Propecia: Helping make hair loss history

GROUP 3:PRATEEK GOEL

SURUCHI GUPTASUNAKSHI BANSAL

Company Background Merck & co., Inc., was the largest pharmaceutical company in the world which

developed, manufactured and marketed a broad range of human and animal health product.

Merck ranked high on Fortune list of the most admired company and in it’s history had never had a government-imposed drug recall

Merck tended to rely more on its own research for new products than on the licensing of other companies drug

Since 1995, Merck had launched 9 new products including COZAAR and HYZAAR(new class of HYPERTENSIVE drug) and CRIXIVAN(an HIV and AIDS drug) and expected to exceed $23 billion in sales in 1997

Other successful drugs like FOSAMAX(drug for OSTEOPROSIS) and ZOCOR(a cholesterol lowering drug subclass called statins) were also growing rapidly

In spite of the competition from Pfizer’s LIPITOR, ZOCOR maintain the leading share of total prescription among cholesterol-lowering worldwide

In1998, it planned to introduce an unprecedented number of major products. In addition to PROPECIA, anticipated launches included SINGULAIR(asthma), MAXALT(migraines), AGGRASTAT(acute coronary syndrome) and COSOPT(glucoma)

Propecia PROPECIA represented a major breakthrough in the treatment of Male

Pattern Hair Loss(MPHL) and as per the clinical trials could be useful for men to regain hair

Initial clinical studies for PROPECIA included men between the ages of 18 & 41 with mild to moderate ongoing hair loss of type caused by DHT

Result was 83% of participants at least maintain their current hair count that is did not have a net loss of hair. Additionally, 66% of men experienced visible regrowth within the first year

Typically, the drug took about 3 months to produce visible result. However for some men the drug had no effect

Also, if a man stopped taking PROPECIA, his hair loss would resume at its old rate and any benefit would be reversed within a year

PROPECIA wouldn’t benefit women suffering from hair loss and women (and children) were specifically instructed not to use the product

In clinical tests, a small number of men experienced various sexual side-effects (less than 2%)

Understanding Hair Loss MPHL occurred in 30 to 40 million American men and lifetime incidence

was believed to approach 100% According to Casola, the potential market for PROPECIA is at least half

the male population Consumer Behaviour A lot of men who are losing their hair aren’t even aware of it because it is

happening back of their heads Some men falsely believe that brushing or wearing hats hastens hair loss Half of the population suffering from hair loss considered it as a future

problem Most men underestimated their own degree of hair loss Only two-third of the men concerned about hair loss One third of the men resigned themselves to the problem altogether

Existing Solutions of hair loss In spite of the prevalent consumer behaviour the hair loss market

accounted for about $1.5 billion in annual sales Solutions included in the hair loss market :  Hair replacement surgery allowed a patient to regrow his own hair In

a transplant, costs between $2000 to over $10000. Mechanical solution: It includes wigs ,weaves and toupees, costs

anywhere between $500 to $3,500 Topical Interventions: Lotions, potions and thickening Shampoos,

costs between $20 to $40The hair replacement surgery contributed about half of the $1.5 billion category sales Apart from these there was Rogaine, which was the only option

approved by FDA to treat hair loss, developed by Upjohn Rogaine had a extremely high brand awareness of 95% with 2.5 million

men and women spending $162 million annually

Marketing in the hair loss industry Marketing to physicians were done by sales representatives The face to face interaction time was very low typically around 2 mins

and sales reps had to pitch on an average 3 products during the time frame

On an average 6 detailing calls were required before a physician took proactive role in prescribing the drug

Direct marketing to patients can be done through television or print Due to FDA restrictions 3 types of advertisements were possible:

Help seeking advertisements where drug name can’t be mentioned but the manufacturer urges consumers to visit doctors if they had a particular disease

Reminder Advertisements where brand name was mentioned but it was not specified which particular disease the brand of drug caters to

Finally, if there is mention of both the brand name and about it’s functionality, then all the major side effects also needs to be mentioned in the advertisement

Estimated Market Size Total Male population: 132 million Atleast half of them have hairfall issues: 66 million Two thirds of these people were concerned about hairfall:

2/3 * 66 million = 44 million Out of these 44 million, only half consider this hairfall problem to

be a current one Estimated market size= ½ * 44 million = 22 million

Challenges in the product Patients most likely to be helped by the drug were men just starting to

lose their hair—and the greater the hair loss, the less effective the drug But most men are only compelled to action after the hair loss is obvious.

So the consumer most likely to buy the product would see fewer benefits.

A less than 2 percent possibility of sexual dysfunction—was too big a turnoff

Seventy to 80 percent of physicians will write a prescription if a drug is requested by name by the patient, unless there are overriding health concerns

Risk of brand awareness being driven by the much-publicized side effects issue

Four views of consumer decision making

The four views refers to the general view or perspective why individuals behave as they do

• Consumers associate deep feelings or emotions. The

impact of the firms marketing efforts is governed largely by the consumers perception of

these efforts

• Consumers act as a thinking problem solver. Risk is the key component the problem solver tries to dispel the risk associated with many product choices

• Consumers are passive, basically submissive to the

self-serving and promotional efforts of marketers and are

easily influenced by the message communicated

• Consumers try to be economical and makes rational decisions. Consumers operate in an imperfect world and often "settle" instead of maximising price-quantity, marginal utility

EconomicView

Passive View

Emotional View

Cognitive View

Issues to be addressed: What type of advertising? The help seeking ads will not work in this case. This is because in

absence of the brand name it is highly likely that people will relate the ad with Rogaine which has 95% brand awareness. Hence the ad will prove futile

The reminder ad category also has the problem that it is not easy to imply the utility of Propecia through ads. It will be extremely difficult to communicate the benefits of the drug through this kind of advertisements

We recommend product claim ads in this case Emphasis on visiting doctors for getting details about the product Emphasis on the fact that only 2% of men suffered from sexual side effects in

the trials and that the side effects became subdued with passage of time The side effects of the drug have to be notified to the consumers before actual

consumption, so it is better to inform them beforehand and try to point to the benefits of the product

Issues to be addressed: How the product should be positioned? Our recommendation is to position Propecia as a drug that

prevents hair loss since 83% effectiveness was established in clinical trials

Positioning it as a drug that is a cure for hair loss may give the consumer a perception that it will cause hair regrowth completely which has less chance of actually happening

Also, in cases where Procepia will actually induce high hair regrowth, there will be a chance of Customer Delight

Issues to be addressed: How much Detailing Support needed? Since we are suggesting in the products claim ad to go to

Physicians for consultation, detailing support needs to be high This has to be supported by the fact that the market potential for

Procepia is huge In the initial phase the drug should be prescribed only As the consumers get more aware about the brand and the

possible side effects, along with the benefits that it offers, it can be made available in the OTC market

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