Product Team Cialis: Getting Ready to Market

Pfizer developed Viagra in the 1990s. Viagra is an orally used pill to treat erectile dysfunction (ED) for men. The mechanism for Viagra is to temporarily inhibit the phosphodiesterase type 5 (PDE5) enzyme which normally restricts the blood-flow process required for an erection. Developed through the clinical trials and been approved by the FDA on 1998, Viagra was able to improve erection among 80% of the men who suffered from ED. The drug costs about $10 per pill at retail.

In 2002, The Viagra brand becomes monopolist in the ED market and Pfizer has been generating over 1 billion in sales annually for three years. There are also some downsides for the drug. First, Viagra is not safe to take when used in combination with nitrates which used to treat patients with heart conditions. The drug initially caused 130 deaths in patients with cardiovascular diseases by accident. In addition, Viagra is not able to meet the expectation for men with ED condition. Its effect only lasts for approximately 4hrs after dosing.

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Cialis: New Competitor or Substitute? Due to those disadvantages of Viagra, the pharmaceutical giant ICOS and Eli Lilly co-developed a novel drug called Cialis for ED treatment. Compared with Viagra, Cialis is more efficacious. It improves 81% of the men to respond to sexual stimulation over a period of 36 hrs after taking the drug. The superior efficacy of Cialis over Viagra provides ICOS and Lilly an opportunity for Cialis to initiate a direct “complete” strategy and go head-to-head with Viagra’s position in the market.

Activities For The Launch of Cialis To launch the Cialis more effectively, Lilly management team organizes the Global Marketing Sales Organization (GMSO). GMSO first funnels ideas for research projects and forecast market potential to see whether the Cialis project should be terminated or moved forward. After Cialis gets approved by FDA, GMSO personnel acts like consultants to the product team by providing marketing research resources and assistance in putting together a five-year forecast.

Based on the consultation from GMSO, Lilly organized to create affiliates in different geographical areas with regional responsibilities for promotional, sales and after-sales activities worldwide. Lilly initially sets affiliates in United States and other 5 major countries in Europe, Canada, Australia, Mexico, and Brazil. Lilly would try to penetrate into the local market to try to maximize their profits in those areas and ensure all the parties involved are aligned. Competitive Response from Pfizer and Bayer?

Currently more than 40% of the cost for Viagra is independent payment in United States, France, Germany, Italy, Spain and UK. To better compete with Pfizer, ICOS and Lilly can try to get insurance company to cover the expense for Cialis due to its superior efficacy over Viagra. Also, ICOS and Lilly could start from regions in which Viagra market share is low to gain its position in the market. Since Cialis is a new entrant, from Pfizer’s perspective, they would try their best to improve the market coverage for Viagra to expand their first-mover advantage.

Also, Pfizer could reduce the price of Viagra to try to keep the new entrant out of the market. For Bayer-GlaxoSmith, whose product Levita is similar to Viagra, may go for a niche strategy by targeting diabetic patients with ED specifically. Furthermore, since Levita completed their phase II trial in November 2000, Levita was most likely to be the third drug to be launched on market. Bayer may choose to bring the drug to markets where both Pfizer and Lilly have low market penetration.

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