Robert Steyer

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Pfizer Vows to Revive Viagra

Robert Steyer

Executives of Pfizer said Tuesday that they were disappointed in the sales of Viagra and vowed to take steps to rebuild the impotence drug's market potency.

The comments came during a telephone conference call with analysts after Pfizer reported that first-quarter worldwide sales of Viagra declined 12% to $416 million, while the U.S. sales component sank by 25% to $220 million. Foreign sales rose 8% to $196 million compared with those in the same period last year.

Viagra has been sold in the U.S. for six years, and the drug had a monopoly here for more than five years. Last year, worldwide Viagra sales produced $1.88 billion, or 4% of corporate revenue.

Viagra's first-quarter U.S. performance was "not as well as we had hoped," said Hank McKinnell, Pfizer's chairman and CEO. "I think Viagra will improve in the future," said McKinnell, adding that the company is taking several steps to fortify Viagra's market presence.

One of those steps was announced last week, when Pfizer said some patients can get one free prescription for every six prescriptions that they buy. People eligible for the program include men who pay for the entire prescription or for part of the prescription not covered by insurance. The company is planning other efforts, which the executives declined to discuss.

Pfizer had expected men to try the new impotence drugs, and it expects some men to return to Viagra, said Karen Katen, executive vice president of the company and president of Pfizer Global Pharmaceuticals. She argued that prescription growth for competing drugs has been aided by product giveaways, such as vouchers, which are counted as prescriptions.

McKinnell added that Viagra's foreign market share appears to have stabilized. Competing impotence drugs have been available in many foreign markets for about a year, he said.

Katen added that she was most disappointed by the fact that the U.S. impotence drug market hasn't expanded like the company had expected. "That means we have to slog it out in the market," said Katen, referring to the competing drugs Cialis and Levitra.

Analysts have warned that unless the impotence drug market expands significantly over the next few years, companies could get locked into a vicious marketing war in which rising advertising expenses chew up profit margins. But their concerns have focused on the new drugs rather than the market leader.

Cialis was developed by the Bothell, Wash.-based biotechnology company Icos and is being marketed with Eli Lilly.

Levitra was developed by Germany's Bayer and is being marketed with another multinational giant, GlaxoSmithKline.