Pfizer Inc.'s Lipitor: The Celebrity Endorsement Controversy

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Case Details:

Case Code : MKTG191
Case Length : 23 pages
Period : 2006-2008
Pub Date : 2008
Teaching Note :Not Available
Organization : Pfizer, Inc.
Industry : Pharmaceutical
Countries : USA

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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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Excerpts

Background Note

Pfizer was founded by Charles Pfizer (Charles), a chemist, and his cousin Charles Erhart (Erhart), a confectioner, in Brooklyn, New York, US. The company, which was initially called Charles Pfizer & Company (CPC), was set up in 1849, a year after the duo's arrival from Germany. The first medicinal product from the company was Santonin, a palatable anti-parasitic. In 1862, during the American Civil War, Pfizer increased the production of its chemicals and drugs, which doctors of the Union Army used to treat wounded and sick soldiers. The company moved to larger premises on Maiden Lane in the Wall Street area of Manhattan in 1868 and the production of citric acid in the 1880s initiated its growth...

History of Lipitor

The search for drugs that could contain cholesterol production in the body began after the link between heart disease and hypercholesterolemia was established in the 1950s. Scientists discovered that an enzyme in the body known as HMG CoA reductase helped in converting a compound, HMG CoA, into another compound that was a precursor to the development of cholesterol. Researchers found that high levels of Low Density Lipoprotein (LDL) increased the risk of heart attack, while high levels of High Density Lipoprotein (HDL) were found to be protective...

The Big Challenge

In the mid-2000s, one of the biggest challenges for Pfizer was to grow its cash cow further. But this was easier said than done. While the class of 'cholesterol and triglyceride reducers' was the biggest therapy class of 2005 with an estimated global sales of US$ 32.6 billion and growth of 7 percent (according to IMS MIDAS Quantum), the market was very competitive. The major brands competing in the market were Lipitor, Zocor, Vytorin, Crestor, and Zetia, (Refer to Figure III for the four leading statins of 2005 by revenue). All the other brands were trying to nip at the market share of the leader Lipitor...

A Controversial Campaign

In what was viewed as a strategic move to counter these problems, Pfizer started a new print and television ad campaign for Lipitor in April 2006 featuring Jarvik. The ad was a DTC educational campaign that discussed the advantages of better cardiovascular health and the benefits of Lipitor (Refer to Exhibit V for some ads of Lipitor featuring Jarvik). The ad campaign was designed by Pfizer's new ad agency The Kaplan Thaler Group (Kaplan) as part of a larger campaign. The ad campaign was the first major campaign where a doctor was paid to endorse a prescription drug. The TV spot showed Jarvik rowing in a tranquil, picturesque lake...

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