Lilly, Icos Offer Free Cialis

Updated from 8:50 a.m. EDT

Competition in the market for erectile dysfunction drugs heated up again Monday as the makers of the No. 2 treatment, Cialis -- Eli Lilly ( LLY) and Icos ( ICOS) -- offered a customer satisfaction campaign.

The companies, which are trying to overtake market leader Pfizer's ( PFE ) Viagra, offered free samples to new customers and also promised to pay for a rival drug if users are not satisfied with Cialis.

Pfizer recently introduced something of a Viagra customer loyalty program. After filling six prescriptions, men can get the seventh prescription free. The program applies only to men who pay for the entire prescription out-of-pocket or for the part of the prescription not covered by insurance.

According to the Cialis offer that starts today, men with erectile dysfunction who have never used Cialis can receive a voucher for a free trial. If they like the drug, they can get a second trial at no charge. On the other hand, if they are not satisfied, Lilly-Icos will pay for a trial of a competing product.

The third entrant in the ED category is Levitra. GlaxoSmithKline ( GSK) is marketing the drug with its developer Bayer ( BAY).

Viagra had total sales of $1.88 billion last year, including $1.1 billion in U.S. sales. Viagra experienced disappointing first-quarter sales, while Levitra has slipped to third place despite a several-month head start over the newest entrant, Cialis.

The three main ED drugs have varying effects while treating the same problem, and the companies have taken radically different approaches to promoting their products.

Lilly's shares rose 45 cents, or 0.7%, to $67.45, while Icos' fell 16 cents, or 0.6% to $24.99. Meanwhile, Pfizer's dropped 46 cents, or 1.3%, to $33.54. Both GSK and Bayer shares also lost ground. GSK shed 64 cents, or 1.6%, to $40.11, while Bayer's slid 33 cents, or 1.2%, to $28.07.

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