Judging by the tons of TV and print ads that pitch erectile dysfunction drugs, you would think the big three -- Viagra, Cialis, and Levitra -- were selling as briskly as beer at a football game. After all, what could be more marketable than a pill that helps aging men perform better in bed?
It's not working out that way. Despite gargantuan ad budgets, sales are trailing expectations for all three contenders. Viagra's worldwide sales fell 11% last year and, at $1.7 billion, were less than half what was projected by Wall Street firms a few years ago. Cialis and Levitra drove the category up 10% in the U.S. But Wall Street analysts -- some of whom had speculated years ago that Viagra alone would be a $4.5 billion brand by 2004 -- aren't impressed. Cialis, marketed through a joint venture between Eli Lilly & Co. (LLY) and Icos Corp. (ICOS), rang up U.S. sales of $203 million in its first full year and spent $165 million on ads. And GlaxoSmithKline PLC's (GSK) Levitra, co-marketed until recently with Bayer (BAY), sold just $128 million worth of pills, well below what the companies spent on TV, print, and other media. Combined, the three spent 37% of their sales on ads, according to TNS Media Intelligence. Compare that with Ford Motor Co. (F), which spent about 7% of U.S. automotive revenue on media last year.
Viagra's drop has been much steeper than anyone predicted. When it came on the scene back in 1998, Viagra was a textbook case in how to market a prescription drug as a consumer product. In less than two years, Pfizer Inc. (PFE) cemented the name into the popular lexicon in a way that marketers only dream about. "I've hardly ever seen a brand franchise in any category take off so fast," says Los Angeles marketing consultant Dennis Keene.
The reality today is much different. Less than 15% of the estimated 30 million men suffering from erectile dysfunction (ED) have tried one of the drugs. Matthew G. Beebe, brand team leader for Cialis at Lilly, says that many are still embarrassed to ask their doctor about the drugs. Another problem is that too many patients are disappointed when they take the pill and nothing happens. Dr. Timothy Schuster, assistant professor of urology at the University of Michigan Medical Center, says many patients don't use the right dosage. He adds: "A lot of doctors don't make the connection between ED and underlying disease like cardio-vascular disease and don't engage patients."
But drugmakers can also blame themselves for lagging sales. In their rush to grab more of the market, they flooded doctors with free samples. Last year, up to 40% of the pills taken by men were free, says pharmaceutical research firm ImpactRx. And clearly, the ad-fueled hype stoked some early demand from those who were more curious than afflicted.
Much of that hype has now faded -- but don't expect pillmakers to back off. Viagra's latest ads have men playfully sprouting blue horns the same color as a Viagra pill. The Food & Drug Administration slapped Pfizer's wrist last fall, making it withdraw some ads that the agency said overpromised and failed to give adequate warning about side effects. Cialis has taken a more romantic approach, with middle-aged couples canoodling, to emphasize the drug's 36-hour working time (compared with Viagra's and Levitra's four-hour windows of opportunity). Levitra has the steepest hill to climb because it works about the same as Viagra but has less brand recognition. Bayer (BAY) passed U.S. marketing control last year to GlaxoSmithKline and Schering-Plough Corp (SGP). In January, Glaxo and new partner Schering-Plough tapped Saatchi & Saatchi to scope out a different direction.
So far, the passion pills haven't had to worry much about decency standards on TV networks. NBC says it won't run the ads on "family" shows, but the drug companies aren't interested in those programs anyway. (FOX) "We aim where the men are," says Lilly's Beebe. But hitting them with Cupid's arrow is proving to be anything but a sure thing.
By David Kiley in New York