PROZAC AND PAXIL

1. What was the value proposition of the early antidepressants (the MAOIs and the tricyclics)? Was
the value proposition of Prozac similar to these early antidepressants, or different? How was the
value proposition of Paxil differentiated from that of Prozac?

Value proposition of the early antidepressants

The early antidepressants (the MAOIs and the tricyclics) had the advantage of early movers in
the market and they operated in market with no competition.
As quoted in case, there were about 10 million American adults (app 5% of population) suffered
from major depression. The early anti-depressants had the opportunity to capture this market.

In 1988, when other antidepressant drugs were introduced (Prozac), the total number of
prescriptions for all antidepressants in the U.S. was 40 million, out of which 2.5 million were alone
of Prozac. The rest of prescriptions i.e. app 37 million were being addressed by the early
antidepressant drugs only.

One of the value propositions was that these drugs aimed to cure the depressions of above
mentioned target segment. As quoted in the case Both types of antidepressants work by
increasing the levels of two related chemicals in the brain, serotonin and norepinephrine, which
carry nerve signals through the nervous system and are believed to be associated with mood.

These drugs were believed to alleviate the symptoms in almost 60-80 percent of the cases which
was a substantial claim to support their offering.

Value proposition of Prozac similar to early antidepressants?

The value proposition of Prozac was different from the early antidepressants. All the early anti-
depressants had the risk of severe side effects and their intake was difficult to administer.

When Prozac came in market, it addressed the existing issues of early antidepressants. Following
were some of the key value propositions of Prozac which clearly differentiates it from those of
early antidepressants.

1. Clean Drug: Prozac had the goal of developing a Clean Drug which focused exclusively
to increase only the serotonin levels in brain and not affecting anything else. In this way,
it also minimized the drugs side effects.

2. Difficult to Overdose: Since the drug Prozac was difficult to overdose, it was looked upon
as a safer option for the potentially suicidal patients.

3. Easy to Administer: Prozac was also easy to administer as compared to others early
antidepressants. A single daily dose of one or two 20-milligram capsules was generally
sufficient for most patients.
 4. Not serious side effects: Prozac did have some side effects which included jitteriness,
insomnia, nausea, loss of libido, and weight loss but none of them were considered
serious.

5. No need of Medical Supervision: Prozac did not require medical supervision unlike early
antidepressants and so was a good alternative for general practitioners who were
reluctant to send patients to expensive specialists.

6. Off-Label: Prozac was also used to treat the other disorders such as OCD and panic
disorders. The extended usage of Prozac was used to treat problems such as smoking,
alcoholism, bulimia, and even kleptomania.

Value proposition of Paxil differentiated from that of Prozac

Paxil was initially positioned as an alternative to Prozac targeting mainly individuals who were
concerned about the long term side effects of Prozac.

One of the key value proposition of Paxil was Treatment of Social Anxiety Disorder (SAD). It was
estimated that some five million American adults (3.7% of the adult population) were
thought to suffer from SAD. This was one of the untouched segment which Paxil targeted and
was the first and only medication to win US Approval for SAD.
In addition, Paxil did the public awareness campaign along with educating reporters, consumers
and physicians.

While there were many similarities among the value proposition of Paxil and Prozac, the
treatment of SAD by Paxil was one of the key differentiators.

2. Why did the early antidepressants (the MAOIs and tricyclics) fail to achieve widespread
acceptance in the market? What factors accounted for the success of Prozac? What factors
accounted for the success of Paxil?
Failure of early antidepressants
There were 2 types of antidepressants that were used to treat clinical depression namely
tricyclics (e.g., Imipramine, Elavil, and Tofranil), and monoamine oxidase inhibitors, or MAOIs
(e.g., Nardil, Parnate).
The early antidepressants failed to achieve widespread acceptance in the market due to the
following reasons:
1. Side effects: Even after the proper dosage has been achieved, tricyclics tend to bring on side
effects such as weight gain, extreme sluggishness, constipation, urinary retention, and
disturbances in heart rhythm and blood pressure.
 The MAOIs also carry the risk of severe side effects which included headaches and high blood
pressure. The MAOIs can also be deadly if mixed with common foods. Because of this, both
the tricyclics and the MAOIs are generally only prescribed to people suffering from the
severest forms of depression.
2. Promotions stopped after being off- patent: Tricyclics and MAOIs were off-patent; as a
result, they were not being promoted or detailed energetically. This resulted in low
awareness about the product and its usage.

3. Poorly understood: Patients would accuse Psychiatrist of hostility, of unconsciously wanting

to poison them. If they did take medicine, patients would spend long sessions on the couch
complaining about how the analyst had made them constipated.

4. Tricky to administer: Although both the drugs have shown to be quite effective in clinical
trials and are believed to eliminate symptoms of depression 60% to 80% of time, both the
drugs are tricky to administer. Tricyclics do not work if taken in quantities that are too small,
but can be toxic if taken in quantities that are too large.
Success of Prozac
Prozac was introduced in 1988 by Eli Lilly & Company (Lilly). Prozac was expected to earn no more
than $70 million in sales. However, about 2.5 million prescriptions of Prozac were filled and global
sales reached $125 million. The following year sales jumped to $350 million which was more than
combined total spent on all antidepressants on the market just 2 years earlier. By 1992, the
number of Prozac prescriptions being filled was closing in on 10 million a year, and by the end of
the decade, Prozac accounted for almost a quarter ($2.6 billion) of Lillys global sales and more
than a third of its global profit. The below are the various factors that contribute to the success
of Prozac:
1. Detailing Tactics: Detailing is referred to the practice by which pharmaceutical sales
representatives (and in some cases, supporting medical staff) made face-to-face sales visits
to doctors and other healthcare providers to market new and existing products.

2. Sales Force Education: Lillys sales force educated itself about modern psychiatric practices,
in particular the global trend toward psychopharmacology.

3. Efforts towards Psychiatrist: Lilly directed its sales efforts toward psychiatrists, particularly
those who were major prescribers and opinion leaders in this area.

4. Efforts towards general practitioners: After Prozac had been on the market for several
months, Lilly began diverting more of its detailing efforts toward general practitioners rather
than limiting its efforts to psychiatrists. Lilly was able to position Prozacwhich did not need
to be accompanied by constant medical supervisionas an appealing alternative for general
 practitioners who were reluctant to send patients to expensive specialists. By 1989, it was
estimated that over 60% of prescriptions resulted from a visit to a primary-care physician or
non-mental health specialist.

5. Educating general practitioners: Lilly also sponsored massive educational efforts directed
toward general practitioners. After the American Medical Association found (in 1990) that
nearly 46% of family doctors were unable to diagnose depression correctly in their patients.

6. Removal of stigma: Lilly long with several professional organizations set out to stimulate
appropriate diagnoses and help remove the social stigma of psychiatric disorders. By all
accounts, the strategy worked; by 1990just two years after its introductionthe positive
word-of-mouth about the drug had taken on a life of its own.

7. Listening to Prozac: Kramers publication Listening to Prozac further boosted the sales of
Prozac. Kramer concluded that Prozac was not only effective at treating depression, but was
also effective at transforming the personalities of its users for the better, giving them more
confidence and greater feelings of self-worth. These factors helped Prozac became not only
a popular drug but a socially acceptable one as well.

8. Direct to customer advertising: In 1997, the FDA had issued new guidelines that allowed drug
companies to air broadcast advertisements that did not contain reams of information about
a drugs possible side effects. This relaxation of strictures on information and disclosure had
paved the way for more high profile branded DTC advertising by pharmaceutical companies;
Lilly was one of the first to take full advantage of the less stringent guidelines.

9. Off Labeling: Prozac began developing a reputation for being effective at treating other
disorders, such as obsessive-compulsive disorder (OCD) and panic disorder. The drug was off
labelled and physicians felt comfortable with the side effects associated with the drug. Thus
the drug was also used for the treatment of problems like smoking, alcohol, bulimia, and even
kleptomania.

10. Increase in sales calls and a 30-minute infomercial: As Prozacs market share began to
decline, Lilly once again fought back, this time by increasing sales calls on doctors by 25% in
1999. Lilly also produced a 30-minute infomercial to air on local and cable television stations
in the middle of the night and on weekends. The infomercial, aimed primarily at women,
included testimonials from people who had benefited from Prozac.

11. Multipronged Strategy: By 2001, the market landscape had changed considerably from the
time Prozac had first been introduced. For one thing, Prozacs patent was set to expire in
August 2001, and it was unclear how Lilly and its competitors should adjust their marketing
strategies. Lilly adopted a multipronged strategy that adopted the following elements: the
 development of new delivery method for Prozac, The repositioning of Prozac for new
indications and the development of new antidepressants.
Success of Paxil
In 1993, SmithKline Beecham released Paxil (paroxetine) which was an antidepressant called
SSRIs (selective serotonin reuptake inhibitors) because they selectively increased serotonin
levels in the brain. Paxil was originally positioned as an alternative to Prozac, particularly for those
individuals who had trouble tolerating Prozac or were concerned about Prozacs long-term side
effects. The following below are the various factors for the success of Paxal:
1. Heightening public awareness of SAD: In May 1999, Paxil received approval from the FDA for
a new disorder: the treatment of social anxiety disorder(SAD). SAD had been defined as a
condition in which sufferers avoided situations that made them anxious. Some five million
American adults were thought to suffer from SAD. Cohn & Wolfe (PR Agency) decided the
best way to do this was by heightening public awareness of SAD, a disorder that most people
viewed not as a serious medical condition but as a form of shyness. The marketing plan
involved educating reporters, consumers, and physicians about SAD in order to encourage
diagnosis and treatment.

2. Aggressive media campaign: The agency launched an aggressive media campaign featuring
video news releases and press kits. In May 1999 alone (the month Paxil was granted FDA
approval for SAD), the campaign resulted in over 400 million mentions of social anxiety
disorder in the national and local media. Social anxiety disorder was also featured
prominently in prestigious news publications as well.

3. Direct to customer advertising: SmithKline Beecham supplemented the public relations

campaigns with a direct-to-consumer advertising campaign. From May through December
1999, SmithKline spending on DTC advertising went from zero to $31.5 million; 70% of this
was directed at television (e.g., shows such as Ally McBeal) while most of the remainder
was spent on magazine advertising (e.g., Rolling Stone). In contrast, just a million dollars was
spent on advertising in medical journals.
The message in the DTC advertisements focused almost exclusively on social anxiety disorder,
rather than the drug (Paxil) itself. Some of the advertisements referred consumers to websites
where they could complete a diagnostic self-test to determine whether they might be suffering
from social anxiety disorder.
In 2000, SmithKline Beecham merged with Glaxo Wellcome to become GlaxoSmithKline (GSK).
That year, GSK increased the DTC advertising budget for Paxil to over $90 million, and global sales
of Paxil picked up.
4. Reduced Cost: As per Exhibit 6 of the case study, the cost of Paxil for 30 days prescription
was the lowest at $65.70. Due to this Paxil benefited the cost advantage over its competitors.