THE WAR OF THE PILL
At stake is a vast market--women on the verge of menopause
When Nancy Rosenblum's doctor suggested she go back on the Pill, the 47-year-old San Francisco artist hesitated. She had been off the Pill since the 1970s, when health scares drove many women to other methods of birth control. But then she changed her mind. "I hated the diaphragm," says Rosenblum. The Pill would deliver peace of mind, she figured, and smooth the way to menopause.
Rosenblum is the kind of customer craved by makers of the Pill, which is facing a midlife crisis of its own. Demographic changes are eroding its prime market of twentysomething women, while sterilization is increasingly popular. Marketers earn their fat 30% profit margins via drugstore prescriptions, which account for more than 70% of the $1 billion-a-year market. And drugstore prescriptions for the Pill last year slipped 4.9%, to 50.8 million, according to prescription-tracking service Walsh America-PDS.
With their profits imperiled, a war is heating up between rival Pill companies. Small players are grabbing share from the giants, big players are suing one another, and salespeople are pounding on doctors' doors. "The pressure is intense," says Dr. Leon Speroff, professor of obstetrics and gynecology at Oregon Health Sciences University and an adviser to Parke-Davis, Warner-Lambert Co.'s drug division. "These people are coming around all the time."
Drugmakers never discuss their costs, but it's clear that in this fight they're heavy. One big expense is product development, which involves almost all the marketers. When Johnson & Johnson's Ortho Pharmaceutical Corp. tried to roll out Ortho-Cyclen, a new Pill with reduced side effects, it was stopped until 1994 by a successful patent-infringement lawsuit from the Wyeth-Ayerst Laboratories Div. of American Home Products Corp. Court papers detail how Ortho spent $50 million developing Ortho-Cyclen, budgeted an additional $10 million for marketing, and planned to give away 25 million pills.
Wyeth is another big spender. Last year, when it rolled out Norplant--six phased-release capsules implanted in a woman's arm--it trained 25,000 doctors in the procedure and sent 50,000 more physicians free teach-yourself kits, complete with videos and simulated arms. Norplant's edge is convenience, and it's enough: After 16 months on the market, it has rolled up $120 million in sales.
NEW PROSPECTS. Since only about 14% of Pill users are over 35, Ortho, Wyeth, and many smaller marketers are also targeting older women. "You have to convince the women over 35 to take the Pill to keep the market in a growth pattern," says John Marino, Parke-Davis' associate product manager of female health care. Until 1990, that was an unworkable strategy, since the Food & Drug Administration, citing heart disease risks associated with the Pill's estrogen content, discouraged women over 40 from taking it. With the advent of lower-estrogen versions, the FDA reversed its decision for nonsmokers.
Now marketers freely peddle the Pill to women in "perimenopause," the decade preceding menopause. Researchers recently defined this phase as being marked by greater menstrual irregularity and a decline in certain hormones. The concept is a boon for marketers, since the Pill insures menstrual regularity--a plus for women in their 40s who might worry that a skipped period signals an unwanted pregnancy. Parke-Davis, for example, runs ads for its Loestrin 1/20 as a Pill for the "contraceptive needs of the perimenopausal woman."
In fact, marketers increasingly stress side benefits. In literature distributed to doctors' waiting rooms, Wyeth lists 10 of the Pill's attributes uncovered by researchers, including lighter periods, easing of cramps, and some protection against ovarian and endometrial cancer and pelvic inflammation. Researchers also contend that the Pill lowers the risk of cardiovascular disease and slows age-related bone loss. In March, researchers at an Ortho-funded seminar talked up the Pill's health-preserving powers. The Pill's champions insist such benefits offset long-standing concern about a higher risk of breast cancer among longtime Pill users. The FDA allows these health-related claims but still mandates that cancer risks be cited in all labeling.
All these efforts have yielded gains. Ortho says Pill use among women between 40 and 44 has doubled since 1990, to 700,000, although that's only 8% of all users. Overall, the Pill is still used more often than condoms or diaphragms. A survey by Ortho says 28% of all women between the ages of 15 and 50 chose the Pill in 1991, up from 24% in 1988. But that figure includes oral contracep-tives dispensed at low-cost, nonpharmacy outlets, such as Planned Parenthood clinics.
`PRESSURE.' The competition has taken a toll on top-ranked Ortho. With total sales of about $400 million, the J&J division has seen its share of new prescriptions drop from 40% in 1989 to about 35% (chart, page 71). "We have felt some pressure," admits Brandon L. Clark, Ortho's product management director.
The Wyeth-Ayerst suit has cost Ortho up to $200 million in additional sales. But little players have done their part. A low-price strategy pursued by Berlex Laboratories Inc., a unit of Germany's Schering, has boosted its market share. Parke-Davis has gone from 4% in 1989 to 6% now, thanks to its shrewd peddling of its ultra-low-estrogen Pill as suitable for older women. And with its sales force outgunned more than 3-1 by Ortho and Wyeth, Parke-Davis gained an edge in credibility by using a sales staff mostly made up of trained OB-GYN nurses.
Ortho is hardly giving up. Besides pouring funds into promising research, such as injectable hormones and long-acting contraceptive vaccines, it is still fighting the court order blocking Ortho-Cyclen. And it has teamed up with Organon Inc., an American unit of Dutch drugmaker Akzo Pharma, to seek U.S. approval for another new Pill, which now dominates the European market.
With new prescriptions dropping off, it's clear marketers have a way to go before they fully reinvigorate their product. And some executives sense marketing can only do so much. "To get the market going again, you're going to need some breakthroughs on the research side," says Paul E. Freiman, chief executive of Syntex Corp., another maker of the Pill. Such breakthroughs are probably years away. And even then, few innovations are likely to prove as revolutionary as the Pill itself once was. But Pill makers aren't asking for a youthful revolution--just a nice stretch of prosperous middle age.Joseph Weber in Philadelphia, with Alice Cuneo in San Francisco