Case Analysis: Propecia

Group 10

Ataul Karim (P16005), Justin Fernandez (P16018), Sahil Jain (P16022), Rishi
Kharbanda(P16028), Mainak Pradhan(P16042)

Background

Consumer: The market for Propecia formed consumers who were suffering from MPHL (Male Pattern
Hair Loss). MPHL was prevalent in 30-40 million American men. Ethnicity was also a factor for having
MPHL or not, with 50% of Caucasian men under the age of 50 experiencing MPHL. Considering 35
million men suffering from MPHL, 23.4 million considered it to be a problem out of which 11.7 million
considered it to a future problem.

Company: Merck & Co. Inc. was founded in 1668 by Heinrich Emanuel Merck as a small family
business in 1668, since then it has grown by leaps and strides. Merck currently is the largest
pharmaceutical company employing 70,000 people worldwide. In 1997 Merck was expecting a net
revenue grossing $23 billion, out of which two-third was realized from human drug therapies.0

Competitors: Merck was contemplating to launch Propecia in January 1998 which was targeting the
large hair loss market of about $1.5 billion, major indirect competitor for the product included Hair
Replacement Surgery, Mechanical Solution. The direct competition in pharmaceutical products came
from Rogaine (minoxidil) a product from Upjohn is a Topical intervention. 1

Category Competitor Brand Company Mercks Brand

Cholesterol Pravachol Bristol-Myers Squibb Zocor,Mevacor
Anti Ulcerant Prilosec AstraZeneca Pepcid
Cholesterol Lowering Lipitor Pfizer Zocor

Context: The new drug application for Propecia was filed in 1996 and Merck is expecting to launch
Propecia to take place in January 1998, Merck also was planning to launch products for the category
including asthma, migraines, acute coronary syndrome and glaucoma in the year 1998. Propecia
represented a major breakthrough in the treatment of MPHL. In clinical trial Propecia proved 83%
effective in clinical studies for its ability to maintain current hair levels, it also has caused hair regrowth
in two-thirds of men.

Decision Statement

What type of advertising with what type of message should Mr. Casola run after the launch of Propecia so
that it should convey to potential consumers properly? Should the company invest money to market to
dermatologists or should go to DTC advertising?

Alternatives and its Evaluation

Alternatives Positive Aspect Negative Aspect

Help seeking A help seeking add asking customers to ask It is an unbranded advertisement
ads their physicians/dermatologist for a pill to Customers might think mistakenly that the
address hair loss condition would create advertisement is for Rogaine.
brand
Propecia is the only product which comes in a
pill to address the hair fall issue
Direct to The potential market for Propecia is almost half The health insurance plans do not cover the cost for

1 Prepared from Cross Referencing Exhibit-1 and Exhibit 8

 Consumer the male population so reaching out to them medication for hair loss.
advertisemen through advertisement would create product FDA norms and regulations for advertisements to be
t awareness. complaint to.
Market to Dermatologists are more likely to see patients Sales representatives needs to be trained as Merck
dermatologist who are concerned about hair loss so has never marketed any product for dermatologist
dermatologists could suggest Propecia to Sales representatives would get only few minutes to
them convey the message of Propecia.

Recommended Action

The company should advertise through help-seeking ads and doctors and dermatologists play a vital role
in reaching Propecias target consumer. Propecia can be counted as a product for men suffering from
MPHL. Merck needs dermatologist to be supporter of Propecia, as dermatologists are more likely to feel
comfortable talking about hair loss with their patients. Propecia also has risks and side effects. Product
Detailing by companys representatives to dermatologists needs to be informative about teaching the
benefits and side-effects of the product. A detailed brochure about the product could be left with
Physicians and Dermatologists as sales representatives have only few minutes to pitch the product to
physicians and dermatologists. Help seeking advertisement, where Merck urges consumer to visit
Dermatologist if they are suffering from Male Pattern Hair Loss would then play to the advantage of
Merck and not mislead the consumer towards Rogaine.

Outcome of Recommended action

With the recommended action, of help seeking advertisement and detailing done by sales representatives
about the product to Dermatologists will create awareness about the product as well as its advantages and
potential side effects. Mercks help seeking advertisement would encourage male consumers who are in
the early stages of Male Pattern Hair Loss, to seek treatment early because then the product could show
best results.

Case Preparation

1. Identify an appropriate Positioning statement for Propecia

Propecia arrests loss of hair for men in visibly 3 months of medication. Propecia does this by stopping the
deterioration of hair follicle through its unique formulation which is tested and proven in lab. It is an
easy-to-use and effective product.

2. Design a suitable Advertising and Distribution Program based on Positioning.

As Merck has successfully created a product to prevent hair loss in the form on pill which is new to the
world, the awareness of the product in the market would be low in the initial phase. A separate marketing
effort by a dedicated sales force exclusively for the product is recommended. The market potential for
Propecia is high, so in the initial phase the drug should be prescription only. This would need an extensive
detailing support to Physicians and Dermatologist as they need accurate and detailed information before
prescribing a drug. For Physicians, writing a prescription for Hair Loss might not be a priority but for
Dermatologist Propecia would be a good option for patients suffering from MPHL. Merck also needs to
communicate to its doctors and patients about the risk and side effects of using the product. As the
customers get more aware about the brand and its possible side effects, along with the benefits that it
offers, it can be made available in the Over The Counter market.
The option for advertising the product could be through publication in magazines for young men and
through range of programs and publications. The advertisement for the product should generate the right
level of customer expectation, which is hair loss prevention by stopping deterioration of hair follicle.