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Drug
Makers Offer Consumers Coupons for Free Prescriptions
By Gardiner Harris
The Wall Street Journal, March 13,
2002
Drug makers still pour hundreds of millions of dollars
into slick TV ads each year, but the latest strategy for advertising new
drugs is distinctly low tech: coupons.
Pharmaceutical companies are offering free one-week or
even one-month supplies of drugs to treat everything from diabetes to acid
reflux. They hope to get patients to persuade their doctors to prescribe a
new therapy or let them switch from an old drug. The drug makers are
sending the coupons through the mail and in e-mails, and printing them in
newspapers and magazines, including the New York Times, The Wall Street
Journal and Health magazine. Many also can be found on the Internet at
sites such as Viagra.com1, Clarinex.com2
and Purplepill.com3.
Like TV drug ads, the coupons are intended to push
patients into physicians' offices. But they put more pressure on doctors
because patients get discounts only if the physician prescribes the exact
drug listed on the coupon. The practice has become particularly popular
recently with drug companies launching new versions of aging drugs. The
companies use the coupons to sell patients on the idea of switching to the
new formulations before generic competitors overwhelm the old versions.
"Patients hand in their coupon to their doctor, they
get their free trial and if it works they can go back to their doctor and
discuss it further," says Rachel Bloom-Baglin, a spokeswoman for AstraZeneca
PLC. The company is using a coupon campaign to promote its heartburn drug,
Nexium, which is replacing the older Prilosec. "The whole aim of the
coupon is really to educate the appropriate people," she says.
Probably the most successful drug-company coupon campaign
so far was mounted by Bristol-Myers Squibb Co. Last year, the
company launched a broad campaign aimed at persuading users of its very
successful diabetes drug, Glucophage, to switch to a once-daily version of
the same drug, Glucophage XR, or to a combination pill, Glucovance.
According to Competitive Media Reporting, Bristol-Myers spent $81 million
last year on an ad campaign for XR and Glucovance that included coupons.
The campaign turned the new diabetes drugs into big
sellers. The two drugs together booked more than $633 million in sales in
2001. Sander A. Flaum, chief executive of Robert A. Becker, an ad
consulting firm, says the campaign piqued the interest of diabetics
because it offered a new, once-a-day therapy free of charge. Diabetics are
also disproportionately poor, so they may find coupons especially
enticing.
The long-term success of Bristol-Myers's campaign will be
determined over the next several months when patients who switched to the
newer therapies -- perhaps because of the one-month free offer -- decide
whether to switch back to cheap generics of Glucophage, which went on the
market in January.
While coupons are a staple of consumer retailing and can
spur sales, they're not always the best way to sell prescription drugs.
After all, consumers can't just walk into a pharmacy and pick up a package
of pills. They do need a prescription from a physician. And while some
drug-coupon programs reimburse patients for their co-payments, saving
money -- the great advantage of collecting coupons in other retail sectors
-- isn't that important to many patients. In 2001, just 16.5% of retail
drug purchases were paid directly by consumers, down from 24.1% in 1998,
according to NDC Health, a health-care information company. The rest was
paid by government or managed care.
Many doctors don't like the coupons. Frequently, they
say, it's medically unsound to substitute one drug for another just
because it's cheaper. "You end up spending your time talking about
the medicine they had a coupon for, that might not be right for them,
instead of talking about the best way to treat their disease," says
Phillip Kennedy, a family practice doctor in Augusta, Ga. "It
undermines what we're trying to do."
Eli Lilly & Co. underwrote a coupon campaign
last year in hopes of converting users from Prozac to a once-a-week form
of the drug before generics cut into sales of the older form of Prozac in
August.
But the campaign didn't work. "People see once a
week, and it's a totally different dosage than they're used to, and they
say that's weird," says Mr. Flaum. By January, the weekly form of
Prozac had captured just 1% of the market among Prozac-like drugs,
according to IMS Health.
Nonetheless, the company hasn't thrown out coupons as a
marketing tool. "From our viewpoint, we found coupons useful and
valuable, and we would and are considering using them again for certain
products in 2002," says Ed West, a spokesman for Eli Lilly.
Copyright
© 2002 Global Action on Aging
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