Rivals Swoop in After Report Batters Diabetes Drug Avandia

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Pharmaceutical players jockeying for leverage in the ultra-competitive $10 billion diabetes market are poised to pounce on a report that GlaxoSmithKline's powerhouse drug Avandia increases heart-attack risk.
GlaxoSmithKline plans to increase advertising of Avandia to physicians.
GlaxoSmithKline plans to increase advertising of Avandia to physicians. Credit: Justin Sullivan

Hot on the heels of last week's report from the influential New England Journal of Medicine said Avandia raised heart-attack risk 43%, drug giants such as Eli Lilly and Merck are ramping up marketing for their competitive products.

Money for Merck
In a research note, Morgan Stanley analyst Jami Rubin wrote that the Avandia news will likely benefit Eli Lilly's Byetta and Merck's Januvia and Janumet. The analyst predicted a "significant portion" of Avandia's 2007 projected revenue of $3 billion will go to Merck's medicines, mostly because Januvia and Janumet are oral drugs. Byetta is injectible.

Januvia and Janumet are both new to the market. Byetta, co-marketed by Indianapolis-based Lilly and Amylin Pharmaceuticals, San Diego, had $430 million in sales last year but little to no direct-to-consumer ad spending.

"That will change," said the president of one health-care ad agency that does not have any diabetes-related business. "A lot of the advertising for Byetta and for Merck's drugs has been professional. You can expect more consumer work soon. It's just the competitive nature of the business and the category."

An Eli Lilly spokesman said the company does not comment on its marketing plans, while Merck, based in Whitehouse Station, N.J., did not return a call by press time.

GSK's response
GSK, based in London and with U.S. headquarters in Philadelphia, referred the media to a statement it released last week in which it said, in part, that it stands by its product and that "the suggestion that GlaxoSmithKline has placed patients at risk and attempted to silence independent investigation of data is absolutely false."

A spokeswoman did confirm a published report that it plans to "expand" its advertising to physicians with respect to Avandia, and that it is considering a consumer campaign. Many pharma companies have quickly churned out public-relations campaigns in the wake of negative product news, such as Sanofi-Aventis did last year after reports surfaced that some users of the sleep medication Ambien were binge eating. GSK's professional advertising is handled by Interpublic Group of Cos.' FCB Healthcare and Torre Lazur McCann.

Avandia had $2.8 billion in sales in 2006 according to GSK, representing almost a third of the $9.8 billion market. That trailed only the $12 billion cholesterol market, according to a report issued by healthcare consultancy Medico Health Solutions, Overland Park, Kan. And, because of aging baby boomers and the rise in obesity, Medico predicted an increase in diabetes drug sales of 60% by 2009.

Turning up the heat
In a research note, Bank of America analysts wrote that while they agreed with GSK that parts of the New England Journal of Medicine report had scientific weaknesses, they also noted that "we believe negative publicity associated with the article and its accompanying editorial will place significant commercial pressure on the franchise."

GSK spent $25.6 million in measured media on Avandia in 2006, according to TNS Media Intelligence.

The Food and Drug Administration issued a safety alert for the drug but has not asked GSK to add warning labels to Avandia or pull it from the market. In the last 30 months, three major drugs have been pulled from the market -- Merck's Vioxx, Pfizer's Bextra and Novartis' Zelnorm -- representing a combined $4.6 billion in yearly sales and $100 million in annual ad spending at the time of their removal.
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