PRESCRIPTION FOR PROFIT: AGGRESSIVE STRATEGY HELPS PROPEL CLARITIN TO TOP SLOT: SCHERING RUFFLES FEATHERS AS IT PUSHES LIMITS ON GUIDELINES

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Turning around bad initial timing, a rocky regulatory road and fierce competition, Claritin has become the king of prescription antihistamine sales and direct-to-consumer drug ad spending.

A fierce contestant, Schering-Plough Corp. unapologetically expects competitors and the Food & Drug Administration to cry foul periodically over its advertising. That's the price the company will pay to pave the way in the DTC advertising arena.

That price is in addition to the nearly $200 million price tag on its DTC advertising -- all those dollars spent since Schering introduced its non-sedating antihistamine in 1993.

$1.8 BILLION CATEGORY

Industry observers believe Schering has nothing to lose by promoting Claritin as aggressively as possible. At stake, they say, is market share for years to come in the hotly competitive $1.8 billion allergy remedy category. The brand held more than 56% of the market, totaling $853 million in sales through October 1997, according to IMS America.

Advertising behind prescription allergy remedies exceeded $150 million in media for 1996, according to Competitive Media Reporting, and will reach about $250 million in 1997.

"No one else has been as aggressive as Schering-Plough in direct-to-consumer prescription advertising," says Don Stuart, partner at consultancy Cannondale Associates.

Indeed, Claritin started far behind its competitors when it was the third non-sedating antihistamine approved to enter the market in April 1993, usually a debilitating position for a challenge.

Competitor Seldane, introduced in 1985 by Hoechst Marion Roussel, then held a leading 47% of the antihistamine market. But concerns about Seldane's side effects became public as Claritin was being approved, giving Schering's product the upper hand, observers say.

AD BUDGET BALLOONS

When it was introduced, Claritin was pitched directly to consumers by advertising from Thomas Ferguson Associates, Parsippany, N.J. Schering put about $16 million into media spending for Claritin until 1995 when it nearly doubled its budget -- all of it earmarked for print. Claritin-D was introduced in late 1994, just prior to the spending increase.

Schering lead drug marketers onto the Internet in May 1995 when it added a Web site (www.claritin.com) as a vehicle for DTC and professional communication.

DTC was still all but limited to print then, yet TV was where Schering wanted to be.

In 1996, Claritin moved onto the small screen, even though FDA permitted only "reminder" ads -- limiting TV spots to either brand names or medical conditions but not both. Schering went with branded spots but felt that not being able to state its purpose only confused consumers.

Nonetheless, ad spending doubled again in 1996, to almost $60 million.

"It was a bizarre situation," says Bob Consalvo, Schering's media relations manager. "There was a disconnect in consumers' minds about what were we trying to do, and we used to get complaints [from consumers] about those TV spots."

Despite such limitations, says Mr. Stuart, "Schering wanted to either prove or disprove whether this is a viable marketing strategy for building a long-term brand franchise."

That year, the company also introduced extensions Claritin Syrup for kids and Claritin-D 24-hour. Claritin also faced a $30 million campaign from Pfizer's Zyrtec, a $33 million effort from Glaxo Wellcome's Flonase nasal spray and ads announcing the switch of Hoechst Marion Roussel's Seldane to Allegra.

In August 1997, FDA finally allowed drug marketers to move forward with more specific TV campaigns. Just days later, Claritin broke a new 30-second commercial that named the drug and its purpose. The spot, in bright blues and greens, showed a floating hot-air balloon while a voice-over proclaims, "Escape the limitation of seasonal allergies!"

FDA ORDERS MODIFICATIONS

But FDA's Division of Drug Marketing, Advertising & Communications quickly pounced on Schering, making the company an example for other DTC marketers. It told the drug company to modify the way it told consumers to get more information about side effects and medication details.

DDMAC criticized Claritin's ad on several points: for putting white type on a white background when directing consumers to its magazine ad for more information; for not saying consumers could ask a doctor or pharmacist "for more information" and for saying safety information at a faster pace than other parts of the ad.

WAITING FOR FDA TO CONFIRM LETTER'S POINTS

"Every time there's a complaint, that only helps to further hone the ad strategy," Mr. Consalvo says. "When there's a problem with a particular ad, we change it. There is a feeling that we have to pick our way through the FDA guidance on advertising to consumers. This is a new area, for them and for us, and we're figuring it out as we go."

BACK TO THE DRAWING BOARD

Schering, which declined to make available any top executives or Claritin brand managers for this story, rejiggered the ad and put it back on air within a few days.

"The winners in the prescription drug category are not going to be the ones with the best patents or products, but those that are the best marketers," says Gary Stibel, a principal at of New England Consulting Group. "Schering-Plough clearly is using Claritin as a beta test of [its] ability to outmarket the competition in the new area of marketing prescription drugs to consumers."

SELDANE WITHDRAWN

At the same time, it didn't hurt Schering's marketing efforts that its closest competitor, Seldane, had to be withdrawn under FDA pressure due to potential drug interactions.

In August 1996, Hoechst introduced Allegra, a drug related to Seldane but without the negative side effects.

Still, Schering pushed hard against Seldane, running page newspaper ads in early 1997 that proclaimed, "Seldane may no longer be an option. Claritin is a clear choice. A safe choice. No doubt about it."

Although Hoechst cried unfair competition -- and Schering did tone down subsequent ads -- familiarity with Claritin continued to rise.

Steve Fleischman, VP-business development at Market Measures Research, says consumer awareness of Claritin advertising went from 49% in 1996 to 57% in 1997. It approached that of many over-the-counter brands, according to a comprehensive study of DTC efforts.

COMMITTED TO THE PUSH

Not settling for that distinction, Schering remains committed to pushing Claritin in any way it can. A stronger version of Claritin is already in the works and brand media spending continued to creep up to almost $70 million near the end of last year.

Meanwhile, Hoechst's support behind Allegra was just a hair behind. OTC remedy spending continues at a feverish pace.

Sue Coleman, president of NCI Consulting, says Schering is "really in the optimal position. They have a very clean [safety] profile, acceptable efficacy and a high share of mind. It makes them almost invulnerable."

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