Omeprazole opens generics to DTC ads with rebates

April 2, 2004

Direct-to-consumer ads for generics

The first direct-to-consumer (DTC) ad for a generic drug hit the airwaves in mid-2003, but its effect may ripple throughout the industry in the future. Schwarz Pharma's DTC advertisements for omeprazole, which highlighted saving money by switching to the generic version of AstraZeneca's blockbuster drug Prilosec, began July 28, 2003. The campaign included television, print, newspaper, and Internet ads featuring a rebate program. There were no radio ads.

Omeprazole is available through Schwarz Pharma's Kremers Urban Development Co. (KUDco), the U.S. generic drug business of Schwarz Pharma USA. According to the Food & Drug Administration, although KUDco's ANDA was not the first approved generic omeprazole, it was the first approval of a generic omeprazole that did not infringe on patents held by AstraZeneca.

Several companies are now in ongoing patent litigation with AstraZeneca.

Direct to patient

"This was the first time a generic ever had a [DTC] campaign," said Tom Willard, VP of marketing, Schwarz Pharma, Mequon, Wis. "We decided to take this approach because it was an extremely large market, and we were the only generic approved from the court ruling, so we had some leeway.

Also prompting the ad is the fact that patients and doctors did not realize there was a cheaper alternative for a PPI (proton pump inhibitor). Willard explained that because doctors and patients were unaware of the generic version, patients were paying up to a $35 co-pay.

The ad offered a $10 rebate to bring home the message that consumers could stand to save money if they made the switch. The ad also instructed consumers to call a published phone number or go to the Web site ( www.ppiq.com ) to receive a $10 coupon for their out-of-pocket expenses for generic omeprazole. The rebate also could be obtained from a physician. Schwarz Pharma's DTC ad campaign for omeprazole ran from July to December 2003. The rebate was available for the length of the campaign.

Timing and market

The ad and rebate program aggressively targeted the market once held captive by Prilosec, which had sales of $3.5 billion in 2002. "It was a great opportunity for us," said Willard, who added that there was an immediate and positive response to the campaign. "We saw an impact the first week it was launched."

He went on to explain that pharmaceutical companies usually use DTC advertising to hold on to market share. However, omeprazole was a unique situation. "We did a response campaign, as opposed to a direct-to-consumer campaign, which was designed to get people to respond."

The advertisement used numerous filters, which targeted specific people with acid reflux disease who have been on a PPI, for example. Other people not familiar with acid reflux or PPIs might have been confused, but according to Willard, that didn't matter because they were not targeted.

Timing also played a critical role in the omeprazole DTC campaign. "We would not have done this campaign if we were not the first to market generic omeprazole. We were the only firm approved by the courts, and we had some protection, whereas the other two generic omeprazole products launched at risk," Willard said.

Several other versions of generic omeprazole are available at the retail level. Novartis' generic unit Sandoz, Broomfield, Colo., currently sells generic omeprazole in 10-mg and 20-mg dosages under the Lek Pharmaceuticals label. According to a Novartis company spokesperson, Sandoz has no plans for any DTC advertising for omeprazole at this time.

Mylan Laboratories is also selling generic omeprazole 10-mg and 20-mg delayed-release capsules.

Schwarz Pharma does not anticipate conducting another DTC program because it could not be sure that its product would be dispsensed in place of its generic competition.

Industry outlook

Willard pointed out that generic firms usually do not run direct-to-consumer advertising, because they have exclusivity only for six months. However, rebate offers and DTC ad campaigns for generic drugs may mark a coming trend. Ads directed toward specific patient populations that can benefit the most may be seen more frequently in the future, according to Willard.