PropeciaCase Summary

Case Summary Company Background Merck & Co. Inc is a pharmaceutical powerhouse now that develops, manufactures and markets a broad range of human and animal health products. It was the world's largest pharmaceutical company, employing 70,000 people worldwide. In 1997, Merck expected to exceed $23 billion in sales, two-thirds of which were for human drug therapies. Propecia Finasteride, the active compound originally developed by Merck to treat enlarged prostate was found to be effective in treatment of Male Pattern Hair Loss (MPHL). Key points to note about the product - A hormone called dihydrotestosterone causes miniaturization of the hair follicle and shortening of the growth phase of the hair shaft - Finasteride blocks the conversion of testosterone to DHT thereby stopping the deterioration of hair follicles. Clinical trials show 83% of participants at least maintained their current hair count i.e. no net hair loss. 66% of men who took Propecia experienced visible hair growth within the first year. Side effects include - sexual side effects in men, birth defects in male foetuses if ingested or absorbed through skin of pregnant women Market Hair loss market accounts for $1.5 billion in annual sales. Competitor Rogaine, the only option approved by FDA to treat hair loss, a lotion to be applied to the scalp. 50-60% market share as compared to generics. 95% brand awareness. It is soon going to launch an extra-strength version of the therapy. Marketing Prescription Drugs Prescription Drugs can be marketed in 2 ways - i) Marketing Directly to Patients - this uses advertisements. The Ad copy is restricted as per FDA regulations. There are 3 possible routes the ads can take. ii) Marketing to Physicians - this involves medical reps who are responsible to detail the physicians about the products. Issues to be Resolved Hair Loss is a consumer-activated problem and thus, there lies a huge opportunity for direct-to-consumer marketing. Merck, a physician marketing expert, however, has no experience in consumer marketing and thus, a lot rides on the success of the strategy. 1) What type of advertising to use? 2) How should the product be positioned? 3) How much detailing support is needed?
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