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An Episode Of Viagra Interruptus


News: Analysis & Commentary: PHARMACEUTICALS

AN EPISODE OF VIAGRA INTERRUPTUS

With fewer insurers covering the cost, sales are slowing

It was bound to happen. Sales of Viagra, the massively publicized little blue pill that corrects erectile dysfunction, reached an early peak and have started falling.

True, it's still a blockbuster drug. Physicians wrote out more than 2 million prescriptions in Viagra's first 10 weeks on the market, and first-year sales could still top $1 billion for Pfizer Inc., its inventor, say market trackers at IMS Health Inc. But that's below what some analysts predicted. "The pent-up demand is drying up, and we're already seeing a drop-off in new prescriptions," says Arvind H. Desai, a partner at researcher OrbiMed Advisors in New York. "Obviously, a good bit of this was experimentation." Desai has trimmed his estimate of annual sales to $700 million, down $150 million from his earlier prediction.

Maybe it's just a sign that summer's here and people are spending more time outside. More likely, the drop was caused by a number of factors--including reports of the deaths of a half-dozen Viagra users as well as such side effects as headaches and blue-tinged vision. And then there's cost.RATIONING. In recent weeks, health-care companies told subscribers they won't pick up the $10-a-pill tab. On June 19 and June 22, giants Kaiser Permanente and Aetna U.S. Healthcare said they won't cover Viagra. A Pfizer spokesman says "it was expected that some would not cover it and others would."

Other companies have said they'll pay for Viagra but will ration the pills--usually, one or two pills a week. Blue Cross & Blue Shield of Illinois, for example, used to let physicians decide; now it limits patients to a six-a-month regimen. Now, insurers cover 41% of Viagra prescriptions, down from around 50% when the drug was first introduced.

The upshot: By June 12, the number of weekly prescriptions had dropped to 233,391, 23% fewer than in the week ending May 8, the drug's peak. New prescriptions were down 40% over the same period, according to IMS Health. Pfizer says that strong initial demand and a blitz of publicity clearly affected early sales, and it's hard to forecast long-term usage."COMMON SENSE." The new limits put on Viagra by insurers and managed-care companies may slow the pill's acceptance even further. The decisions by Kaiser and Aetna on Viagra coverage came in mid-June and won't show up in the data for weeks. Viagra's reputation as a lifestyle drug--an enhancer of sexual function rather than a restorer--didn't help its cause with the insurers. "Our sense was that Viagra was pushing the limits of common sense of what should be covered by a medical policy and therefore paid by everybody," says Dr. Francis J. Crosson, executive director of the Permanente Federation. Kaiser figured it would cost more than $100 million a year to cover fewer than 1% of its members.

Still, Viagra has already set records without too much help. "Insurance may not play a big part in the purchase decision," says IMS Vice-President Gary Friend. "This is not like the treatment for other chronic conditions, where you have to take it every day and there's no instant gratification."

Indeed, the slowing sales may be just a hiccup. There's no question that sales will increase as the drug is approved in Europe and elsewhere. Employers may underwrite supplemental coverage for competitive reasons. And consumers may decide that even at $10 a dose, Viagra is more fun and costs less than going to the movies.By Larry Armstrong in Los AngelesReturn to top

TABLE

How Insurers Cover Viagra

AETNA Not covered

CIGNA 6 per month

KAISER

PERMANENTE Not covered

PACIFICARE Decision pending (not

covered in interim)

PRUDENTIAL Decision pending (not

covered in interim)

BLUE CROSS/ Varies (Blue Cross of

BLUE SHIELD Calif.: 6 per month)

UNITED HEALTHCARE 8 per month

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