediatric extensions can also be used to provide some additional market

exclusivity.
Extension of usage conditions is most appropriate for special situation products,

such as drugs initially approved as a second-line therapy or as combination
therapy.
Overall, an extension to new applications offers the greatest level of benefit,

followed by extension to related indications and pediatric & special population
extensions, with extension of usage conditions offering the lowest level of
benefit.
An extension to new therapeutic applications offers the longest market

exclusivity extension, which is often more important to manufacturers than
potential sales in the new indication.
At the same time, an extension to new applications is challenged by the greatest

limitations, followed by usage extensions and extensions to related indications;
pediatric & special population extensions offer the lowest level of limitations.
An extension to new applications is highly dependent upon the drug’s

pharmacology and whether or the not the product can be demonstrated safe and
effective in the new therapeutic area.
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Introduction
Each of the indication expansion strategies profiled in this report offers distinct
advantages and disadvantages, and therefore all are not appropriate for a given
pharmaceutical product in a particular situation. Nonetheless, since indication
expansions are considerably more cost effective than developing entirely new
molecules, it is common for drug developers to explore as many potential indication
expansions as possible for each commercialized product in an effort to maximize the
return on their initial investment.
Conditions under which each indication expansion

strategy is appropriate
The conditions under which different indication expansion strategies are appropriate
vary, as shown in Figure 6.7, with some strategies broadly applicable under a variety of
circumstances and others more appropriate for just a few scenarios. Moreover, some of
these conditions, such as declining drug revenues, are extremely important to
manufacturers whereas others, such as off-label usage in children, are relatively less
important from a financial perspective.
Overall, extension to related indications and extension to new applications are the most
appropriate strategies to address the most important problem facing a drug – namely,
declining revenues – as they provide an opportunity to significantly broaden the drug’s
usage and/or extend its period of market exclusivity.
Pediatric and special population extensions are most appropriate for products being
used off-label by these groups, but can also be used to provide some additional market
exclusivity. To a considerably lesser extent than extension to related indications and
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extension to new applications, pediatric extensions may also be used to address low or
declining revenues by providing a new (albeit small) market of potential users.
Extension of usage conditions is most appropriate for special situation products, such
as drugs initially approved as a second-line therapy or as part of combination therapy.
Figure 6.7: Comparative appropriateness of indication expansion strategies
Strategy
Drug Characteristic Extension to Extension to Pediatric & Extension of

Related New Special Usage
Indications Applications Population Conditions
Extensions
Facing Exclusivity
Loss/Genericization
Facing Declining
Revenues
Initially Approved as
Second -Line Therapy
Initially Approved in
Narrow Applicat ions
Initially Approved as
Part of Combination
Therapy
Addresses a Condition
With Several Variants or
Severity Levels
May be Used in Both
Treatment & Prevention
Used Off -Label in

Children or Others
Overall Breadth of
Appropriateness
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Comparative benefits of each indication expansion
strategy
The relative benefits offered by the four main indication expansion strategies vary
widely, as shown in Figure 6.8. Overall, an extension to new applications offers the
greatest level of benefit, followed by extension to related indications and pediatric &
special population extensions, with extension of usage conditions offering the lowest
level of benefit.
An extension to new therapeutic applications offers the longest market exclusivity

extension, which is often more important to manufacturers than potential sales in the
new indication. This is because, at three years in the US, such extensions can result in
billions of dollars in sales for blockbusters otherwise subject to competition from low
cost generics. When new applications are large, these revenues can also significantly
enhance sales of a product, particularly if competition in the new application is limited.
Because even discarded product candidates can be re-evaluated for efficacy in a new
therapeutic area, many drug developers have begun combing their product libraries in a
process called “repositioning”.
Extension to related indications offers a less significant overall benefit than extension
to new applications since these types of indication expansions result less frequently in
market exclusivity extensions. However, they are generally less expensive and faster to
implement. Furthermore, while a single related indication extension may not provide a
substantial benefit to a product, a series of such expansions may have a very profound
result and for this reason, many manufacturers of drugs with somewhat narrow
indications continue to obtain related indication extensions to expand the product’s
utility.
Similarly, pediatric and special population extensions offer a moderate overall level of
benefit, most of which is derived from their ability to generate an additional six months
of market exclusivity for the product. This benefit was available in both the US and
Europe as of early 2007. However, the US Congress is scheduled to review pediatric
129
exclusivity legislation at the end of the year and there is a possibility that the law will
not be renewed. If this occurs, the benefit of pediatric extensions, at least in the US,
would decline significantly.
Figure 6.8: Comparative benefits of indication expansion strategies
Strategy
Benefit Extension to Extension to Pediatric & Extension of

Indications Applications Population Conditions
Extensions
Extends Market
Exclusivity
Large Potential New

Market of Users
Associated with
Higher Revenues
Low Cost of
Development
Short Development
T ime
Applicable to
Discarded Product
Candidates
Makes Product Easier
to Use
Overall Level of
Benefit
Extensions of usage conditions offers the lowest level of benefit of the four main
indication expansion strategies, as they are not typically associated with either an
extension of market exclusivity or the ability of the drug to be utilized by a large new
group of patients. Although some usage extensions do result in higher drug revenues,
such as those expanding usage to first-line therapy from second-line therapy, these
130
cases tend to be the exceptions as most usage extensions provide only incremental
improvements that do not attract significant numbers of new patients to the drug.
Comparative limitations of each indication expansion

strategy
The relative limitations of the four main indication expansion strategies also vary
widely, as shown in Figure 6.9. Overall, an extension to new applications is challenged
by the greatest limitations, followed by usage extensions and extensions to related
indications; pediatric & special population extensions offer the lowest level of
limitations.
An extension to new applications is highly dependent upon the drug’s pharmacology

and whether or the not the product can be demonstrated safe and effective in the new
therapeutic area. Unlike pediatric exclusivity, which is granted upon provision of
pediatric testing data regardless of whether or not the drug is approved for use in
children, a new application extension will only trigger additional market exclusivity if
the drug is approved for use in the new indication. Furthermore, while this market
exclusivity is often the main goal of a new application extension, revenues from sales
in the new application can often be substantial. Therefore, market forces such as the
availability of low-cost generics or strong branded competition in the new application
can have a significant impact upon a product’s success.
Usage extensions are somewhat less challenged by limitations; since they typically do
not receive exclusivity extensions, they are affected mainly by market forces.
Similarly, extensions to related indications often do not receive market exclusivity
extensions so they are also most influenced by market forces. However, extensions to
related indications are somewhat less dependent upon a drug’s pharmacology than
usage extensions since the indication expansion is typically more closely connected to
the drug’s original indication.
131
Figure 6.9: Comparative limitations of indication expansion strategies
Strategy
Limitation Extension to Extension to Pediatric & Extension of

Indications Applications Populatio n Conditions
Extensions
Revenues Vary With
Size of Potential Market
Affected by Availability
of Generics
Affected by Strong
Branded Competition
Dependent Upon Drug’s

Pharmacology
Overall Level of
Limitation
Pediatric and special population extensions offer the lowest limitations of the four key
indication expansion strategies. The pediatric market is known to be small, and in fact,
many pediatric studies are conducted without an expectation of commercialization
since pediatric exclusivity is granted in exchange for the submission of pediatric testing
data, regardless of whether the drug is approved for use in children. Therefore,
pediatric extensions are pursued mainly to obtain additional exclusivity for a product.
Because of this, market forces are less important for pediatric extensions than they are
for new application extensions or extensions to related indications and success of a
pediatric extension is not based upon high revenues from use of the drug in children.
On a relative basis, extension to new applications offers the greatest benefit but also
largest limitations, as shown in Figure 6.10. At the other extreme, extension of usage
conditions offers considerably lower limitations but also fewer benefits. Extension to
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related indications offers a balance of benefits and limitations, while pediatric
extensions generally offer greater benefits than limitations.
Figure 6.10: Benefits vs. limitations for indication expansion strategies
High Extension
to New
Applications
Benefits
Pediatric &
Special Extension to
Population Related
Extensions Indications
Extension of
Usage
Conditions
Low
Low High
Limitations
Combining indication expansion strategies
Drug makers often employ a combination of indication expansion strategies to continue

to expand a product’s reach. Different indication expansions may have different
objectives, with some designed to extend exclusivity and others intended to broaden the
drug’s market to new therapeutic applications or patient populations. These expansions
often occur throughout a drug’s lifecycle, as illustrated by Merck’s ongoing expansion
of Singulair’s indications. For some products, particularly oncology medications like
Sanofi-Aventis’s Taxotere, these expansions may be quite numerous and involve a
broad range of disease variants and usage conditions.
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Case Study: Singulair
Merck has been able to steadily build sales of its Singulair by proactively expanding
the product’s indications early in its lifecycle.
Singulair was approved by the FDA in February 1998 for the prophylaxis and chronic
treatment of asthma in adults and children 6 years of age and older. This was virtually
identical to the claims allowed for competing products, such as AstraZeneca’s
Accolate.
In mid 2002, Merck submitted an application for the use of Singulair in allergic rhinitis
(hay fever), in an attempt to gain entry to the then $6bn US market for allergy
medications, after attempts to combine Singulair with Schering-Plough’s blockbuster
allergy drug Claritin failed.
Singulair operates with a different mechanism of action from the steroids and sedating
antihistamines for the treatment of this condition, and could offer relief of symptoms
without drowsiness, thereby providing it with a competitive advantage over first
generation Rx products and many over-the-counter allergy remedies. The allergy
indication may also provide Singulair with a competitive advantage over other asthma
medications, for asthma patients who also suffer from allergies. FDA approval for
treating outdoor allergies (seasonal allergic rhinitis or “hay fever”) was obtained in
January 2003 and in August 2005, Singulair was cleared to market for treatment of
indoor allergies (perennial allergic rhinitis or allergy to dust mites, pet dander, and/or
molds). In December of the year, Singulair was approved by the FDA for the
prevention of exercise-induced bronchospasm (EIB) in patients 15 years of age or
older. Although international approvals for Singulair have lagged US approvals, Merck
has executed several successful new application extensions overseas, including a
September 2006 clearance from Health Canada to market Singulair for the relief of
symptoms of seasonal allergic rhinitis in patients 15 years and older and European
approval to market Singulair to treat symptoms of seasonal allergic rhinitis in asthmatic
patients in January 2005.
134
Merck continues to explore related indication extensions and new application
extensions for Singulair. In the second half of 2006, Merck filed an application with the
FDA to market Singulair for acute asthma and in 2008, the company plans to seek
approval to market the drug for respiratory syncytial viral bronchiolitis.
At the same time, Merck has continued to extend Singulair’s pediatric usage. In March
2000, the FDA extended Singulair’s asthma indication to children as young as two,
making the drug the first asthma controller therapy in more than 15 years to be
approved for children this young and providing an additional six months of market
exclusivity for the drug. In September 2003, Merck introduced a new oral granule
formulation of Singulair, offering convenient once-a-day dosing to children as young
as 12 months and demonstrating the company’s interest not only in pediatric
exclusivity but in providing products to the relatively large pediatric asthma market.
As the drug’s indications have expanded, worldwide sales of Singulair have continued
to rise, growing from $1.5bn in 2002 to an estimated $3.5bn in 2006. As shown by the
steeper slope of the allergy growth line compared with the asthma growth line in Figure
6.11, Singulair has demonstrated considerably stronger gains beginning in 2003, when
it received its first approval for treatment of allergies. This was an important approval,
since the allergy drug market is comparable in size to the large asthma medication
market. Sales have also likely benefited from related indication extensions and a
pediatric extension.
135
Figure 6.11: Singulair indications and revenues, 2002 – 2006
4.0
3.5
Growth after
U.S. outdoor
Global Sales of Singulair in $
3.0
allergy approval
2.5
2.0
Growth of usage
1.5 for asthma
1.0
0.5
0.0
1998 1999 2000 2001 2002 2003 2004 2005 2006
U.S. approval U.S. approval

for pediatric for indoor
usage allergies, EIB
Source: Merck public filings Business Insights Ltd
Case Study: Taxotere
Since Taxotere’s launch in 1995, Sanofi-Aventis has consistently expanded the cancer
drug’s indications, utilizing a combination of indication extensions to high-incidence
disease variants and usage extensions that significantly expanded the drug’s utility.
This has resulted in strong growth for Taxotere, with 2006 sales reaching €1.7bn or
$2.2bn.
A member of the taxoid class of drugs, Taxotere works by freezing cells’ internal
skeleton, which inhibits cell division and thereby prevents the uncontrolled cellular
proliferation of cancerous cells. This mechanism of action is widely applicable to a
136
large variety of cancers at varying stages. Although Taxotere’s original approval was
for a relatively narrow indication, as shown in Table 6.15, as a second-line therapy for
breast cancer, subsequent indication expansions in 1999 and 2002 considerably
broadened the population of patients approved to use the drug with an indication
extension to second-line therapy in locally advanced or metastatic non-small cell lung
cancer (NSCLC) then a usage extension to first-line therapy in NSCLC. These
expansions significantly boosted sales, as did subsequent indication expansions to
high-incidence cancers such as prostate cancer in 2004 and stomach cancer in 2006. It
is noteworthy that Sanofi-Aventis has generally avoided lower-incidence disease
variants such as lymphoma and cancer of the liver, pancreas and esophagus.
Sanofi-Aventis continues to investigate indication expansions for Taxotere, with

approximately 200 studies ongoing as of early 2007. These include indication
extensions to additional types of cancer as well as usage extensions to different stages
of each disease. Of particular note are usage extensions that would allow Taxotere to be
administered in combination with other oncology medications to provide more
efficacious and/or more tolerable treatment. These include combined administration
with:
Eli Lilly’s Gemzar, to provide better tolerability in the treatment of advanced

NSCLC cancer;
Sanofi-Aventis’s Eloxin, to provide better survival and greater tolerability in the

treatment of gastric cancer;
Carboplatin and/or cyclophosphamide to inhibit cardiac toxicity of chemotherapy in

the treatment of advanced ovarian and other cancers;
Hormone therapy to increase effectiveness in the treatment of early, hormone-

sensitive stages of prostate cancer.
Although Sanofi-Aventis has not yet pursued a pediatric extension for Taxotere, with
the drug currently approved only in adults aged 16 and older, it has received a 3 year
137
exclusivity extension in the US as a result of additional clinical testing required to
validate several indication expansions. This extended Taxotere’s US patent protection
from July 2007 to May 2010.
Table 6.15: Taxotere indication expansions, 1999 - 2006
Indication Type of Annual Regional Approval

Indication Global US Europe
Expansion Incidence
With cisplatin and 5-fluorouracil for the Indication extension 150,000 Oct 2006 Approval
treatment of inoperable locally advanced pending
squamous cell carcinoma of the head and
neck (SCCHN)
With cisplatin and 5-fluorouracil for the Indication extension 940,000 Mar 2006 Mar 2006
treatment of metastatic stomach cancer
Androgen-independent (hormone refract- Indication extension 680,000 May 2004 Nov 2004
tory) metastatic prostate cancer in men
With doxorubicin and cyclophosphamide, Indication extension 800,000 Aug 2004 Jan 2005
for the adjuvant treatment of operable
node-positive breast cancer
With Herceptin for the treatment of Usage extension 250,000 Approval Jan 2005
metastatic breast cancer whose tumors pending
over-express the Her2 gene
First-line therapy with cisplatin for Usage extension 800,000 Dec 2002 Sep 2002
unresectable, locally advanced or
metastatic NSCLC
Second-line use in locally advanced or Indication extension 200,000 Dec 1999 Oct 1999
metastatic non-small cell lung cancer
(NSCLC)
Locally advanced or metastatic breast Original approval 250,000 May 1996 Oct 1995
cancer after failure of prior anthracycline
chemotherapy
138
Conclusion
Each of the four main types of indication expansion offers benefits and limitations,
with none generally representing a single, one-size-fits all strategy for increasing
product sales. The most successful drugs are those whose indications have been
consistently expanded over their lifecycle. While this may involve a series of one type
of indication expansion, such as extension to a wide variety of disease variants, most
developers utilize a combination of different strategies that leverages the benefits of
each. This is often necessary due to usage restrictions initially placed upon new
medications and/or competitive conditions in the marketplace.
139
140
CHAPTER 7
Appendix
141
Chapter 7 Appendix
Research methodology
Information in this report was compiled from a variety of primary and secondary
sources. This includes interviews with industry experts, comprising both regulatory
officials and pharmaceutical company executives, data compiled by Business Insights,
as well as a broad range of secondary data obtained from:
Public company SEC filings, press releases and websites;
Articles in US and international trade journals;
Articles in US and international magazines, newspapers and other consumer

publications;
Data and reports from state and federal regulatory agencies.
142
Index
Abbott, 22, 53, 69 Europe, 11, 13, 19, 27, 32, 42, 43, 45, 48, 53,
58, 59, 63, 70, 74, 77, 78, 89, 101, 103, 106,
Acomplia, 70, 71, 72 131
Actonel, 94 Femara, 121, 122
Allergan, 26, 79, 80, 81, 82 Flonase, 118
Ambien, 99 Fosamax, 94
ANDA, 42, 43, 63, 105 France, 36, 37, 42, 80
Antara, 116 Gemzar, 75, 138
Aricept, 52, 53 Gene Logic, 76
Aspreva, 26 Germany, 36, 61, 70
Avandia, 112, 115 GlaxoSmithKline, 50, 56, 61, 67, 93, 112, 113,
118
Berlex, 73
Humira, 22, 53
Boehringer Ingelheim, 67
Hycamtin, 56, 57
Botox, 26, 79, 80, 81, 82
Hyzaar, 54
Bristol-Myers Squibb, 39, 58, 61, 97
Italy, 37, 81
Bupropion, 70
Januvia, 115
Camptosar, 57
Johnson & Johnson, 24, 26, 74, 98, 113, 114,
Cancidas, 60 122
Celebrex, 29, 96 Keppra, 113, 114
CellCept, 27 Ketek, 45
Combination therapy, 111, 114, 117 Lipitor, 40, 41, 104, 123, 124, 125
Depakote ER, 69 Lyrica, 77, 78, 113
Diovan, 116 Medicaid, 33
Effexor, 54 Medicare, 33, 34, 42, 43, 63
Eli Lilly, 39, 75, 76, 115, 138 Medicare Modernization Act, 33, 42, 43, 63
Melior Discovery, 76
143
Merck, 50, 54, 60, 76, 115, 135, 136 Risperdal, 98
Mirapex, 67 Roche, 27, 54, 76
Monotherapy, 111, 112 Sanofi-Aventis, 45, 58, 61, 70, 72, 99, 102,
135, 137, 138
Mutual Recognition Procedure, 43
Schering-Plough, 61, 102, 135
Mylan, 105, 106
Singulair, 93, 135, 136
Namenda, 52
sNDA, 121
Norvasc, 104, 105, 106
Spain, 37, 81
Novartis, 53, 58, 113, 121, 122
Starlix, 115
Noxafil, 61
Taxotere, 135, 137, 138, 139
Organon, 76
Topamax, 113, 114
Oxandrin, 95
Torcetrapib, 124
Patent, 30, 39, 40
Trileptal, 113
Pediatric, 13, 15, 21, 25, 89, 90, 92, 93, 96, 97,
99, 100, 101, 106, 127, 128, 133 U.K., 35, 36, 41, 50, 70, 122
Pediatric Research Equity Act of 2003, 99 U.S., 10, 11, 13, 18, 19, 20, 25, 26, 27, 29, 32,
33, 35, 41, 42, 43, 45, 48, 51, 52, 53, 58, 59,
Pegasys, 54 62, 63, 67, 68, 69, 70, 71, 72, 77, 78, 79, 80,
82, 89, 91, 93, 94, 96, 98, 99, 100, 102, 104,
Pfizer, 29, 40, 41, 52, 76, 77, 78, 79, 96, 101, 105, 106, 111, 113, 114, 115, 118, 119, 122,
104, 105, 106, 123, 124, 125 130, 135, 138
Plavix, 58, 61 UCB Pharma, 113, 114
Pravachol, 98 Velcade, 122
Prevacid, 115 Viagra, 35, 75
Procter & Gamble, 94 Vioxx, 29
Relenza, 50, 93 Wyeth, 54
Reliant Pharmaceuticals, 116 Xenical, 60
Remicade, 24, 26, 74 Yaz, 73
Repositioning, 75, 77 Zelnorm, 58
Requip, 67 Zyrtec, 101, 102
144

Indication Expansion Opportunities For Successful Lifecycle Management

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H E A LT H C A R E

Alison Sahoo is a pharmaceutical industry analyst with more than 10 years of

Copyright © 2007 Business Insights Ltd

While information, advice or comment is believed to be correct at the time of

Chapter 2 Extension to related indications 48

Chapter 3 Extension to new applications 66

Chapter 5 Extension of usage conditions 108

Chapter 7 Appendix 142

 Generic competition is a strong threat to branded products, particularly

 Several forms of indication expansion may be utilized, including expansion of

 The greatest limitation of an indication expansion is the ability of generic

 Indication extensions include extension of a product from treatment to prevention

 Declining sales as a result of competition or other factors is a key driver of

 A manufacturer may receive an extension of the drug’s market exclusivity;

 Indication extension is not always associated with extended exclusivity periods.

 As patent expirations for blockbuster drugs loom and generic competition

 Compared with other types of indication expansions, new application extensions

 In 2006, the pharmaceutical industry embraced a systematic new means to develop

 Gender-based extensions occur relatively infrequently, as the group of drugs

 As of early 2007, approximately three quarters of all medicines used by children

 Pediatric market exclusivity can be extremely cost effective; blockbuster drugs

 Typical usage extensions include expanding a drug’s usage from combination

 Usage extension is less common than other types of indication expansion.

 Usage extensions may make a product more convenient to take, such as by

 Although drug developers must invest in additional clinical research to support an

 Unlike other indication expansion strategies, such as new application extensions

 Pediatric extensions can also be used to provide some additional market

 Extension of usage conditions is most appropriate for special situation products,

 Overall, an extension to new applications offers the greatest level of benefit,

 An extension to new therapeutic applications offers the longest market exclusivity

 At the same time, an extension to new applications is challenged by the greatest

 An extension to new applications is highly dependent upon the drug’s

 An indication expansion broadens a drug’s usage beyond its original intended

 Generic competition is a strong threat to branded products, particularly

 Several forms of indication expansion may be utilized, including expansion of

 The greatest limitation of an indication expansion is the ability of generic

When an indication expansion is appropriate

Table 1.1: Selected indication expansions for US commercialized drugs

Company Drug Original Indication Expanded Indication Date of

Merck Ivanz Infections Prophylaxis of surgical site infection Dec 2006

J&J = Johnson & Johnson; GSK = GlaxoSmithKline;

Figure 1.1: Breakdown of new indication launches by therapeutic Area, 2005

Source: Business Insights Business Insights Ltd

Generally speaking, an indication expansion broadens a drug’s usage beyond its

 Extension of the drug’s usage to related indications, such as the approval of an

 Addition of entirely new therapeutic indications, such as treatment of additional

New formulations of a drug, however, such as injectable or transdermal versions of an

Expanded drug usage conditions

 Earlier usage of the drug in the patient’s treatment program;

 Expansion of a drug to maintenance therapy after treatment.

Extension to related indications

 Extension of a product from treatment to prevention or vice versa;

 Expansion of a product to more or less severe forms of a disease;

 Inclusion of closely-related variants of a condition.

Extension to additional indications

Prerequisites for a successful indication expansion

Objectives of indication expansion

In general, the objectives of indication expansion are threefold:

 To match competitive moves;

 To protect a product from imminent generic competition.

Some developers employ extensive indication expansion strategies, particularly for

Some drug developers are attempting to focus exclusively on indication expansions.

Benefits of indication expansion

Generic competition is a strong threat to branded products, particularly

Several forms of indication expansion may be utilized, including expansion of

The greatest limitation of an indication expansion is the ability of generic

Indication extensions include extension of a product from treatment to prevention

Declining sales as a result of competition or other factors is a key driver of

A manufacturer may receive an extension of the drug’s market exclusivity;

Indication extension is not always associated with extended exclusivity periods.

As patent expirations for blockbuster drugs loom and generic competition

Compared with other types of indication expansions, new application extensions

In 2006, the pharmaceutical industry embraced a systematic new means to develop

Gender-based extensions occur relatively infrequently, as the group of drugs

As of early 2007, approximately three quarters of all medicines used by children

Pediatric market exclusivity can be extremely cost effective; blockbuster drugs

Typical usage extensions include expanding a drug’s usage from combination

Usage extension is less common than other types of indication expansion.

Usage extensions may make a product more convenient to take, such as by

Although drug developers must invest in additional clinical research to support an

Unlike other indication expansion strategies, such as new application extensions

Pediatric extensions can also be used to provide some additional market

Extension of usage conditions is most appropriate for special situation products,

Overall, an extension to new applications offers the greatest level of benefit,

An extension to new therapeutic applications offers the longest market exclusivity

At the same time, an extension to new applications is challenged by the greatest

An extension to new applications is highly dependent upon the drug’s

An indication expansion broadens a drug’s usage beyond its original intended

Generic competition is a strong threat to branded products, particularly

Several forms of indication expansion may be utilized, including expansion of

The greatest limitation of an indication expansion is the ability of generic

Extension of the drug’s usage to related indications, such as the approval of an

Addition of entirely new therapeutic indications, such as treatment of additional

Earlier usage of the drug in the patient’s treatment program;

Expansion of a drug to maintenance therapy after treatment.

Extension of a product from treatment to prevention or vice versa;

Expansion of a product to more or less severe forms of a disease;

Inclusion of closely-related variants of a condition.

To match competitive moves;

To protect a product from imminent generic competition.

The objective of an indication extension is to increase a drug’s revenues by

Indication extensions include extension of a product from treatment to prevention

Declining sales as a result of competition or other factors is a key driver of

A manufacturer may receive an extension of the drug’s market exclusivity;

Indication extension is not always associated with extended exclusivity periods.

As patent expirations for blockbuster drugs loom and generic competition

Extension of a product from treatment to prevention or vice versa;

Expansion of a product to more or less severe forms of a disease;

Inclusion of closely-related variants of a condition.

Were initially approved for relatively narrow applications;

Address a condition with a range of severity levels or a broad number of variants;

May be used to prevent the onset of a disease or its symptoms;

Are facing declining sales as a result of competition or other factors.