Wednesday, February 17, 2010

Lilly's Cialis meets with success, challenges

It was a Super Bowl commercial that raised eyebrows around the country.
Six years ago, Eli Lilly and Co. introduced its new erectile dysfunction drug to a national audience with a 60-second spot that showed middle-aged and elderly couples snuggling and flirting, and relaxing in side-by-side bathtubs at sunset. A voiceover said: "Cialis. Are you ready?"
Then, in a line that would be the parodied by late-night comedians, the announcer rattled off a long list of possible side effects, including erections lasting longer than four hours.
The commercial generated a flood of complaints, many from parents who called the topic inappropriate for a show viewed by millions of children.
Despite the complaints, Cialis quickly became a household name, and demand remains so strong that Indianapolis-based Lilly has been able to double the price of the drug since its launch in 2003, to about $16 a pill. Last year alone, during a recession, Lilly increased the price of Cialis twice. Competitors, including Pfizer (maker of Viagra) and GlaxoSmithKline (maker of Levitra), also raised prices.
But now Lilly faces new challenges to keep sales robust. Several other companies are developing new ED drugs, and some analysts think at least one will hit the market this year or next. Meanwhile, Viagra will lose its patent exclusivity in 2012, which will allow competitors to introduce low-priced generic versions. Such a move could pull down prices for the entire category, some analysts say.
The challenges will require Lilly to respond by finding new ways to promote Cialis' distinctive features, without offending some people who find the subject not fit for polite conversation.
At the same time, it has to keep the message light and even entertaining, for fear of being lost in the commercial din. Already, Cialis is one the top drugs in the nation in terms of money spent on direct-to-consumer advertising.
"At a certain point, advertising reaches a point of declining returns, and you've lost your audience," said Les Funtleyder, a drug analyst at Miller Tabak & Co. in New York. "I think by now, most people know what Cialis is and what it does."

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