How a tough manufacturing process for Advair might help GSK

When GSK introduced its Advair Diskus to the market about 15 years ago, it wasn't expected to be such a big hit, never mind reaching close to $8 billion in sales as it did last year. It's actually not so abnormal for demand for new drugs to be way off their initial projections and it's typically no big deal. If a drug is unexpectedly popular it may take a while for production to ramp up but then the problem is usually over.But Advair is a different beast. Unlike the typical round, white pill, its complex inhaler mechanism was never designed to be produced in huge quantities in multiple locations around the world, where different environmental conditions and variations in raw materials could make it hard to duplicate. So manufacturing has been a challenge for GSK and consumed plenty of resources.The pharmaceutical world of 2013 looks a lot different than it did in the 1990s. Advair is now GSK's biggest product and the pipeline of potential blockbusters does not look all that promising. A normal product would have had plenty of generic competition by now, but GSK has managed to hold onto the whole market. The reason: prospective generic competitors struggle at least as mightily as GSK --and with fewer resources-- to produce the darn thing. The FDA is moving, but slowly, to clear a path for generics. It's still not clear when and if such copies will be available.So ironically, due to GSK's inability to anticipate the high demand for Advair and develop an easier-to-make device, the company is now benefiting from a much stronger barrier to entry on its lead product than it could ever have imagined or hoped for.The strategy looks brilliant in retrospect. If pharma developers are smart they'll try to pull off something similar with their next launch.