PROZAC AND PAXIL
1. What was the value proposition of the early antidepressants (the MAOIs and the tricyclics)? Was the value proposition of Prozac similar to these early antidepressants, or different? How was the value proposition of Paxil differentiated from that of Prozac? Value proposition of the early antidepressants
The early antidepressants (the MAOIs and the tricyclics) had the advantage of early movers in the market and they operated in market with no competition. As quoted in case, there were about 10 million American adults (app 5% of population) suffered from major depression. The early anti-depressants had the opportunity to capture this market. In 1988, when other antidepressant drugs were introduced (Prozac), the total number of prescriptions for all antidepressants in the U.S. was 40 million, out of which 2.5 million were alone of Prozac. The rest of prescriptions i.e. app 37 million were being addressed by the early antidepressant drugs only. One of the value propositions was that these drugs aimed to cure the depressions of above mentioned target segment. As quoted in the case “Both types of antidepressants work by increasing the levels of two related chemicals in the brain, serotonin and norepinephrine, which carry nerve signals through the nervous system and are believed to be associated with mood.” These drugs were believed to alleviate the symptoms in almost 60-80 percent of the cases which was a substantial claim to support their offering. Value proposition of Prozac similar to early antidepressants?
The value proposition of Prozac was different from the early antidepressants. All the early antidepressants had the risk of severe side effects and their intake was difficult to administer. When Prozac came in market, it addressed the existing issues of early antidepressants. Following were some of the key value propositions of Prozac which clearly differentiates it from those of early antidepressants. 1. Clean Drug: Prozac had the goal of developing a “Clean Drug” which focused exclusively to increase only the serotonin levels in brain and not affecting anything else. In this way, it also minimized the drug’s side effects. 2. Difficult to Overdose: Since the drug Prozac was difficult to overdose, it was looked upon as a safer option for the potentially suicidal patients. 3. Easy to Administer: Prozac was also easy to administer as compared to others early antidepressants. A single daily dose of one or two 20-milligram capsules was generally sufficient for most patients.
4. Not serious side effects: Prozac did have some side effects which included jitteriness, insomnia, nausea, loss of libido, and weight loss but none of them were considered serious. 5. No need of Medical Supervision: Prozac did not require medical supervision unlike early antidepressants and so was a good alternative for general practitioners who were reluctant to send patients to expensive specialists. 6. Off-Label: Prozac was also used to treat the other disorders such as OCD and panic disorders. The extended usage of Prozac was used to treat problems such as smoking, alcoholism, bulimia, and even kleptomania.
Value proposition of Paxil differentiated from that of Prozac
Paxil was initially positioned as an alternative to Prozac targeting mainly individuals who were concerned about the long term side effects of Prozac. One of the key value proposition of Paxil was Treatment of Social Anxiety Disorder (SAD). It was estimated that some five million American adults (3.7% of the adult population) were thought to suffer from SAD. This was one of the untouched segment which Paxil targeted and was the first and only medication to win US Approval for SAD. In addition, Paxil did the public awareness campaign along with educating reporters, consumers and physicians. While there were many similarities among the value proposition of Paxil and Prozac, the treatment of SAD by Paxil was one of the key differentiators. 2. Why did the early antidepressants (the MAOIs and tricyclics) fail to achieve widespread acceptance in the market? What factors accounted for the success of Prozac? What factors accounted for the success of Paxil? Failure of early antidepressants
There were 2 types of antidepressants that were used to treat clinical depression namely tricyclics (e.g., Imipramine, Elavil, and Tofranil), and monoamine oxidase inhibitors, or MAOIs (e.g., Nardil, Parnate). The early antidepressants failed to achieve widespread acceptance in the market due to the following reasons: 1. Side effects: Even after the proper dosage has been achieved, tricyclics tend to bring on side effects such as weight gain, extreme sluggishness, constipation, urinary retention, and disturbances in heart rhythm and blood pressure.
The MAOIs also carry the risk of severe side effects which included headaches and high blood pressure. The MAOIs can also be deadly if mixed with common foods. Because of this, both the tricyclics and the MAOIs are generally only prescribed to people suffering from the severest forms of depression. 2. Promotions stopped after being off- patent : Tricyclics and MAOIs were off-patent; as a result, they were not being promoted or detailed energetically. This resulted in low awareness about the product and its usage. 3. Poorly understood: Patients would accuse Psychiatrist of hostility, of unconsciously wanting to poison them. If they did take medicine, patients would spend long sessions on the couch complaining about how the analyst had made them constipated. 4. Tricky to administer: Although both the drugs have shown to be quite effective in clinical
trials and are believed to eliminate symptoms of depression 60% to 80% of time, both the drugs are tricky to administer. Tricyclics do not work if taken in quantities that are too small, but can be toxic if taken in quantities that are too large. Success of Prozac
Prozac was introduced in 1988 by Eli Lilly & Company (Lilly). Prozac was expected to earn no more than $70 million in sales. However, about 2.5 million prescriptions of Prozac were filled and global sales reached $125 million. The following year sales jumped to $350 million which was more than combined total spent on all antidepressants on the market just 2 years earlier. By 1992, the number of Prozac prescriptions being filled was closing in on 10 million a year, and by the end of the decade, Prozac accounted for almost a quarter ($2.6 billion) of Lilly’s global sales and more than a third of its global profit. The below are the various factors that contribute to the success of Prozac: 1. Detailing Tactics: Detailing is referred to the practice by which pharmaceutical sales representatives (and in some cases, supporting medical staff) made face-to-face sales visits to doctors and other healthcare providers to market new and existing products. 2. Sales Force Education: Lilly’s sales force educated itself about modern psychiatric practices, in particular the global trend toward psychopharmacology. 3. Efforts towards Psychiatrist : Lilly directed its sales efforts toward psychiatrists, particularly those who were major prescribers and “opinion leaders” in this area. 4. Efforts towards general practitioners: After Prozac had been on the market for several months, Lilly began diverting more of its detailing efforts toward general practitioners rather than limiting its efforts to psychiatrists. Lilly was able to position Prozac—which did not need to be accompanied by constant medical supervision —as an appealing alternative for general
practitioners who were reluctant to send patients to expensive specialists. By 1989, it was estimated that over 60% of prescriptions resulted from a visit to a primary-care physician or non-mental health specialist. 5. Educating general practitioners : Lilly also sponsored massive educational efforts directed toward general practitioners. After the American Medical Association found (in 1990) that nearly 46% of family doctors were unable to diagnose depression correctly in their patients. 6. Removal of stigma: Lilly long with several professional organizations set out to stimulate appropriate diagnoses and help remove the social stigma of psychiatric disorders. By all accounts, the strategy worked; by 1990— just two years after its introduction—the positive word-of-mouth about the drug had taken on a life of its own. 7. “Listening to Prozac”: Kramer’s publication “Listening to Prozac” further boosted the sales of Prozac. Kramer concluded that Prozac was not only effective at treating depression, but was also effective at transforming the personalities of its users for the better, giving them more confidence and greater feelings of self-worth. These factors helped Prozac became not only a popular drug but a socially acceptable one as well. 8. Direct to customer advertising: In 1997, the FDA had issued new guidelines that allowed drug companies to air broadcast advertisements that did not contain reams of information about a drug’s possible side effects. This relaxation of strictures on information and disclosure had paved the way for more high profile branded DTC advertising by p harmaceutical companies; Lilly was one of the first to take full advantage of the less stringent guidelines. 9. Off Labeling: Prozac began developing a reputation for being effective at treating other disorders, such as obsessive-compulsive disorder (OCD) and panic disorder. The drug was off labelled and physicians felt comfortable with the side effects associated with the drug. Thus the drug was also used for the treatment of problems like smoking, alcohol, bulimia, and even kleptomania. 10. Increase in sales calls and a 30-minute infomercial: As Prozac’s market share began to decline, Lilly once again fought back, this time by increasing sales calls on doctors by 25% in 1999. Lilly also produced a 30-minute infomercial to air on local and cable television stations in the middle of the night and on weekends. The infomercial, aimed primarily at women, included testimonials from people who had benefited from Prozac. 11. Multipronged Strategy: By 2001, the market landscape had changed considerably from the time Prozac had first been introduced. For one thing, Prozac’s patent was set to expire in August 2001, and it was unclear how Lilly and its competitors should adjust their marketing strategies. Lilly adopted a multipronged strategy that adopted the following elements: the
development of new delivery method for Prozac, The repositioning of Prozac for new indications and the development of new antidepressants. Success of Paxil
In 1993, SmithKline Beecham released Paxil (paroxetine) which was an antidepressant called “SSRIs” (selective serotonin reuptake inhibitors) because they selectively increased serotonin levels in the brain. Paxil was originally positioned as an alternative to Prozac, particularly for those individuals who had trouble tolerating Prozac or were con cerned about Prozac’s long-term side effects. The following below are the various factors for the success of Paxal: 1. Heightening public awareness of SAD: In May 1999, Paxil received approval from the FDA for a new disorder: the treatment of social anxiety disorder(SAD). SAD had been defined as a condition in which sufferers “avoided” situations that made them anxious. Some five million American adults were thought to suffer from SAD. Cohn & Wolfe (PR Agency) decided the best way to do this was by heightening public awareness of SAD, a disorder that most people viewed not as a serious medical condition but as a form of “shyness”. The marketing plan involved educating reporters, consumers, and physicians about SAD in order to encourage diagnosis and treatment. 2. Aggressive media campaign: The agency launched an aggressive media campaign featuring video news releases and press kits. In May 1999 alone (the month Paxil was granted FDA approval for SAD), the campaign resulted in over 400 million mentions of social anxiety disorder in the national and local media. Social anxiety disorder was also featured prominently in prestigious news publications as well. 3. Direct to customer advertising: SmithKline Beecham supplemented the public relations campaigns with a direct-to-consumer advertising campaign. From May through December 1999, SmithKline spending on DTC advertising went from zero to $31.5 million; 70% of this was directed at television (e.g., shows such as “Ally McBeal”) while most of the remainder was spent on magazine advertising (e.g., Rolling Stone). In contrast, just a million dollars was spent on advertising in medical journals. The message in the DTC advertisements focused almost exclusively on social anxiety disorder, rather than the drug (Paxil) itself. Some of the advertisements referred consumers to websites where they could complete a diagnostic “self -test” to determine whether they might be suffering from social anxiety disorder. In 2000, SmithKline Beecham merged with Glaxo Wellcome to become GlaxoSmithKline (GSK). That year, GSK increased the DTC advertising budget for Paxil to over $90 million, and global sales of Paxil picked up. 4. Reduced Cost: As per Exhibit 6 of the case study, the cost of Paxil for 30 days’ prescription was the lowest at $65.70. Due to this Paxil benefited the cost advantage over its competitors.
