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Executive Summary

SMITHKLINE (DYAZIDE) AND ALLERGAN (BETAGAN) ARE TESTING "FREE SUPPLY" promotional programs. Both companies are using variants of a SamplePlus voucher system developed by Southport, Conn.-based Medical Marketing Group. MMG, which administers the programs, markets the SamplePlus system as a tool for building brand loyalty among patients by supplying free introductory prescriptions and periodic free refills. SmithKline Beecham has been conducting a promotion of Dyazide using the giveaway plan in eight midwestern states since September, 1989. The pilot program is scheduled to continue until at least the end of 1990. Allergan is also testing a small experimental promotion using MMG's system for its ophthalmic beta-blocker Betagan in several areas of the country. Marion Merrell Dow is also using SamplePlus in its ongoing "Cardizem Medication Plus" bonus program ("The Pink Sheet" March 5, T&G-9). As part of the SamplePlus plan, patients being prescribed the target brand receive enrollment material and a voucher for an initial free supply of the drug from their physician. Patients present the voucher along with the prescription at a participating retail pharmacy and receive their free trial supply. Pharmacists are reimbursed the brand AWP plus a professional fee of $4.50 through the MMR program. PAID Prescriptions, Inc. pays out the reimbursements for the program. In addition to the free initial supply, patients receive a SamplePlus prescription card that allows them to accumulate points toward additional free supplies or other incentives and allows MMG to track and measure patient, doctor and pharmacist use of a brand. MMG also markets a simpler version of its system, MedStart, which provides only the free starter supply, also tracking physician prescribing and patient use data. The free goods program has its strongest appeal to companies with products facing patent expiration or competing against products perceived as therapeutically equivalent. Allergan's Betagan runs out of patent protection in 1991. SKB's Dyazide is now enjoying a window of renewed exclusivity due to the product withdrawals brought about by the generic drug scandal. Marion's Cardizem is fighting aggressive competition from Searle's Calan SR and Pfizer's Procardia XL. Searle recently introduced its antihypertensive Kerlone with a giveaway similar to those administered by MMR, but developed by Searle itself. Medical Marketing Group, a partially owned subsidiary of mail-order giant Medco, was founded as an independent firm in 1986. The marketing group says it has agreements to participate in its voucher programs from more than 52,000 retail pharmacies nationally, including both independents and the majority of large chains. At least one large chain has not yet joined the network. MMR is reportedly working on software to meet the chain's requirements for point-of-sale electronic transmissions of reimbursement data.

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