In 1999, the anti-obesity prescription drug market generated revenues of $338.6 million, showing a startling growth rate of 80.6% from the previous year, according to marketing consultant Frost & Sullivan.
Although that is a small fraction of the $33 billion Frost & Sullivan calculates U.S. consumers spend annually on weight-loss products and services, pharmaceutical companies are hoping even more consumers will find the answer to their weight-loss problem in a prescription bottle.
Consider the fen-phen incident in 1997 in which an estimated 6 million people had taken the combination of fenfluramine and dexfenfluramine only to discover later the mixture was found to cause valvular heart disease. Although many takers were reluctant to stomach anti-obesity prescription drugs after the incident, some moved on to Hoffmann-La Roche's Xenical and Knoll Pharmaceutical Co.'s Meridia, now the anti-obesity drug leaders with 44.4% and 29.8% market share, respectively.
"It's been a fairly intense battle for market share," says Thomas Miller, president of T.A. Miller Co., a pharmaceutical research company. "Xenical . . . has significant noise level as far as advertising and promotion are concerned. [Roche has] strong DTC advertising and an active sales campaign directed toward physicians," Mr. Miller says.
Add to that data from the U.S. "Health and Nutrition Examination Survey" showing about 40 million adults, or 22.3% of the U.S. adult population, are obese, there are a number of dieters willing to respond to advertising that touts the pharmaceutical solution to a slimmer body.
Knoll, a subsidiary of BASF Corp., introduced Meridia in the U.S. in 1998 with a campaign created by FCB Healthworks, New York. The ads sought to differentiate Meridia from fen-phen in TV, magazine and newspaper ads by quoting clinical studies that said Meridia was not associated with heart valve dysfunction. The company, which spent $39.8 million for the first nine months of 1999 for Meridia, according to Competitive Media Reporting, also distributed educational pamphlets about the product's safety.
"The Meridia direct-to-consumer advertising campaign has proven to be one of the most successful components of our marketing mix," says Tony Anzalone, Knoll's associate director-obesity marketing. "This campaign uses a first-of-its-kind approach designed to open up the dialogue between physicians and their patients."
Meridia pulled in $110 million in sales last year after grabbing consumers' attention with TV spots that state, "You do your part. We'll do ours," promising the drug will help patients control their appetites.
Initial TV spots for Roche's Xenical DTC ad campaign, estimated at $70 million, lacked fair balance, according to the FDA. The ads claim the drug blocks fat absorption and holds the distinction of being the only anti-obesity drug not classified as a controlled substance. However, an early ad ran afoul of the FDA, which claimed the drug's side effects, such as gastrointestinal problems, were drowned out with distracting music in the TV spot, created by Lowe & Partners, New York.
COULD HIT $2 BILLION
Salomon Smith Barney predicts Xenical sales could reach $2.02 billion in 2001, while Meridia sales may hit $629 million in 2001.
Gate Pharmaceuticals' Adipex-P places a distant third in the anti-obesity race, with 4.5% market share, followed by Medeva Pharmaceuticals' Ionamin with 3.9%.
"[The anti-obesity market] is perhaps the largest therapeutic opportunity for pharmaceutical companies and currently only a small proportion of this huge end-user base is being tapped," says Paul Woo, industry analyst at Frost & Sullivan. "The idea of an oral pill taken daily for the rest of your life is very attractive for these companies."M