Prilosec backs OTC rollout with $100 mil

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Procter & Gamble Co. is preparing one of its biggest drug rollouts ever, the over-the-counter conversion of prescription heartburn drug Prilosec.

Three days after receiving approval from the U.S. Food and Drug Administration June 20, P&G rolled out the first piece of a marketing campaign that is expected to rank alongside such $100 million launches as the 2000 rollout of prescription osteoporosis drug Actonel.

"You're not going to miss this," said Joe Arcuri, general manager for personal health care at P&G. "This is one of the largest launches we've ever done in health care and one of the largest in the company in recent memory."

Publicis Groupe PR agency Manning Selvage & Lee last week began enrolling potential participants in a 24-city "Burntown Challenge" promotion and publicity effort that will reach 24,000 heartburn sufferers in September.

P&G also will back Prilosec this fall with TV, print, interactive and in-store advertising, as well as professional marketing aimed at physicians and pharmacists. Publicis Worldwide, New York, is agency of record, with Medicus Group, New York, handling professional marketing.

Mr. Arcuri said he's not sure whether the insurance issues surrounding Prilosec OTC will be similar to allergy drug Claritin, which went OTC late last year. Many insurers since have tried to push patients to use the OTC drug, either by hiking co-pays or refusing to cover Schering-Plough's next-generation prescription drug Clarinex and other Rx allergy drugs.

"The cost [of Prilosec OTC] is going to be well under $1 a pill," he said, "which is less than [health insurance prescription] co-pays in many cases."

AstraZeneca, developer and marketer of prescription Prilosec, heavily marketed its next-generation prescription drug Nexium for years in preparation for the OTC switch, for which it licensed rights to P&G.

Though Prilosec was once billed as the "purple pill," Nexium has since taken on that moniker. According to the agreement with AstraZeneca, P&G can't make OTC Prilosec pills purple. But while the tablets will be pink, other marketing elements and packaging will draw on the purple heritage, Mr. Arcuri said.

P&G will target existing OTC antacids more than prescription switchers, he said, contending that "80% of frequent heartburn sufferers are dissatisfied with their current OTC substitute." Prilosec OTC ads will focus on a "your search is over" theme.

Information Resources Inc. data appear to bear out consumer dissatisfaction with branded competition. Category sales fell 2.1% to $717 million in the 52 weeks ended May 18, though private-label sales rose 8.8% to $138.7 million. Those figures exclude Wal-Mart Stores, club and dollar stores.

exclusivity

An agreement with the FDA allows P&G three-year exclusivity for Prilosec OTC, Mr. Arcuri said, meaning it won't face branded or private-label competition immediately.

Mr. Arcuri expects OTC Prilosec to fetch $200 million to $400 million in first-year sales. Heartburn "is more frequent than the common cold," he said.

Prilosec's results will influence P&G's goal to become what Mr. Arcuri termed "the preferred partner" for a growing wave of OTC switches.

Although P&G Chairman-CEO A.G. Lafley hired a consulting firm two years ago to explore possible divestiture of P&G's drug business, the potential for Prilosec and other OTC conversions were among factors that convinced him to keep it. Thanks in part to Actonel, which has topped $800 million in global sales, P&G's healthcare business has been its biggest driver of sales growth in recent years.

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