Free Cialis! Eli Lilly Raises the Stakes
August 10, 2006

Eli Lilly & Co. has changed its TV strategy in a move that will likely make life more difficult-again-for its competitors in the erectile dysfunction category.

At the beginning of this month, Lilly began airing spots touting its “Promise program” in a single new TV spot. The program urges men to download a voucher for three Cialis tabs from the cialis.com web site. Men who take it to their doctors and get a prescription will get the drug for free. At that point, patients are offered a voucher for three more free tabs or-if they didn't like it-Lilly is offering to buy them three free tabs of the competing ED drug of their choice. Cialis is marketed by Lilly ICOS, a joint venture.

The “promise” offer was already running on the Web site prior to the new TV commercials.

“We're so confident of the benefits of Cialis that what we've seen over the last 12 months or so is that 92% will refill for Cialis,” said Matt Beebe, U.S. brand team leader at Lilly in Indianapolis. “If you want to go through with Viagra or Levitra, we'll pay for it,” Beebe said.

Although bold offers to buy disappointed consumers equal amounts of a rival's product are old news in other categories, it is a relatively unused tactic in Big Pharma—drug companies just don't buy their competing brands' products.

“This has never been done in the history of the pharmaceutical industry, as far as we can tell,” Beebe said.

Hyperbole aside, the new spot-which features a male on-screen speaker describing the offer in the foreground as a re-purposed version of an older spot rolls in the background-will function as a stumbling block for category leader Pfizer. It is no secret that, after the FDA slapped Pfizer's wrists a few months ago for making overly frivolous Viagra ads, the New York giant is currently trying to develop new work for Viagra.

Levitra was also asked by the FDA to change its ads (Levitra is a joint venture between Schering-Plough, GlaxoSmithKline and Bayer).

At the same time, Pfizer signed onto the drug industry's new DTC code of conduct last week, which restricts the times during which ED drugs will air on TV so that fewer children will see the ads. The code also means the likely extinction of ED spots on the Super Bowl.

On top of that, Pfizer has seen the dominance of Viagra erode slowly but significantly as Cialis gains ground. A Pfizer rep declined to comment on Wednesday.

Among newly written prescriptions, Cialis has a 25% share, Beebe claimed Tuesday. Among total share, Cialis gets a 23-24% range, he said. Third-running Levitra has about 14% of new scrips and 12% total, Beebe said. Viagra has everything else. “We've had steady growth in 2005 but not quite as steep [as 2004],” Beebe said.

At first glance, those numbers don't appear overly threatening to Viagra. But the blue diamonds were first to market, had a five-year head start on the two later entries, and the brand enjoys the advantage (like Kleenex and Xerox) of being the popular generic name for male sexual dysfunction pills. So any erosion of that dominance is regarded as a huge victory at Lilly, which entered the category third.

Currently, the ED market functions like this: Viagra tends to be the first choice for doctors writing new prescriptions, as it is the oldest, most-familiar brand to physicians. Men who don't like Viagra, or who become interested in Cialis's 36-hour efficacy period, are then likely to be referred next to Cialis. Levitra mops up the rest.

Cialis's point of differentiation (summed up best by the French who call it “le weekender”) has formed a pretty good market on its own. But Beebe said that Lilly actually wants to replace Viagra as No. 1. Beebe declined to outline Lilly's timetable for that, but he said, “We're right on track.”

Lilly's strategy is also a challenge to Pfizer's renewed interest in customer relationship management. The Lilly “promise” offer allows it to track the efficacy of its Web offering.

Coincidentally, earlier this year, Pfizer retained Epsilon, a 700-employee database-marketing agency with offices in Wakefield, Mass., Dallas, St. Louis and Washington. Epsilon was hired to do consumer-relations analysis for Pfizer across a range of Pfizer brands, according to Taleen Ghazarian, Epsilon's vp-customer relationship management/strategy and planning.

Trivia note: In the new Cialis ad, the footage in the background features the famous shot of a couple in matching bathtubs on a mountaintop looking down over the sea.

Where did this nonsensical scene come from?

“I didn't sit here in Indianapolis and say 'Put two bathtubs up there!'” Beebe said. The imagery emerged on its own in development and testing as Lilly looked for images that represented the concept of “relaxing.” “I'd love to tell you a story about how it was strategic,” Beebe said, but it wasn't a deliberate decision. The imagery simply “took on a life of its own,” he said.

Source: http://brandweek.com/bw/news/recent_display.jsp?vnu_content_id=1001012891&&imw=Y