Meanwhile, the new marketer of competitor Meridia, Abbott Pharmaceuticals, said last month it will halt all direct-to-consumer ads behind its drug.
Turnarounds are rare in drug marketing. Increasingly, with a rapacious Wall Street demanding instant success, marketers are under pressure to successfully launch a blockbuster in the U.S. Any stumble and skeptics will write it off.
Fair or not, Xenical has become sort of a paradigm of how a much-anticipated drug launch can founder and have wide-reaching effects, from less-than-stellar revenue to big layoffs. This spring, Roche let go 900 employees in the U.S., including 600 sales reps. And Myron Holubiak, president of marketing arm Roche Laboratories, resigned.
The new campaign, launched in February, doesn't seem to have given the brand a noticeable boost despite a change in strategy-designed in part to divert attention from the drug's alarming list of possible side effects-as Xenical sales in the U.S. look to be declining or at least leveling . In 2000, its first full year on the market, the brand had $225.4 million in U.S. retail sales, according to NDC Health; figures for the first six months of 2001 show $103.7 million.
Also, the drug's 2000 sales more than doubled those of competitor Meridia from Knoll Pharmaceuticals (which Abbott purchased in March). But figures for the first six months of 2001 show Meridia sales generated $80.9 million, narrowing the gap. For June alone, the most recent month available, Xenical sales came in at $17.7 million, while Meridia posted $14.7 million.
A possible factor in Meridia's surge: significant U.S. ad spending, $35.7 million through April 2001, according to Taylor Nelson Sofres' CMR. But this fall, Meridia's DTC (which generated $65 million, per CMR, in 2000) will end as the firm moves from a potentially cosmetic message to an effort to "increase awareness of obesity as a medical condition," Abbott spokeswoman Cindy Resman said.
Meanwhile, Roche's economic troubles may have already led it to trim ad spending. The company spent only $9.7 million behind the new campaign through April, according to CMR.
A statement from Roche spokesman Terry Hurley said the new marketing effort was effective. NDC figures show a 23% jump in new prescriptions in March, the month after the campaign launched, but the ensuing months brought a leveling off.
In addition to the likely ad spending cut, Roche may join Abbott in redirecting resources away from TV to other promotional avenues. A TV executive said Xenical ads have not run on his network since the first quarter, and Roche has expressed no plans to begin again. Mr. Hurley said Roche is "evaluating our promotional investment mix for Xenical."
Like Abbott, Roche is trying to position obesity as a serious medical condition; Roche submitted an application to the FDA to market the drug as a treatment for type-2 diabetes earlier this year.
SILENT ON SIDE EFFECTS
Roche and the FDA have continually bumped heads on Xenical's marketing. In the new February campaign, Roche appeared to go out of its way to avoid mentioning jarring gastrointestinal side effects. The company used ads where consumers were urged to ask their doctor about treatments for obesity with no mention of Xenical, along with ads that simply urged viewers to ask their doctor about Xenical with no mention of its potential benefits and thus no side effects listed. The ads featured similar images and music and were sandwiched around unrelated spots. Roche hoped consumers would link help for obesity with its brand, but the FDA was vocal in its belief that, though the strategy may be legal, it violated the spirit of the regulations.
Roche also tried another tactic to divert attention from the side effects, resulting in an FDA citation. An ad plugged the XeniCare support program, not Xenical directly, but the FDA noted that "Xenical is the only weight-loss product with a support program named XeniCare."