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From Patents to Franchises

Executive Summary

While the pharmaceutical industry has succeeded in creating value through innovation, it has failed to capture the value inherent in innovation by relying solely on the traditional models of product life-cycle extension. Instead, given the growing brand-name presence many drug companies have developed with consumers through DTC advertising, drug companies should exploit the consumer brand-equity they've built in their products with line-extension strategies that go beyond pharmaceuticals. While such brand extension can sometimes be dangerous if used inappropriately, it can be, as part of a new product strategy, far less expensive than new R&D programs.

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