Posted on: Saturday, May 28, 2005
Erectile-dysfunction drug makers face tough times
By Theresa Agovino
Associated Press
NEW YORK — While the news that federal health officials are looking into rare reports of blindness among some men using Viagra and other impotence drugs certainly isn't good, the more immediate issue facing the makers of erectile dysfunction treatments is a stagnant market.
Yesterday's revelations aren't expected to effect sales because the incidence of blindness is so rare and the loss of sight hasn't been directly connected to the drugs. The Food and Drug Administration said it has received a total of 43 reports of blindness caused by a condition called NAION or nonarteritic anterior ischemic optic neuropathy among patients taking impotence drugs: 38 among users of Pfizer Inc.'s Viagra, 4 among Cialis users and one for Levitra. In contrast, over 23 million men have taken Viagra while 5 million have used Cialis.
Cialis is marketed by Eli Lilly & Co. and ICOS Corp. Levitra is sold by GlaxoSmithKline PLC and Schering-Plough Corp. in the United States, while Bayer AG markets it elsewhere.
Investors didn't panic. After slumping more earlier in the day, Pfizer shares closed down 55 cents, or 1.9 percent, at $28.35 yesterday on the New York Stock Exchange. Lilly shares fell five cents to close at $59.05 on the NYSE, while ICOS shares dipped 7 cents to $22.50 on the Nasdaq stock market. Meanwhile, Glaxo shares added 38 cents to $49.78 on the NYSE, and Schering-Plough shares slipped 11 cents to $19.67. Bayer shares rose 7 cents to $34.28.
During the first quarter, both sales and prescriptions for the drugs grew only 1 percent in the United States, according to IMS Health, a pharmaceutical marketing and consulting company.
When Cialis and Levitra debuted in second half of 2003, joining market leader Viagra, analysts expected the market would expand as their makers poured money into advertising in the hopes of drawing more of the approximately 30 million American men with erectile dysfunction into doctors' offices.
The advertising flood materialized: erectile dysfunction drugs were the second most heavily advertised category of drugs last year, with a total $382 million spent. But there have not been large numbers of additional patients, turning the market into a turf war to grab the limited number of males who want treatment.
"We thought that given the number of untreated men, we really thought there would be more use of the products," said David Moskowitz, an analyst at Friedman Billings, Ramsey, who now expects total prescriptions to advance only 1 percent to 2 percent this year.
While advertising "has successfully established awareness of the problem of erectile dysfunction," many patients are too embarrassed to bring up the issue with their doctors, said Dr. Natan Bar-Chama, associate professor of urology at the Mount Sinai School of Medicine in New York City. In addition, "some of the people we thought were interested in having sex just aren't."
Doctors said that some of these men either do not have partners, or have partners who are no longer interested in sex.
Moskowitz said he doesn't think the advertising will stop, even as the combination of embarrassment and apathy create a marketing dilemma for drug companies. But he said his industry contacts say doctors are receiving fewer free samples. He estimates that 50 percent of impotency pills distributed last year were free samples and that companies have cut that back to about 35 percent.
There are still programs that give patients free prescriptions for all three drugs, however.
Pfizer spokesman Daniel Watts said part of the reason the market is not growing is that Viagra's competitors were more concerned with stealing its share than finding new customers. "They are just riding our coattails," he said.
The competitors have hurt Pfizer. Last year, Viagra sales fell 11 percent to $1.68 billion. And while it still had 74 percent of U.S. prescription market, the total number of its prescriptions fell 14 percent, according to IMS.
But Viagra sales did rise 5 percent to $438 million in the first quarter of 2005. During the quarter, it held 67 percent share of U.S. prescriptions, although the number of its total prescriptions dropped 17 percent.
