Waking Up The Insomnia Market
If Americans have become jittery about popping pills to treat their everyday ills, you would hardly know it from the optimism surrounding Sepracor (SEPR ) Inc. On Dec. 16, the Marlborough (Mass.) company won approval from the Food & Drug Administration to market Lunesta, a new sleep aid.
Giddy investors pushed Sepracor's stock up 16%, to $60, in the two weeks following the news, as the tiny, still-unprofitable company announced a $60 million campaign to market the drug directly to consumers. Sepracor's ads, set to begin airing in February, will try to convince the bleary-eyed masses that they can safely take a pill every night to help them sleep.
There are plenty of customers, but it couldn't be a worse time to hit the airwaves with bold safety claims about a prescription drug. Recent revelations that painkillers Vioxx and Celebrex may raise the risk of cardiac disease have consumer groups howling that drug companies are abusing their right to market products directly to consumers. Critics who charge that Vioxx was overprescribed to people who would have done fine on aspirin say most insomnia cases can be treated with safer nondrug alternatives such as psychotherapy and meditation. Still, the drug companies, seduced by the wallets of 82 million Americans who battle insomnia, stand ready to entice restless sleepers with big ad campaigns that rival those of the sidelined painkillers.
Drug industry critics may be emboldened by Sepracor's ambitious plans for Lunesta. The market for drugs that treat insomnia is expected to double, to $5 billion, by 2010, and this year alone could see even more new insomnia fighters from the likes of Takeda Pharmaceuticals North America and Sanofi-Aventis. Analysts predict Lunesta will drive Sepracor's revenues up 66% in 2005, to $617.4 million. But Sepracor and some of its industry rivals are already looking to broaden the base of potential customers. Those companies hope someday to sell the drugs to patients with other illnesses, such as depression, for which insomnia is merely a symptom. "It's research and development, but it's really marketing," admits David P. Southwell, chief financial officer at Sepracor. "We think we can link into whole new markets for this drug."
To grab attention for Lunesta and meet head-on the anxiety over drug safety, Sepracor is counting on a unique claim: So far, Lunesta is the only prescription insomnia remedy that doesn't have to carry a label suggesting that patients stop the drug after 10 nights. Sepracor persuaded the FDA to omit that restriction following clinical trials showing the drug was safe over six months. Besides playing up that patients can take Lunesta nightly, Sepracor will stress that the drug helps keep patients asleep all night and that it produces little hangover.
Maybe so, but in the wake of Vioxx and Celebrex -- also trumpeted as safe for everyday use -- the FDA, which regulates all direct-to-consumer marketing, may raise an eyebrow at ads that underplay the side effects of sleep aids. That includes the risk that patients will become addicted. Henry A. McKinnell, chief executive of Pfizer Inc., (PFE ) will probably be thinking about that later this year when the drug giant is expected to win FDA approval for its sleep drug, Indiplon. In November, Pfizer yanked two Viagra ads at the request of the FDA, which complained that they failed to mention side effects. And the company voluntarily withdrew all its ads for Celebrex after concerns emerged about heart-attack risk.
McKinnell concedes his industry is responsible for building the perception that all prescription drugs are without risk. Mandatory disclaimers and warnings, including whole magazine pages of small print, are overshadowed by slickly crafted backdrops of amorous couples walking their spaniels or dancing through fields of flowers. "The industry has moved towards creating an image [around a drug]," McKinnell says. "We need to rethink what the unintended consequences might be."
Safety concerns could dog Sepracor and other new entrants to the insomnia market. Consumer advocacy groups such as Public Citizen complain that drugmakers aren't tracking carefully the link between sleeping pills and adverse effects, such as disorientation, that can lead to falls and hip fractures. Public Citizen's Web site, worstpills.org, cites independent studies that found 30% of broken hips in elderly patients who take drugs to treat psychological conditions are caused by sleeping pills. While ads for sleep drugs such as Ambien warn they can cause dizziness, Public Citizen's director of health research, Dr. Sidney Wolfe, worries that consumers don't get it. "Direct-to-consumer advertising is dangerously influential because it understates the risk," says Wolfe, who adds that six-month studies may not be enough to uncover risks of a nightly sleeping pill.
Sepracor's Southwell vows that warnings won't get lost in ad imagery for Lunesta. He and his competitors say they will continue to study the sleep aids. But those studies are designed more to expand the audience than look for unknown side effects. If those studies succeed, predicts Gary A. Lyons, CEO of Neurocrine Biosciences Inc. (NBIX ), which developed Pfizer's Indiplon, "we could potentially double the market" for sleep aids. No doubt marketing budgets would soar, too.
By Arlene Weintraub with Amy Barrett in New York