Upcoming patent expirations on many drugs that could open the door to a host of generic knockoffs have sent many marketers scurry-ing to establish brand loyalty for drugs making the switch. That threat, combined with cash-strapped European healthcare systems cutting back on drug dispensing, is teaching pharmaceutical companies a new prescription: Switch to OTC or die.
Marketing journal OTC News estimates that pressure to cut healthcare costs in Germany, for example, has already led to a drop of 30% in the reported income on many prescription products in that country. Total drug sales in Europe's seven biggest markets, the U.K., Germany, France, Italy, Belgium, Spain and the Netherlands, fell nearly 11% to $46 billion in 1993.
The first head-to-head battle between two new OTC switches is in the $90 million U.K. antacid market. There, SmithKline Beecham's Tagamet 100 is trying out a potential global campaign against Pepcid AC, marketed by Centra Healthcare, the consumer pharmaceuticals division of Johnson & Johnson and Merck Sharpe & Dohme.
Created by Ogilvy & Mather Worldwide's New York office, the $6.7 million TV, print and below-the-line campaign for Tagamet is highly visual and can be adapted around the world, said David Furnish, Tagamet account director at O&M, London, which is executing the U.K. leg of the effort.
Last year the U.K. granted Tagamet 100 OTC approval. Later this year it's expected to also win approval in the U.S., where Tagamet's patent expired May 17.
The rest of Europe is also on the horizon; but given a widely varying approval process, it's difficult to tell when Tagamet, which had global sales of $1 billion last year, will march across Europe.
The TV and print ads running since late April show a solar eclipse with fact-filled messages telling consumers about the antacid. "An eclipse blocks off heat the way Tagamet blocks off acid that causes pain," Mr. Furnish said.
Rival Pepcid, also approved in the U.K. as its first OTC market, is being backed by a $7.5 million TV and women's magazine campaign by Still Price Lintas, also running since April. Ads show a huge, chalky tablet with engraved writing that says, "The idea of a new excess acid tablet that works for up to 9 hours isn't easy to swallow." Then a tiny life-size Pepcid tablet appears: "Any easier now?"
Another formidable antacid competitor will be an OTC version of Glaxo's anti-ulcer medication Zantac, the biggest individual prescription drug in the world with sales of more than $2 billion. Although the U.K. introduction of an OTC version of Zantac is believed to be at least a year away, Glaxo and its marketing partner Warner-Lambert Co. appointed the J. Walter Thompson Co. network as Zantac's first worldwide agency this spring.
Doug Clark, Wellcome Foundation product manager, is masterminding one of the most ambitious global switches to OTC status, for the company's Zovirax antiviral brand. Its $1.1 billion in worldwide prescription sales last year accounted for 37% of Wellcome's portfolio.
With seven European markets under his belt since September, Mr. Clark has positioned the OTC Zovirax product in Europe as a preventive cold sore cream. The move, Wellcome estimates, will generate an extra $30 million in U.K. sales in its first year.
Zovirax is already sold OTC in Belgium, the U.K., Germany, Finland, Denmark, Poland and the Czech Republic and will move to Italy, Spain and France where the drug is expected to be approved in 1995.
But in Europe's patchwork quilt of regulations, the company has to win OTC approval country by country and deal with rules ranging from Belgium's much-flouted ban on TV ads for OTC drugs and pharmaceuticals to a prohibition in several countries on using the same brand name for the new OTC product as the existing prescription brand.
As the global agency for the prescription to OTC switch, the London office of Bates Worldwide's HealthCom created the ad campaign used in all markets.
The 30-second TV spot focuses on a young woman's face with a clock in the corner of her mouth ticking off time until a cold sore appears. A voice-over explains the tingle is the signal to use Zovirax early to prevent cold sores.
The same branding devices-the face with a clock, the catchy "Treat the tingle" slogan, and an eye-catching box with a huge blue Z for Zovirax-are used in everything from the TV commercial and women's magazine ads to free-standing pharmacy displays.
But no matter what strategy is used, marketers know they need a cure for prescription drug cutbacks. Spain has thrown hundreds of products off the prescription-only list during the last 15 months. And Germany's health service last year gave doctors a fixed budget for government-subsidized prescriptions-telling physicians they must pay for prescriptions over the limit.
"I don't think regulatory authorities [in Europe] can cope with the huge number of switches that are going to be dumped on their desks," Mr. Clark said.