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Pfizer Viagra

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Submitted By solace
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The long and difficult 13-year journey to the marketplace for Pfizer's Viagra
Introduction There are many stories that have emerged over the years concerning Pfizer's product Viagra. Some of these are true but many are simply fictional stories developed to try to reinforce a particular argument. One of the most common is that Viagra was the result of luck. This case study explores the long 13­year journey from laboratory to the marketplace and explores some of the key challenges faced by Pfizer; most notably, project evaluation considerations, when the available market research evidence suggests a small market for the product. And product launch considerations, when impotence is such an unpopular topic that it is almost impossible for advertisers to refer to it without alienating the very con­ sumer base they are trying to reach. What is Viagra? Pfizer's Viagra is now part of business folklore in terms of an example of a successful new product. Viagra is now one of the most recognised brands in the world; it has become a social icon with annuel sales in excess of $1.9 billion. And it has transformed Pfizer from a medium­sized pharmaceutical firm into the world's leader. Yet, Viagra was almost dismissed during clinical trials as interesting, but not clinically or financially significant. It is true Viagra was something of an accidentel discovery. Scientists testing an angina drug found that as a side effect it seemed to cure impotence in many patients. It did not take long for Pfizer to decide to focus on its unexpected bene­fit and to develop the product further as an antiimpotence drug. The drug was licensed by the US FDA (Food and Drugs Administration) and launched in the US in April 1998, amidst a huge fanfare of serious and not so serious media hype. At the time many news organisations used attention grabbing headlines often stretching the product's capabilities such as how Viagra could enhance sexuel perform­ ance. In the first month, 570,000 new prescriptions for Viagra were issued, generating $100 million in revenue. One aspect of the story that frequently seems to get highlighted is that this product was due to serendipity or luck. While this may be true for a very small part of the story, as this case shows the vast majority of the product's success was due to effective management, excellent research and development and very clever marketing. Unfortunately the serendipity aspect of the Viagra case overshadows the ground­breaking science involved (the Nobel Prize for physiology was awarded to scientists involved in the related research for Viagra) and the effective management by Pfizer of the new product development process. Moreover, this story reinforces in the minds of the public that science and research is dependent on luck. This is misleading at best and at worst dangerous. According to some journalists Viagra owes its existence to serendipity. They argue it started its life as a potentiel treatment for angine, and was being tested in clinical trials. As an angina treatment, it was pretty useless, but then the researchers began to get reports of some unexpected side effects and hence Viagra was born. This of course is not only incomplete but is misleading. Of course it would be naive to think

that the complexities of scientific research will always be accurately relayed to a mass audience, but for medicine and science to be portrayed as scientists playing around in the laboratories in the hope that something will drop from their test tubes is quite simply untrue. If science is not careful Viagra will end up like the discovery of penicillin and therefore antibiotics: that it was all down to luck. Few people realise that white Alexander Flemming discovered penicillin in 1928 it took another twenty years for scientists Howard Florey and Ernst Chain to develop a method of producing a product that could be used by patients for treatment in the form of antibiotics that we know today. The true story of Viagra is more complex and illustrates that the research project team had to fight hard for the huge investment that was required to develop the compound into a product. lndeed, it was almost not developed at ail. Gill Samuels, was director of science policy at the Pfizer Central Research Site, Sandwich, Kent, and was one of the key developers of Viagra. She was awarded a CBE for services to bioscience in the Queen's 2002 birthday honours list. She recalls some of the problems: Even in the early stages when it was known that we were doing trials in the UK we had patients writing in wanting to participate, and we have had some wonderful letters from patients who participated in those trials. Even before Viagra was launched in the US [in April 1998] we realised that it had a very profound effect. The question was how many of those men who did have erectile dysfunction would actually want to receive treatment for it? It was very, very difficult to predict the absolute numbers. There is no doubt about it that the media interest in Viagra raised the awareness of erectile dysfunction, and probably encouraged men who had the problem, but did nothing about it, to contact their doctor. (BBC.co.uk, 2006) From angina to Viagra To develop this one successful medicine, scientists screened over 1,500 compounds and spent an estimated £600 million (at today's prices). Furthermore, it took 13 years (1985­1998) to bring Viagra from conception to production. This level of investment is sometimes needed for research, development and to prove that the new medicine is safe and effective. Table 8.4 illustrate the stages from initial concept to final product. Viagra started life as a medicine intended to treat angina pectoris. Alfred Nobel ­ an explosives manufacturer from Norway ­ suffered from angina (angina is defined as brief attacks of chest pain due to insufficient oxygenation of heart muscles). In 1890 he was prescribed nitro­ glycerine (called trinitrin) to relieve the pain of angina attacks. It is still used today. Over 100 years later, the work of Robert Furchgott, Louis Ignarro and Fend Murad showed that nitric oxide (NO) was an important signalling molecule in the cardiovascular system. It is released from nerve endings and cells lining the walls of blood vessels. The effect is to make the blood vessel relax, or dilate. It is also involved in the prevention of blood clots. In 1998, they received the Nobel Prize for Physiology. The Nobel prizes were set up by the same Alfred Nobel who had been treated with nitroglycerine. Building on this knowledge, research by other groups is being undertaken to develop new medicines that moderate the actions of nitric oxide for the treatment of cardiovascular and other disorders (Pfizer,

2005). Dilating arteries Researchers started by trying to understand the process of vasodilation (what makes the arteries dilate). They decided to target the action of the new medicine on to the enzyme PDE (Phosphodiesterase). This enzyme breaks down the signalling molecule cGMP, which causes vasodilation. By preventing the break­down of cGMP the new medicine would increase vasodilation. Enzymes have a very specific shape. Viagra fits into the active site and blocks it. This prevents the PDE from breaking down the cGMP, which then stays in the blood and continues to cause vasodilation. The first step to developing the new medicine was to isolate and characterise the PDE enzyme (later called PDE­5). Once the PDE had been isolated, researchers could use it to find out the optimum conditions in which it works and also do tests to find efficient inhibitors. This enables molecules to be modified and designed to affect the enzyme. Clinical trials In 1991, following six years of laboratory research, a clinical trial was undertaken in Wales for a compound known as UK­92.480. The findings from the trial on healthy volunteers revealed disappointing results. The data on blood pressure, heart rate and blood flow were discouraging. The R&D project was in trouble. Some patients reported side effects of episodes of indigestion, some of aches in legs and some reported penile erections. This final point was listed merely as an observation by the cliniciens involved in the study, at that moment no one said 'wow' or 'great'. Indeed, the decision to undertake trials into erectile dysfunction was not an obvious one. This was partly because the prevailing view at the time was that most erectile dysfunction was psychological and not treatable with drugs. Few people believed it was possible to produce an erection with an injection of drugs. Men, particularly older men who are more likely to suffer from impotence, were treated as if it was their fault, that it was all in the mind and that they should try to accept their sex lite was more or less over. In any large research laboratory there will be hundreds and sometimes thousands of research projects being undertaken at any one time. Each project has to give regular reports on progress to senior R&D Table 8.4:The main stages in the development of Viagra
1985 Initial concept In 1985, scientists at Pfizer decided to develop a medicine to treat heart failure and hypertension. They were looking for a medicine that would vasodilate, or 'open', arteries, lower blood pressure and reduce strain on the heart. They chose to target the medicine to act on an enzyme found in the wall of blood vessels. Between 1986 and 1990, hundreds of possible medicines were synthesised and tested in laboratory experiments. The most promising compound was given the code name UK­92.480. It showed properties that suggested it would be a good medicine to treat angina. Research was redirected to look at this heart disorder. The medicine was later called Sildenafil and finally renamed Viagra (Sildenafil citrate). In 1991, healthy volunteers Look part in clinical trials to test the safety of Viagra and how the body metabolised the compound. These showed that it was safe. In trials over 10 days, the healthy volunteers reported some unexpected side effects. Male volunteers reported more frequent

1986­1990

Research and development starts

1991

Volunteer trials

erections after taking the angina medicine! 19 9 2 Erectile dysfunction Following the unusual side effects seen in the volunteer trials, researchers switched to looking into using Viagra to treat erectile dysfunction (ED). This serious condition causes psychological and emotional problems that affect many families. Research into using Viagra to treat angina continued but the medicine did not prove powerful enough to be really useful. 'Double­blind, placebo controlled' clinical trials started in 1993 to test how well Viagra treated patients with erectile dysfunction. To make the trials a fair test, neither the patients nor their doctors knew if they were receiving the medicine or an inactive placebo. Viagra proved to be a great success. Ail medicines need to be licensed by the medical authorities before they can be prescribed by doctors. To achieve this, trials must show it is safe and effective. Approval usually takes about 12 months but in the case of Viagra it received its licence in only 6 months. Viagra was given a licence. It could be used in the treatment of erectile dysfunction in 1998. In its first three months, there were 2.9 million prescriptions for the medicine.

1993­96

ED clinical trials start

1997

Licence application

1998

Licence approval

Source: Pfizer.com

managers who continually have to decide with which projects to continue investment and those to stop investment and which new projects to start. In 1991 the leader for the Viagra project had to report on progress and the results were disappointing. Essentially the medicine was not effective in treating angina. The senior R&D managers were preparing to not drop the angina R&D project due to its disappointing results. It was also considering dropping all studies on the compound even as a possible drug for erectile dysfunction. This was partly because it was not clear that it would have a clinical use. Not all the healthy volunteers had reported erections. Moreover, how would Pfizer be able to conduct trials for such a condition? Furthermore, the market for such a drug was not clear. At that time survey results revealed only 1 in 20 million men suffered from erectile dysfunction; hence even if a medicine could be developed the market would be very small. The R&D team involved in the project eventually managed to gain two years of funding to develop the drug and undertake clinical trials. One needs to be aware that at the time Pfizer had many drugs under consideration for the treatment of many other conditions such as colonic cancer, diabetes, asthma, etc. These markets were well known and understood. The business case for all of these projects and others could be easily made. Accurate predictions could be made on the number of people who suffered from asthma and what customers would be willing to pay for such drugs. It was not possible to draw up an accurate business case for Viagra due to the uncertainties of the market and the condition. There simply was not a similar drug on the market with which to make a comparison. This made it an even more difficult decision for R&D managers at Pfizer. Fortunately, in 1992 the go ahead was given to provide funds for the continuation of clinical trials into erectile dysfunction (ED). But another problem now faced the team: how to conduct clinical trials in this very sensitive area. Would the team be able to find people willing to participate and discuss their experiences? Fortunately, the team did not experience any major difficulty in recruiting volunteers. While it was true large parts of the population did not feel comfortable in participating, sufficient numbers of people were willing to take part, not least those suf­

fering from ED. The pharmaceutical industry is aware that despite advances in technology and scientific know­how, the odds of a drug candidate's success has not shifted in the past 20 years. Of 12 molecules that Pfizer classes to be its best bets ­ those drugs that have made it to the verge of clinical testing ­ only one will make it to market (Michaels, 2001). Product and market evaluation: Decision time! In 1996 following successful clinical trials the clinical success of the drug and obtaining patent protection did not seem to be in doubt, but that alone is not enough to proceed with the huge investment required to take the drug to market. Major uncertainties remained, especially with the business case: What is the size of the market? How many people suffer from ED? Could the market be bigger? Can we make the market bigger? The market for ED is not developed; can it be developed and how? Is it a growing market? Is there an existing customer base (i.e. current sufferers)? Is the potential big enough to warrant the investment? Does it support our short­term and long­term plans for the business? We sometimes need reminding that virtually all businesses are established to make a profit for their investors; hence, most decisions centre on finance. What is the investment and what is the likely return? This decision was no exception. The business case for Viagra was certainly interesting but there were many risks, not least would the product sell and how would Pfizer be able to market the product to a public that, in the US at least, was known to be conservative and prudish about talking about impotence and sex? The likelihood of a television commercial going out at 8 p.m. on ABC or NBC promoting the virtues of Viagra in overcoming impotence was simply unimaginable in the mid­1990s. Hence, there were risks in terms of the size of the market and, even if the market proved to be as big as Pfizer hoped, how would it be able to communicate with this market and promote the product? Is the a viable marketing plan? The drug cannot be purchased over the counter; hence men would have to get a prescription from their physician. The challenge for Pfizer then was to encourage men to go to their doctor and ask for treatment. This poses a significant challenge. The marketing campaign would need to focus on education and raising awareness of the condition. Impotence, however, is such an unpopular topic that it is almost impossible for advertisers to refer to it without alienating the very consumer base they are trying to reach. The audience would need reprogramming. While sex sells, it was important to numb the audience and society with educating material: an audience made up of sensitive males with problems that are often highlighted as the butt of many jokes. The consumer had to be reprogrammed to look at the situation in a new light. In order to do this,

a large amount of money had to be there for the product launch and the subsequent advertising that ties to it. After much debate and discussion Pfizer decided to attempt to create a sense of pride in the consumer through the opposite sex's testimonials of newly found happiness and through mainstream sports stars that epitomise the definition of manliness. The Viagra ads eventually selected by Pfizer tried to break through men's reluctance to address the issue by using celebrity spokesmen who embody respectability (politicien Bob Dole); athleticism (NASCAR driver Mark Martin, Brazilian footballer Pele and Texas Rangers baseball player Rafael Palmeiro); and virility (Hugh Hefner). Altogether, Pfizer spent more than $100 million on endorsements, television advertising, online marketing and sports event sponsorship. The celebrities encouraged men to fix the problem — as they would fix headache with Aspirin. The campaign earned Viagra brand­name recognition approaching that of Coca­Cola and has led to a saturation of Viagra jokes and spam emails. Some analysts argue Pfizer made a critical error by selecting Bob Dole as its advertising spokesperson. Dole, in his 70s, was clearly the market for Viagra. But he was not the target. The target is the 50­year­old married man who is having trouble, but is terrified of asking his doctor. Positioning the product for older men tells younger men that Viagra wasn't for them. Viagra would have been wiser choosing younger, more macho­looking men to help remove the stigma of ED and make younger men feel more comfortable talking about the problem and product. Today, you do see much younger male models in the Viagra ads. Launch At the launch, the priority for Pfizer was to retain control over the brand image, ensuring that it was positioned as Pfizer wanted it to be and that accurate information was given to the public. A campaign estimated to be costing tens of millions of dollars on consumer­orientated advertising in popular magazines such as Time, Life and Newsweek was undertaken. The enormous level of pre­launch publicity that Viagra had generated was not necessarily a good thing. The publicity was out of Pfizer's control, meaning that it could be inaccurate and/or damaging to the brand image. The thousands of jokes made about the brand could well have had a negative effect, making patients embarrassed about owning up to an impotence problem and asking for the drug. Pfizer waited until the worst of the publicity had died down before launching its campaign to make sure that its message was heard properly and that the drug was taken more seriously. This, along with all the media hype, had led to a rapid take­up after its introduction. Sales continued to grow as the product was progressively launched on worldwide markets. In 1998 total sales had reached $776 million, $1,016 million by 1999 and $1,344 million by 2000, representing over 5 per cent of human drug sales for Pfizer. The 2000 Annuel Report proclainned that more than 300 million Viagra tablets have been prescribed for more than 10 million men in more than 100 countries: Viagra had become a

worldwide brand in a very short period of time. Ail the US publicity was heard in Europe and made the European market a little more difficult to enter. When Viagra was eventually licensed in Europe laie in 1998, the UK health minister pronounced that Viagra would not be made available on the National Health Service (NHS). This had a lot to do with NHS priorities: impotence is not high on the list, apparently, and there were fears about the cost to the NHS if all the hype produced the same sort of level of demand as in the US. There were fears that it would cost the NHS £1 billion per year if it was available on demand. Although some relaxation has subsequently taken place, and doctors are allowed more say in prescribing the drug, it is still not readily available on prescription. Impotence in itself is not enough for free treatment ­ it must be caused by specific medical conditions such as diabetes. Viagra's advertising campaigns were never the key to its success, however. Because of its unique clinical function, Viagra became an immediate cultural point for ail issues relating to virility, male sexuality, and aging, and through this continuai popular referencing, much more than the effects of its $100 million advertising budget, Viagra has achieved a level of brand recognition that is reserved only for superstar drugs like Tylenol and Prozac. Indeed, Viagra continues to be a constant source of office jokes and comments for late night talk show hosts. More than simply spreading the word on what Viagra is, the enormous street and media buzz that Viagra has inspired has established Viagra's image overwhelmingly in terms of power and efficacy as the remedy for impotence. Competition The greatest challenge to Viagra came when Pfizer lost some of its patent protection. The main or active ingredient in Viagra is sildenafil, and potentiel competitors Eli Lilly and Icos Corporation challenged the legitimacy of the original patent issued in 1993. The court ruled that the knowledge on which it had been based was already in the public domain in 1993 and that the patent was now restricting research by other companies. Other companies would now be able to sell drugs that treat impotence by blocking PDE­5, a chemical, although Pfizer retains a patent on the active ingredient in Viagra ­ meaning that direct copies of the drug itself will not be permitted. In January 2002, the Court of Appeal (UK) had agreed with an earlier High Court ruling that knowledge covered by the Pfizer patent on the `PDE­5 inhibitor' was already in the public domain. Similarly in 2004 Pfizer faced increased competition in China after Beijing overturned its domestic patent for the main ingredient in Viagra. Although the molecular structure of Viagra was still protected, the main active ingredient was now open to competitors. The first serious challenge came from Uprima after it received its European licence in 2001. Its makers, Abbott Laboratories, based in Illinois, USA, claimed it worked more quickly than Viagra, with fewer side effects and cost less than for both low and high dosage tablets. Quick action can help spontaneity, unlike Viagra which has to be taken at least an hour before sex.

Pfizer continued with its legal baffles as it attempted to prevent competitors copying key elements of the drug. GlaxoSmithKline, the Anglo­American group, and its German partner Bayer were relying on Vardenafil to revive their flagging share prices (Firn and Tait, 2002). Critics argued that Pfizer's goal was simply to delay competitive entry for Viagra as long as possible, and if the patent were actually to stick, that would simply be additional profits. In 2003 the competition for Viagra increased noticeably when Viagra came third in the first independent comparison with its two new competitors. According to the research, 45 per cent of the 150 men involved in the trial preferred Eli Lilly's Cialis, while 30 per cent voted for Levitra, jointly marketed by GlaxoSmithKline and Bayer. The findings are likely to play an important part in the fierce marketing battle between the four pharmaceutical groups over treatments for impotence. Pfizer said the research was not scientifically rigorous (Dyer, 2003). The challenge for the competitors is different to that faced by Pfizer. Viagra is already a well­known remedy for impotence in the popular imagination; alternative drugs are fighting an uphill battle against the power of the Viagra brand. The marketing challenge that faced the makers of Cialis and Levitra is that they would have to re­establish the problem of impotence ­ a problem that many consumers see as already having been solved by Viagra ­ in order to offer their products as a cure. But because Viagra already exists, Levitra and Cialis would have to rely on advertising to increase their market share, and since ED appears to be a distasteful topic, advertisers decided to concentrate on enhancing ED's image, rather than its products' image. Cialis differentiates itself from both Viagra and Levitra by offering a 36­hour window of efficacy. This beats Viagra's and Levitra's four to eight­hour period, and allows Cialis to focus its advertising on timing rather than performance. Ail three advertising campaigns ultimately suggest the discomfort, shame, embarrassment, and fear that surround sex in general, and the lack of any compassionate, humane, truthful discourse on sexuel dysfunctions in our culture. Sex appears as a paranoid game where invisible spectators cheer winners and boo losers. Conclusions By virtually all measures this product has been universally successful for Pfizer, transforming it from a large pharmaceutical firm into the world's leading pharmaceutical firm. The actuel market for this type of drug is now known to be far greater than the original market research data had revealed. This is a cautionary tale of the need sometimes to encourage innovation and support scientific freedom in the face of evidence to stop the project. Viagra was the first­mover and first­prover in this category. However, Viagra has not been quick to respond to competitive scientific advancements in erectile dysfunction drugs. It takes Viagra anywhere from 30 minutes to an hour to work but Levitra, launched in 2001, improves upon that by working in 16 minutes. And Cialis, also launched in 2001, improves upon Levitra by being able to lest up to 36 hours. Indeed, competitors argue Pfizer has already conceded defeat by

introducing a loyalty programme which they argue is not about building a long­term relationship with their patients as Pfizer's marketing director says. Rather, they see it as a scheme by Pfizer to get the most out of the Viagra brand and it will continue to )ose market share to better, more will continue to )ose market share to better, more effective options from Levitra and Cialis. The erectile dysfunction market grew 3.5 per cent from 2003 to be worth $1.95 billion in 2005 and is almost entirely composed of sales from the three brands: Viagra (sildenafil), Cialis (tadalafil) and Levitra (vardenafil). Table 8.5 reveals the continued dominance of Viagra. One aspect of this case study that is seldom discussed is the extent to which Pfizer has benefited from raising disease awareness. A lot of money can be made from healthy people who believe they are sick. Pharmaceutical companies are able to sponsor diseases and promote them to prescribers and consumers, a practice sometimes known as 'disease mongering' (i.e. widening the boundaries of treatable illness in order to expand markets for those who sell and deliver treatments). Within many disease categories informai alliances have emerged, comprising drug company staff, doctors and consumer groups. Ostensibly engaged in raising public awareness about under­diagnosed and under­ treated problems, these alliances tend to promote a view of their particu­ lar condition as widespread, serious and treatable. Because these 'disease awareness' campaigns are commonly linked to companies' marketing strategies, they operate to expand markets for new pharmaceutical products. Alternative approaches ­ emphasising the self­ limiting or relatively benign naturel history of a problem, or the importance of persona) coping strategies ­ are often played down or ignored. As the late medical writer Lynn Payer observed, disease mongers 'gnaw away at our self­confidence' (Payer, 1992). For example, a double­page advertisement in the Sydney Morning Herald's Weekend Magazine told Australiens recently that 39 per cent of men who visit general practitioners have ED. The 39 per cent claim in the advertisement was referenced to an abstract of a survey finding. However, another recent Australien study, not cited in the advertisement, estimated that erection problems affected only 3 per cent of men in their 40s, and 64 per cent of men in their 70s. The advertisement's fine print cited a host organisation, Impotence Australie, but did not mention that the advertisement was funded by Pfizer (Moynihan et al., 2002). The key concern with 'disease mongering' is the invisible and unregulated attempts to change public perceptions about health and illness to widen markets for new drugs. Table 8.5 Sales of impotence drugs Impotence drug: Brand Sales (2003) Levitra (vardenafil) $131m Viagra (sildenafil) $1.88bn Cialis (tadalafil) $203m

Source: Dyer, G. (2003) 'Pfizer hits back at results of research on Viagra', Financial Times, 17 November; Firn, D. and Tait, N. (2002) 'Pfizer )oses legal battle to protect Viagra patent', Financial Times, 18 June; Michaels, A. (2001) 'Pfizer R&D unable to sustain group growth rate', Financial Times, 12 September; Moynihan, R., Heath, I. and Henry, D. (2002) 'Selling sickness: the pharmaceutical industry and disease mongering, BMJ, 13 April, Vol. 324, No. 7342, 886­91; Payer, L. (1992) Diseasemongers, John Wiley, New York.

Questions: 1 Was Viagra the result of serendipity or is this journalistic licence to help sell a story, where the real story is a complex one of difficult decisions full of risks? 2 Explain why it was so necessary to ensure marketing was involved in the early stages of this new product development project. 3 Explain how, despite the enormous resources of Pfizer, a lack of available information made the evaluation of the new product proposai so very difficult. 4 Explain how the Viagra case needs to be viewed as a successful example of excellent applied science but also an excellent example of good marketing. 5 How can Pfizer manage the threat posed to Viagra by new entrants to the market? 6 How has Pfizer helped create a market for Viagra and thereby contributed to disease mongering?

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