SEARLE $10 MIL. CALAN INDIGENT PATIENT PROGRAM COULD HELP FORTIFY VERAPAMIL's POSITION IN BLACK HYPERTENSIVE SUBMARKET; PHYSICIAN COUPONS PLANNED

Searle's $10 mil. Calan giveaway program is the promotional highlight in an apparent effort by the company to make its brand of verapamil the brand of choice for treatment of the 7.5 mil. patient subpopulation made up of hypertensive blacks. The Searle program, entitled "Patients in Need," is not aimed specifically at blacks. Instead, it is targeted to those patients who live below the poverty line but are not covered by Medicaid or other insurance programs. However, the program gives Searle an extra peg for contacting MDs treating indigent black patients and for promoting the product's efficacy in the black population. The company unveiled the program at a Feb. 11 Capitol Hill press conference. Through coupons dispensed by MDs for Rxs to be filled by pharmacists, Searle is giving away $10 mil. (at retail value) of Calan and the recently approved once-a-day dosage, Calan-SR. The program dovetails with two major events affecting Calan: (1) the recent FDA approvals for an antihypertensive indication for Calan and a sustained release version of the drug, Calan-SR; and (2) comparative studies which indicate that verapamil is more efficacious in the black subpopulation than beta blockers or enzyme converting inhibitors. The once-a-day dosage and antihypertensive indications have recently given Calan (and Knoll's Isoptin) a potentially important product differentiation vis-a-vis other generic forms of oral verapamil and the other branded calcium channel blockers ("The Pink Sheet" Dec. 22, pg. 4). In background material handed out at the announcement of the program, Searle pointed out that a recent study of hypertensives in Georgia indicates that the cost of medication is a major deterrent to blacks in the initiation and continuation of drug treatment. The size of the Calan giveaway program is indicated in comparison with the product's 1986 total sales of about $65 mil. In effect, Searle is betting that the positive promotional impact of the giveaway is worth close to one-sixth of the product's total sales for the previous year. Based on the new dosage form and indication, some estimates put the potential for the product in 1987 above $100 mil. In addition to helping to stimulate the Calan brand, Searle is using the program as part of an effort by the new Monsanto management group to get the Searle name out more prominently and to instill a sense of corporate momentum. Announcing the program, Searle Chairman Sheldon Gilgore shared the spotlight with Rep. Waxman (D-Calif.). The House Health Subcommittee chairman complimented the firm: "I want to congratulate the G.D. Searle Company for their sense of social responsibility. It certainly is going to help their corporate image, and they're due a good image because they're doing something good for the American people." Waxman used the Searle program to push for more product donations in the future and suggested that the indigent giveaway be considered as a product introduction technique. "Searle's compassion and social responsibility is a model for pharmaceutical companies that introduce new medicines," Waxman said. "I am hopeful that the marketing of all drugs will begin with an extension of the 'Patients in Need' program and that Searle will keep its program in place as long as it is needed." Rep. Madigan (R-Ill.) said the program "demonstrates that the spirit of voluntarism is alive and well." He seconded Waxman's call for other companies to mimic Searle's program. "This is not a 'one-shot' program by Searle," Gilgore told the introductory press conference. "As we introduce other drugs we will mount efforts to expand these programs and increase our help for the indigent." Searle's program could provide Waxman with a foil for his scheduled review of drug prices in early April. Although it is not technically a sampling program, Searle's indigent program could be used as a precedent for couponing in further discussions of the topic on Capitol Hill. Under the Searle program physicians will provide "certificates" to patients identified by doctors as being in need. The patients will be able to redeem the certificates at the pharmacy of their choice. Pharmacists will receive full reimbursement, including usual and customary dispensing fees, from Searle. Participating pharmacists are given the option of instructing Searle to donate their dispensing fee to the Red Cross. Searle Chairman Gilgore indicated that Searle will continue to sample Calan and Calan-SR while the indigent program is underway. "This is not replacing the traditional sampling of drugs, which supplies doctors with emergency starter doses." Asked whether Searle's monitoring would include an evaluation of the program as a test case for coupons in lieu of samples, Gilgore responded: "We had not conceived it as such." Searle has used coupons in the past. In 1985 the firm distributed Nitrodisc patient information kits that offered pharmacists $2.50 for each kit distributed and patients $5.00 rebate coupons. To be eligible for the program, Searle said, "a patient must have hypertension, arrhythmias, or angina treatable by Calan SR or Calan, as determined by a physician." In addition, such patients "must be below the national poverty level" but "must not receive prescription drugs free or at reduced prices through any insurance or government program." Searle has sent "enrollment kits" to "approximately 125,000 U.S. physicians who have been identified as treating cardiovascular disease," according to press material. The doctors will select eligible patients for participation. By submitting application cards to Searle, additional "physicians can enroll themselves in the program -- on a first come, first served basis." After enrollment, physicians will receive certificates for up to 360 patient-days of oral verapamil therapy. Depending on the dosage prescribed, each certificate will provide a regimen of about 30 days; the doctor may thus provide one-month supplies to 12 patients or a one-year supply to a single patient. Searle estimated that roughly 100,000 individuals suffer from hypertension but cannot afford drug therapy. Gilgore noted that Calan therapy costs patients, including pharmacy dispensing charges, about "60-80›" per day. When asked how long the $10 mil. supply would last, Gilgore replied: "We really don't know. This has never been done before, an that's why we are going to be closely monitoring it. The rate at which patients are enrolled is a total unknown to use. The answer is that it could be a few days or it could be a year; we donht know." He added: "Even this large amount cannot answer the entire need. It is a beginning, however." Several pharmacy associations said they supported the Searle program in concept. The National Association of Chain Drug Stores, for example, wrote in a Feb. 9 letter to Rep. Waxman that chains "support the concept of providing prescription drugs to the needy through community pharmacies whereby reimbursement to the retail drug stores would be based on marketplace pricing." However, NACDS said it had to stop short of endorsing "a specific product or a specific product promotion, no matter how charitable its intent." The National Association of Retail Druggists made its support contingent upon the use of "usual and customary" dispensing fees, rather than a fixed $3 fee, in reimbursement to pharmacists. Pharmacists will be reimbursed for Calan dispensed under the program at "the current AWP" plus the dispensing fee, Searle said. In a Feb. 3 letter to Searle, NARD said it "has endorsed the concept" of the program in that it "fully utilizes the services of the independent retail pharmacist and maintains the traditional checks and balances of the physician/patient/pharmacist relationship." The association also pointed out its "longstanding policy in support of marketplace pricing." The American Pharmaceutical Association said in a Feb. 6 statement that it "is particularly pleased that Searle has chosen to deliver needed medications to indigent patients through the traditional distribution channels, allowing the pharmacist to take an active role in providing improved health care." APhA added that it "supports the principle of bringing much needed medication to indigent patients who might not otherwise be able to afford proper medical care."