Marketing Viagra in India


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Case Details:

Case Code : MKTG130
Case Length : 26 Pages
Period : 1998-2006
Organization : - Pfizer Inc.
Pub Date : 2006
Teaching Note : Available
Countries : India, USA
Industry : Pharmaceutical and Healthcare

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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"We strongly believe that there is an unmet need of the doctors. Patients are actually seeking introduction of the original Viagra." 1

- Kewal Handa, Managing Director, Pfizer Ltd. (PL),2 in 2005.

"I don't think doctors will prescribe Viagra. When we have economical options available, why prescribe the costly one?" 3

- Dr. B.K. Roy, Endocrinologist and Hormone Specialist, Sex and Hormone Center, New Delhi, in 2005.

'Vitamin V' For India

On December 26, 2005, Pfizer Inc. (Pfizer), the largest pharmaceutical company in the world, rolled out its blockbuster drug Viagra (Sildenafil citrate) in India. Viagra, a popular and widely used drug to treat erectile dysfunction4 (ED) in men, is also known by various nicknames such as 'Vitamin V' and 'the little blue pill'.

Pfizer launched Viagra in India seven years after the launch of the drug in the US. The process patent regime 5 prevalent in India at the time the drug was launched in the US made Pfizer apprehensive about generic competition from Indian companies and hence its reluctance to launch Viagra in India earlier.

As a result, various Indian pharmaceutical companies had launched their own generic clones of the drug since 2001.

As of 2005, there were more than 40 local versions of the drug available in the Indian market.

Pfizer also surprised most industry analysts and doctors by pricing Viagra at Rs 594 for a 100 mg tablet and Rs 463 for a 50 mg tablet. And this when most of the local versions of the drug were available at Rs 20 or less (for a 50 mg tablet). Some industry experts felt that Pfizer's launch of Viagra in India had come too late as there were already many local versions of the drug available.

Many doctors too were of the opinion that ED patients did not get any additional benefit out of Viagra, when compared to local versions, to justify its high price. However, despite its late entry and premium pricing, Pfizer was confident of capturing 10%-15% of the ED market in India within the first one to two years of Viagra's launch. The launch of Viagra in India came at a time when the drug's global sales were stagnating. Competitor brands Levitra co-marketed by GlaxoSmithKline plc (GSK) and Bayer AG, and more particularly Cialis developed by ICOS Corp. (ICOS) and marketed by Eli Lilly & Co., (Eli Lily) were eating away Viagra's market share.

Pfizer was targeting India's huge patient pool, as it was a new market that the company could tap to improve Viagra's overall global sales. "India is expected to be a big market for us. It is estimated that about 70-90 million men suffer from erectile dysfunction and this market is only going to grow," said K.G. Ananthakrishnan (Ananthakrishnan), Senior Director of PL. Within two months of its launch in India, Viagra seemed well on its way to surpass its target for the year.

PL reported that Viagra had already cornered a 1.8% of the ED market in India. "We are excited with the response we have received for Viagra. The value that Pfizer brings to the table, with its extensive research and knowledge on erectile dysfunction and its management is reflected in Viagra's excellent performance. Our YTD all India sales are Rs 1.50 crore (Rs 15 million) with Viagra doing well in all the cities we have launched it," explained Ananthakrishnan.

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1] Mrinalini Datta and Paresh Jatakia, “Despite Viagra's Cost, India Beckons Pfizer,” www.iht.com, December 22, 2005.

2] Pfizer Ltd. (PL) is the Indian arm of the global pharma major, Pfizer Inc., USA (Pfizer). Pfizer established its business in India in 1950 and was ranked 8th in India in terms of sales, with a market share of 2.7% of the Indian pharmaceutical industry in 2005.

3] "Counting on the Viagra Brand in India,” www.iht.com, December 22, 2005.

4] Erectile dysfunction is the inability to develop and maintain an erection for satisfactory sexual intercourse or activity. Erectile dysfunction is the preferred term rather than the more commonly used term 'impotence'.

5] Before 2005, India only recognized process patents, not product patents. As a result, Indian companies were free to manufacture and market a copy of the drug as long as the process of manufacturing was different from the original drug.

 

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