Marketing Anti-Depressants - Prozac & Paxil

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What also added to the positivity surrounding the drug at the time was its acceptance as not merely a pill to treat psychiatric disorders but one that was also socially accepted. Listening to Prozac, the controversial yet best- selling book by Dr. Peter Kramer was instrumental in changing the perception about the pill. This led to Prozac being prescribed for almost any problem- from obsessive-compulsive disorder (OCD), to smoking and even gambling! By merely letting Prozac to be viewed as the single answer to most social problems, Lilly was able to capitalize immensely on the revenue potential of Prozac.

The fact that the success of Prozac far exceeded even Lilly’s own expectations within the first year of its introduction is testament to the fact that Lilly more than maximized its revenue potential on the drug, at least for the first 10 years.

Paxil

Smithkline Beecham’s Paxil on the other hand, had a slightly different approach towards capitalizing on the value of their drug. Although priced significantly lower than Prozac and having more tolerable side effects, Praxil was unable to break the vice-like grip of Prozac on the market for a good part of the 1990’s. Their breakthrough though, came a few years later when Paxil received the FDA’s go-ahead as a treatment for Social Anxiety Disorder (SAD), the first pill to be granted approval. Their opportunity lay in overcoming the challenge this presented- only 5% of patients with SAD ever sought treatment. But this challenge was surmounted, admirably so, by increasing social awareness and encouraging more people to view it is a medical condition that warranted medical attention rather than a mere form of “shyness”.

This was achieved by educating reporters, consumers and physicians about SAD firstly by recruiting SAD patients willing to share their experiences with the media, which was then supplemented by aggressive media campaigns to increase public awareness. They also invested in Direct-to-Consumer advertisements cleverly focusing on SAD rather than the pill itself.

These focused marketing efforts enabled Praxil to considerably increase its sales and market share, thus proving the effectiveness of their campaigns. Although, Paxil did record high growth in this period, they were unable to truly capture the market the way they should have, given the price-point of Paxil compared to that of Zoloft, which still managed to consolidate on its market share despite being priced higher. The fact that Praxil focused its efforts primarily on SAD may have been a contributing factor in not realizing its true potential.

The expiration of Prozac’s patent

With the expiration of Prozac’s patent, the emergence of generics is expected, which in turn is likely to trigger a price competition in the market. To counter the expected competition, Lilly formulated a multi-pronged strategy.

‘Focusing of new delivery methods’ seems like a first step to engage consumers and improve their convenience factor. The introduction of 90mg versions and the distribution of free samples offers attractive prospects for Prozac and other SSRIs users. Lilly could ramp up these efforts and explore other avenues such as setting up patients advisory groups to highlight patient’s involvement and uniqueness.

It could also ramp up the strategy of ‘Repositioning of Prozac for new indication’. Lilly has already managed to create the first prescription for premenstrual dysphoric disorder (PMMD) and is preparing to be the first entrant in pediatric versions. Lilly could focus on strengthening its brand from the beginning to reap the benefits of customer royalty as and when patent expires. Lilly also has a FDA approval for Dysthymic disorder that affects 5.4% of American adults. Lily can initiate a focused campaign towards Dysthymia. Moreover, entering in an untapped market has proven to be successful in the past for Paxil.

Lastly, ‘Development of new anti-depressants’ is a high-risk high-reward strategy. Considering the low success rate of new drug research efforts ( only 1 out of 5,000-10,000 compounds gets approved), Lilly can scale down its R&D budget in comparison to its peers. R&D expenses shave off close to 20% of Lilly’s revenues, whereas it is only 16% in the case of GSK. Alternatively, Lilly can redirect the budget in marketing and administrative activities that are only 31% of its revenues as compared to 41% in GSK’s case.

On the other hand, GSK’s could pursue a strategy similar to Prozac’s with certain modifications/additions. As a part of ‘Development of new delivery methods’, GSK can launch the controlled release version, Paxil CR for treatment of depression. If approved by FDA to treat panic disorder, GSK will compete with Zoloft in this area. GSK also needs to leverage press and media and replicate Prozac’s strategy in early 1990s, by communicating the drug’s advantage over previous versions one of which is that Paxil CR reportedly had fewer side effects than Paxil.

Like Lilly, GSK could focus on repositioning. It can enter a recently approved new zone-generalized anxiety disorder (GAD) to achieve first prescription in this space. GAD offers an addressable market which is 2.8% of the US adult population (4 million). Since, GSK already has competition in the form of Zoloft in PTSD (Post Traumatic Stress Disorder) and through Sarafem in PMDD, GSK can identify GAD as a target segment and create awareness amongst reporters, consumers and practitioners to encourage treatment and diagnosis.

GSK could also leverage its financial strength and develop new anti-depressants by maintaining its R&D budget at the existing level. With such a high R&D budget, GSK could develop its pipeline in low competition areas such as Pediatric Depression Dysthymia and Geriatric depression. GSK also has the experience of successfully conquered and developed unidentified markets in the past i.e. social anxiety disorder (SAD).

Additionally, GSK could aggressively focus on attracting Prozac’s consumer share by highlighting Paxil’s differential advantages, such as the drug’s lower half life. Considering the backlash in DTC marketing, GSK can invest in its sales force to improve detailing with general practitioners and psychiatrists, who greatly influence consumer’s opinions thereby improving sales of the product. They could also focus on developing an acceptable social space that proved to be a huge success factor for Prozac. Promotion of low side effects could also be one of the priorities for GSK. The firm can maintain its relevance by continuing its effort on public awareness and public campaigns. It can also engage

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