The Marketing of Statins

The Marketing of Statins

Elizabeth Toby

MKT6210.E1 – Marketing Management

Amberton University

Dr. Jason Geesey

January 7, 2017

The Marketing of Statins

Statins, a cholesterol-lowering class of drug, were previously unheard of before 1987 yet in present day 2017 are a household name.  When statins were first released to the market in 1987, more than 20 million Americans were at risk for a heart attack due to high cholesterol, and by 2003 this number rose to 52 million (Brody, 1987; Jain & Haley, 2014).  The market for an alternative to diet and exercise to decrease high cholesterol levels grew exponentially setting the groundwork for drugs like Mevacor, Zocor, and Lipitor to become that alternative.

Product Introduction and Continued Growth

In 1975, Sankyo, a small Tokyo drug company, discovered mevastatin, the first cholesterol-lowering compound, but rumors about its negative effects, such as tumor growth and muscle deterioration, prevented many companies from further research in to cholesterol-fighting compounds (Jain & Haley, 2009).  However, Merck’s P. Roy Vagelos, chief scientist at the leading pharmaceutical company, did not shy away from the challenge and soon replicated Sankyo’s experiments and by 1978 had discovered a second cholesterol-lowering compound, lovastatin (Jain & Haley, 2009).  By 1987, Mevacor (lovastatin) was available to the market as the first in its class of drugs and was expected to “revolutionize the treatment of high cholesterol levels” (Brody, 1987, p. 1) for more than 20 million Americans.  During the product’s introductory phase, Merck needed to generate profits and churn interest for the innovative new statin.  Merck’s marketing team promoted Mevacor using message repetition by to educating the American people about the dangers of high cholesterol (Jain & Haley, 2009).  Their marketing team also dedicated significant research and development money to prove to doctors the safety and effectiveness of Mevacor.  Soon late-market entrant Pravachol, from a Bristol-Myer-Squibb-Sankyo co-marketing effort, began to crowd the market and capitalized on Merck’s market expansion by patient education (Mayer, 1989).  These late entrants needed little to no promoting savvy to gain entry as the buzz about statins had already taken hold, and market growth was projected to increase (Mayer, 1989).  Pravachol’s secondary strategy, product innovation through tissue selectivity, was not realized until 1992 when researchers released a study showing Pravachol’s effectiveness at targeting the liver tissue (Koga, Fukuda, Shimada, Fukami, Koike, & Tsujita, 1992).  

In a continued effort to better educate doctors about the safety and effectiveness of cholesterol-lowering compounds, in 1994 Merck released the results of the Scandinavian Simvastatin Survival Study (Four-S), a Merck-sponsored study showing that after five years simvastatin reduced cholesterol by 35% and the likelihood of heart attacks by 42% in 4,444 patients with high cholesterol and previous history of heart attacks (Jain & Haley, 2009).  Two years later in 1996, Pfizer-Warner-Lambert (PWL) released a study showing that Lipitor (atorvastatin), their new cholesterol-lowering compound, was more effective at a lower starting dose and was significantly better at reducing cholesterol levels in less time than all other statins currently on the market (Lipitor: Uses, Dosage, Side Effects & Warnings, n.d.; Jain & Haley, 2009).  

The Rise of Lipitor

Pfizer-Warner-Lambert took a full decade to build the framework for their market-entry into the statin drug market.  Ultimately the target audience and distribution channel for all statins is the same: high cholesterol patients and their trusted doctors.  To capture significant market share, PWL devised a marketing plan that would differentiate their product through research and development, targeted promotional efforts, and lower pricing.  Their late entry to the market gave PWL ample opportunity and resources to analyze their competitive market and develop this three-pronged marketing plan.  By 1998, PWL successfully aligned Lipitor as a safer, low-cost, low-dosage, more effective alternative to other statins on the market and had successfully gained 18% of the market (Jain & Haley, 2009).

When the Food and Drug Administration (FDA) approved Lipitor for use in 1997, Pfizer promoted Lipitor through comparison advertising by including a pamphlet summarizing the effectiveness of Lipitor versus current statins on the market in each prescribed bottle of Lipitor and as a part of the sales documents given to physicians (Jain & Haley, 2009). Comparison advertising is a powerful tool that can be used to highlight a product’s significant competitive advantage over the competitor’s and increase brand awareness, comprehension, and preference among consumers (Wilkie & Farris, 1975).  Also, Merck’s Four-S study lifted sales for statins in 1994 so product awareness was no longer an issue for PWL and the company only had to prove their product was better than their competitor.  Late market entry allowed PWL to conduct this comparison study prior to launching Lipitor in the market and provided instant product differentiation through their improved effectiveness over competitors.  

To further develop their marketing plan, PWL held focus groups with doctors and discovered that doctors were still concerned about the long-term effects of high-dose statin usage. No studies had been conducted showing high-dose statins were dangerous, but PWL used the inherently low-dose Lipitor to their advantage. Pfizer-Warner-Lambert pushed the FDA to approve Lipitor for ten to 80 milligrams per day whereas other statins were approved for 20 to 40 milligrams per day.  This psychological marketing gave doctors confidence that if Lipitor was safe at 80 milligrams per day, higher than any other statin, it must be safer at ten milligrams per day (Jain & Haley, 2009).

The final marketing strategy Pfizer-Warner-Lambert employed was a cost-cutting initiative.  Pfizer’s marketing team received additional feedback from doctors and managed care upon which they based their pricing strategy: PWL undercut Merck’s price by almost half.  In 2002 a month’s supply of Lipitor cost $66 versus $120 for Merck’s Zocor, the market leader (Jain & Haley, 2009). PWL set Lipitor’s price to make it accessible for each patient, increasing their target market to include high cholesterol patients previously unable to afford high-cost statins and cost-savvy patients (Jain & Haley, 2009).  Customers were accustomed to high priced statins, thus PWL’s value-based pricing strategy increased the consumer’s perception they were getting a better value because they were getting a more effective statin at a lower price (Grewel, Monroe, & Krishnan, 1998).