HEADACHES ARE BIG BUSINESS IN RUSSIA

By Published on .

MOSCOW-When Irina Bondarenko went to her local drugstore looking for something for a headache, the saleswoman offered her a choice: Bayer AG's Bayer aspirin, Sterling Health's Panadol or UPSA Laboratories' Aspirine UPSA.

Ms. Bondarenko bought all three. "I'll try them and see which is best," she said.

There are tens of millions of potential headaches every day in Russia, and Western marketers have begun lining up to cure them and the other minor Russian aches and pains. The Soviet state used to order about $3 billion in drugs a year from a select group of large Western pharmaceutical companies to sell at retail. But cash-strapped Russia is buying less and less for drugstores, throwing consumers to their own devices and leading American companies to distribute and sell the products to retail outlets.

Stuart Swanson, a manager for Pfizer International here, said sales of prescription drugs to the Russian state healthcare system have shrunk by 50% to about $1.5 billion since the Soviet collapse in 1991.

With the state system an insolvent shambles, foreign pharmaceutical companies are now taking a look at the individual consumers entering drugstores with open minds and open pocketbooks.

And they like what they see. "Non-prescription is the fastest-growing area of our sales," said Mr. Swanson, whose company has started marketing its Ben-Gay muscle cream, Visine eye drops and other over-the-counter items to supplement slowly recovering prescription sales to hospitals.

These products are "relatively inexpensive [for consumers], and you can advertise them," Mr. Swanson said. "You cannot advertise prescriptions."

Mr. Swanson and others say advertising-often done in quick saturation campaigns aimed at drilling the product name into people's minds-is paying off.

"Demand is up 500%" for Visine since a "fairly small campaign" last fall that lasted one month, Mr. Swanson said. "We can't keep up with supply."

In the vastness of Russia, whose transportation infrastructure has been cursed by Western marketers for centuries, supply is a major problem for importers of all consumer goods, including drugs.

"It's a physical problem," said Mr. Swanson. "You have 3,000 salesmen in the U.S., and they all make personal calls. Here, we have 10 or 15 salesmen to cover 10 time zones."

Yvan Drewinsky, Commercial Director for American Home Products' Lederle division in the Commonwealth of Independent States, agreed it is tough to cover his vast domain-and dangerous to rely on the shaky system of private distributors that has replaced the state network.

"You need to be sure of the capabilities of your distributors," he noted.

For one thing, you need to be sure they can pay. "Almost all distributors lack capital and need to purchase on credit, which is unusual," said Mr. Swanson. "You must be good at making a decision about their creditworthiness."

Many of the ads are translations of spots created in the U.S., but some companies are seeking success by appealing distinctly to Russians. A TV spot from D'Arcy Masius Benton & Bowles here for Sterling Health has a kindly woman druggist giving an elderly customer Panadol for her pain and then telling her to rush home "or you'll miss Santa Barbara," a play on the older generation's avid devotion to the aging Western soap operas.

In another departure from the norm, a print ad for Lederle's Centrum, from Friedmann & Rose/Moscow, takes the properties of vitamins an extra step, asking "Can Centrum improve your intimate life?" The ad features a young couple in bed, with smiles that appear to answer the question in the affirmative.

Mr. Drewinsky said the print and outdoor campaign last fall led to sales of 35,000 bottles of Centrum in less than 10 days.

But the multi-vitamin's debut was marred by simultaneous appearance on Russia's drugstore shelves of Vitrum, a similar product dressed in similar packaging but containing fewer vitamins-and selling for about half the price of Centrum, which goes for a budget-busting 50,000 rubles ($12) for a bottle of 60.

Mr. Drewinsky said the entrance of American Pharmaceutical Co.'s Vitrum to the market was clearly timed to take advantage of non-English speakers' trouble with name recognition and use Centrum's ads to sell the product without spending money on marketing.M

In this article:
Most Popular