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Sleep Pill War Means Late Nights for Ad Makers

Sanofi hopes to blunt the effect of adverse news on its Ambien. Pfizer's expected entry is likely to intensify the jockeying for share.

March 31, 2006|From the Associated Press

NEW YORK — The maker of Ambien has begun a new ad campaign that it hopes will reverse a sales slide triggered by reports that some patients couldn't recall driving or eating while sleepwalking when using the prescription sleep aid.

The campaign by Sanofi-Aventis is likely to be the first salvo in what analysts predict will be a fierce advertising war in the market, which has seen sales drop in the aftermath of the negative news. Ambien is expected to have a new competitor by June, when Pfizer Inc. plans to debut a new pill.

Analysts expect the ads to flood the media, just as commercials for erectile dysfunction treatments did when competitors entered Viagra's market.

"You are not going to be able to watch a television show without seeing a commercial for a sleeping pill," said Jason Napodano, an analyst at Zacks Investment Research.

Pfizer is expected to begin selling a new sleeping pill, known generically as indiplon, with partner Neurocrine Sciences Inc. this summer. It will compete head-on with Ambien and Lunesta, a prescription drug that Sepracor Inc. began marketing 11 months ago as a way for the sleep-deprived to get a good night's rest.

Sleeping pill prescriptions grew 55% to 45.5 million from 2001 to 2005, according to IMS Health, a pharmaceutical market research firm.

Six-month-old Ambien CR, the successor drug to the headline-grabbing medicine, had been steadily gaining market share since October. Unlike its predecessor, Ambien CR is approved to help maintain sleep and for long-term use. But after publicity about the negative side effects for some Ambien users surfaced this month, sales of it and other sleep aids have slowed.

Verispan, which tracks prescription data, reported that in the two weeks ended March 17, total sleeping pill prescriptions fell 9% to 842,561 while new prescriptions declined 8% to 465,233. New Ambien prescriptions fell 12% to 211,902, while Lunesta's dropped 4% to 63,589 and Ambien CR's shed 13% to 61,366.

Ambien CR, Lunesta and indiplon are all in the same class of drugs as Ambien, so there is a chance they may have similar side effects, said Dr. Stasia Weiber, director of the sleep clinic at Mount Sinai Hospital in New York.

Yet even with the negative publicity, many doctors said they were comfortable prescribing Ambien, noting that it has been on the market for 13 years and that the side effects were rare. Sleep specialists said they were aware of Ambien's potential problems.

"I don't think it is a deal breaker," said Dr. Timothy Komoto, a family physician in Minneapolis who acknowledged that he hadn't heard about Ambien's alleged side effects before the reports surfaced.

This month, lawyer Susan Chana Lask filed a lawsuit in federal court in New York alleging that Sanofi failed to adequately warn of Ambien's potential dangers and that the drug caused her clients to enter a trance-like state and engage in dangerous activities that caused various types of damage.

Sanofi spokeswoman Melissa Feltmann said that Ambien was safe and that the company would defend itself against the suit. She said the company had warned of possible side effects since the drug's launch. The prescribing information for doctors lists somnambulism, or sleepwalking, as a rare side effect. People have been known to eat or drive while sleepwalking.

In the coming battle, Lunesta may have the toughest time holding on to insomniacs.

Lunesta's maker, Sepracor, is dwarfed by Pfizer and Sanofi in terms of revenue and resources. Pfizer is the world's largest drug company and Sanofi is third.

Sepracor "should be worried," said David Woodburn, an analyst at Prudential Equity Group.

Massachusetts-based Sepracor spent $215 million last year to advertise Lunesta, according to TNS Media Intelligence. Sepracor wouldn't comment on its future marketing plans.

Ian Sanderson, an analyst at Cowen & Co., said Lunesta's ad spending was more than the company forecast -- and more than twice his estimate. He said that could be a sign that Sepracor was trying to "throw money on the problem" ahead of the increased competition. Sepracor's stock has suffered this month, and analysts said one reason was the competition Lunesta was expected to encounter. Sepracor shares rose 50 cents to $49.09 on Thursday.

Sanofi spent $42 million last year advertising Ambien CR. Its ads offer patients a free seven-day prescription. The company took out a full-page ad Wednesday in the Los Angeles Times and several other newspapers, including the Wall Street Journal and the New York Times, to reassure consumers that Ambien is safe.

The ads, which remind patients to take the medicine as directed, will also appear in weekly magazines such as Newsweek. No TV commercials are planned.

Last year, Pfizer pledged not to advertise new drugs directly to consumers for six months so doctors have an opportunity to learn about the medication before commercials generate demand. That means ads for its sleeping pill wouldn't start until at least year's end, which could help Lunesta in the short term, analysts said.

In the meantime, Pfizer's massive sales force will blanket physicians' offices to tout indiplon.

The big question in the sleeping pill market is how sales of the entire group will be affected once there is a cheap, generic version of Ambien available. Ambien's patent expires in October but is expected to be extended for six months for testing the drug on children.

With healthcare costs rising dramatically, managed-care companies have been pushing cheap generics to save money. It is unclear if they will aggressively push patients toward generic sleeping pills, but that could curb sales of the newer medicines.

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