The drug marketer is expected to shift its marketing theme for prescription heartburn pill Prilosec, which revolves around the color purple, to its successor drug Nexium.
Prilosec has been a blockbuster, in part because of consumer campaigns pegging it as "the purple pill." Purple-theme promotions have been splashed on prime-time TV, the Web site purplepill.com, even the floorboards in New York's Port Authority Bus Terminal.
ON TO NEXIUM
But as patent protection for the brand expires, AstraZeneca wants to switch Prilosec users to Nexium. The marketer also wants to create an over-the-counter version of Prilosec to fight off generic competition.
By staying with purple, AstraZeneca will avoid the pitfalls of building the Nexium brand from scratch. The stakes are high. The drug generates billions of dollars in annual revenue, and generic, low-price competition could crush AstraZeneca, particularly if the company fails to sell Nexium as a more effective product.
"I don't think they'll be able to change the entire patient base over to Nexium from Prilosec because there's too much other competition out there from drugs that are quite good," said Mark Ravera, an analyst with Mehta Partners. "They will probably be able to switch a certain percentage over, maybe 50%, through aggressive marketing."
The switch strategy was dealt a blow Oct. 20 when a U.S. Food & Drug Administration advisory panel declined to clear an over-the-counter version of Prilosec that would be marketed by Procter & Gamble Co. (It was also a jolt for D'Arcy Masius Benton & Bowles, New York, which has the Prilosec OTC account). AstraZeneca plans to continue pursuing an Rx-to-OTC switch, but told analysts last week it is a far lower priority than Nexium's rollout.
The OTC switch would give the company three years of exclusivity on store shelves with no private-label or similarly formulated competition. One person familiar with the matter said an OTC version would be called Prilosec, but would not be marketed as a purple pill. Spokesmen for AstraZeneca and P&G declined comment.
Nexium is expected to be cleared by the FDA by Dec. 31. Its $70 million to $80 million direct-to-consumer effort -- via Prilosec agency Klemtner Advertising, New York -- should start next March. Preliminary ads targeting physicians are expected to be launched in the U.S. soon, while purple-tinged professional ads have started running in the U.K., where the drug is already on the market.
AstraZeneca hopes the color transfer will help it capitalize on the equity and consumer awareness the company has spent $234 million building over the last three years.
But the decision to leverage Prilosec's purple power is not without risk. AstraZeneca needs to establish a standalone brand identity for Nexium to convince consumers and physicians that Nexium is a lot more effective than its predecessor.
"If they're trying to position Nexium as significantly better than Prilosec . . . that might make me wonder, `Do they want to keep the purple pill identity or do they want to build a new brand identity for Nexium,' " said Mr. Ravera.
Prilosec, considered to be the best-selling drug in the world, generated $4.2 billion in U.S. sales last year, 64% of the domestic market for the class of drugs referred to as proton pump inhibitors, according to IMS Health. TAP Pharmaceuticals' Prevacid was the No. 2 player, with $2.4 billion in sales.
Figures for the month of August, the latest available, show Prilosec has seen a dip in share as new products Aciphex from Johnson & Johnson and Protonix from American Home Products gain ground.