Glaxo Wellcome is using the Internet to conduct virtual sales calls with physicians who refuse to see sales reps.

"We have right now over 1,000 high-prescribing 'no-see' physicians - who don't see sales reps - online with us" via video hook-ups in their homes or offices, Glaxo CEO Robert Ingram told an analysts briefing on the Glaxo SmithKline merger in New York City Jan. 18.

"They come online with us [and] talk with us face to face. They can get samples. They can get whatever they want," Ingram said. "The early prescription data tracking on that says that our market share, in terms of prescriptions coming from those high prescribing 'no-see' doctors, is four times what is was before we began that."

Ingram cited the program as one example of the ways in which the Internet can be used to strengthen pharmaceutical marketing.

Glaxo and SmithKline are especially emphasizing the importance of the Internet as a direct conduit to consumers.

"The great advantage of the Internet" is that it offers "a means to enter into a meaningful dialogue with patients," SmithKline President Jean-Pierre Garnier said. Garnier is CEO-designate of Glaxo SmithKline. Ingram will be president and head of pharmaceuticals for the new company (¹ Also see "Glaxo SmithKline U.S. Marketing Could Reach 250,000 MDs In One Week" - Pink Sheet, 24 January, 2000.).

Access to health information is "the number one reason why people get onto the Internet in the first place," Garnier observed. "They want to make sure they are doing everything they can. So this is a field where the opportunities are tremendous."

DTC advertising on television is a "shotgun approach" that involves "a lot of waste," SB CEO Jan Leschly added. "I'm convinced that over the coming period of time you will see direct-to-consumer advertising through the Internet."

Leschly's enthusiasm for the Internet as a new venue for pharmaceutical promotion is such that he is planning to move directly into that field when he retires from SmithKline in April (² Also see "Jan_Leschly.Com?" - Pink Sheet, 31 January, 2000.).

In international markets where DTC advertising is not allowed, the Internet can still play an important consumer education role, Garnier added.

The Internet "is empowering the patient to enter into a dialogue with the doctor to discuss which drug is appropriate for him or her. We as a pharmaceutical company, with the necessary skill set, are able to enter into meaningful exchanges with communities of patients through the Internet," Garnier said.

Both Glaxo and SmithKline have a number of consumer websites set up to reach U.S. consumers.

Glaxo's websites include the "Healthy Lives" newsletter site with health information relating to a number of medical conditions. Recently added pages discuss influenza and irritable bowel syndrome, two new disease areas for Glaxo.

The company has sites devoted specifically to Flonase, Imitrex, Valtrex, and Zyban. Other sites support Glaxo's franchises in asthma ("Asthma Control Program"), migraine ("HEADtalk"), HIV ("The HIV Resource Center", influenza "The Influenza Resource Center" and depression ("Intimacy & Depression"). Glaxo also sponsors disease resource centers on iVillage's health channel (³ Also see "Glaxo "Kick Butt" Challenge Sponsorship Puts Zyban On iVillage" - Pink Sheet, 25 October, 1999.).

SmithKline Beecham's product-specific sites include ones devoted to Lymerix, Paxil and Avandia. The company sponsors "Cafe Herpe," a website for genital herpes patients. The company also produces "SB Healthcast," a website providing information about a number of diseases.

SmithKline's consumer business will enhance the combined company's ability to take advantage of the Internet, Garnier maintained.

"In our company, the consumer folks are much more on the ball there than the typical pure pharmaceutical person, because the applications are more complicated" for prescription drugs, Garnier said. "There are more regulatory hurdles, but nevertheless, there is tremendous potential."

As an example of a potential fit between the two businesses, Garnier pointed to the smoking cessation market, where Glaxo markets the prescription product Zyban and SB sells the OTC nicotine replacement therapies Nicorette and Nicoderm.

"We provide basically 100% of the alternatives," Garnier said. "We can finally do more than just blindly advertise." Using the Internet, "we can tailor the treatment to the characteristics of the patient."

Glaxo SmithKline does not intend to use the Internet as a means to sell products directly to consumers, Garnier added. "Until further notice, we will not sell drugs directly to the consumer through the Internet. We have to of course stay flexible and see how this develops."

Glaxo SmithKline intends to keep its foothold in the OTC business, Garnier indicated. Glaxo's on-again/off-again involvement in the OTC market in the 1990s made speculation about the plans for the SB consumer products business an inevitable question for the companies.

"We have 85% of our combined sales in prescription drugs," Garnier observed. "We want both businesses to prosper and, more importantly, we want both businesses to help each other."

The value of consumer marketing skills is becoming an important theme in merger and acquisition activity in the pharmaceutical industry, most prominently in Procter & Gamble's short-lived consideration of a $140 bil.-plus bid for Warner-Lambert and American Home Products (⁴ Also see "P&G Merger Talks May Herald Next Step In Consumer-Focused Rx Marketing" - Pink Sheet, 31 January, 2000.).

"The consumer skill set is very important to the pharmaceutical marketing effort," Garnier said.

The economies of scale implicit in the Glaxo SmithKline combination will help the company step up its investment in consumer advertising, Garnier said.

"Many of the companies that have already invested 32%-33% of their sales dollars in promotions are not in a position to suddenly make an extra effort to the consumer," Garnier commented.

In addition to the beneficial effects of the consumer business on the pharmaceutical side, Garnier noted that "the pharmaceutical pipeline can provide great Rx-to-OTC switch opportunities."

"The difference between a prescription product and an OTC drug is that OTC drugs live forever," Garnier said. "Just go to your pharmacist and you will see some brands that are there and have been very healthy for 20, 30 years. If they are good products they can last forever."

"This is the creation of value that we can execute by switching some of our prescription products that are coming near the end of their [patent] life to give them new life as OTC medicines."

"Relenza would be a terrific OTC opportunity for the consumer," Garnier declared. "In the future we will consider it."

Other drug classes Garnier listed for potential switches included allergic rhinitis (Glaxo's Flonase may be a likely candidate), inflammatory bowel syndrome (Glaxo's Lotronex), herpes (Glaxo's Valtrex, SmithKline's Famvir), migraine (Glaxo's Imitrex and Amerge) and anti-inflammatory drugs (SmithKline's NSAID Relafen, Glaxo's dermatological ointments).

Both Glaxo and SmithKline participated in the switch of the H2-antagonist class to OTC with Zantac and Tagamet. Flonase, Relafen and the dermatological products all look like relatively straightforward switch candidates if the company opts to pursue them.

Attempts to move into new OTC categories like IBS, herpes, migraine and influenza, however, may pose more difficulties. Both companies have recent experience with the challenges of trying to persuade FDA to accept an antiviral switch.

Glaxo's Zovirax genital herpes switch application was rejected in 1995. SmithKline is still pursuing a switch for the cold sore treatment Denavir after receiving a "not approvable" letter in 1999.

Glaxo SmithKline Sees Consumer Internet Experience Helping Rx Strategy

More from Archive

More from Pink Sheet