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TAGAMET $10 REFUND OFFER WILL COLLECT PATIENT INFORMATION

Executive Summary

TAGAMET $10 REFUND OFFER WILL COLLECT PATIENT INFORMATION, including patient names and addresses, & conditions and treatment histories. On the backs of rebate coupons under the space for the patient's name, address and phone number is printed a list of questions, asking what condition/symptoms the prescription is for, whether this is the patient's first prescription for the condition, and, if not, what drug was taken most recently. Coupon books will be available at pharmacies and doctors' offices on display easels, SmithKline Beecham said. Coupons will also be provided in cimetidine samples distributed by physicians. Display easels for the coupons declare: "Reduce your drug costs now!" or "If you take Tagamet, [Merck's] Pepcid, [Lilly's] Axid, or [Glaxo's] Zantac, this offer may be for you." To be eligible for the rebate prescriptions must be for a minimum of 30 800-mg, 60 400-mg or 100 300-mg tablets; Medicaid patients cannot receive the rebate. When a patient mails in a coupon and proof-of-purchase, a $10 rebate check and an additional coupon will be sent back. Coupons are good through June 30, 1994. Sales representatives began detailing the program to physicians in the first week of November; SmithKline Beecham is notifying approximately 100,000 physicians and 50,000 pharmacists. The timing of the program is interesting. Tagamet comes off patent in six months. SmithKline Beecham originally planned to have an OTC version of cimetidine on the market before expiration. That plan has been derailed by the difficulty of getting an OTC dosage approved by FDA. The new marketing campaign was also unveiled by SmithKline Beecham one week before the annual meeting of the National Wholesale Druggists" Association -- a traditional event for major announcements by SmithKline Beecham. Pharmacists are being sent the easel displays along with a cover letter. The letter asks them to place the easel "prominently near your prescription department" and to let patients know that the program is available. Pharmacies will receive a $2.50 "administrative fee" for each coupon redeemed that originated in the pharmacy. "Although only physicians can decide which drug is best for individual cases, patients should got involved and ask their doctors whether the most affordable drug is an option to consider," SmithKline Beecham North American Pharmaceuticals President Jerry Karabelas stated in the firm's Nov. 8 announcement of the program. The Tagamet program, the company asserted, will "encourage consumers to discuss the relative values of ulcer drugs with their physicians and provide additional savings to those for whom Tagamet is prescribed." SmithKline Beecham characterized Zantac as the most expensive H[2]-receptor antagonist, and Tagamet as the least expensive, for the treatment of duodenal ulcers. According to July 1993 data from Walsh America PMSI cited by the firm, the national average cost to patients for one month of acute duodenal ulcer therapy is $79.92 for Tagamet (400 mg twice a day) and $89.46 for Zantac (150 mg twice a day). With the rebate, the monthly cost of Tagamet would be $69.92. SmithKline Beecham also reported results of an Oct. 18 Gallup & Robinson telephone "consumer awareness survey" of 400 individuals who had disclosed previously that they were either on Tagamet or Zantac. Of those surveyed, 37% were not aware of an ulcer drug other than the one they took. In addition, 56% and 79% did not know which were the most and least expensive ulcer drugs, respectively, of the four most frequently prescribed. Tagamet rebate coupons have been used before but not under the direct sponsorship of SmithKline Beecham. One coupon program was introduced by Express Pharmacy Services to its Pittsburgh-area customers in 1990 ("The Pink Sheet" March 5, 1990, T&G-8). In a similar 1990 discount program for consumers, Marion Merrell Dow launched a program offering discounts to Cardizem users. The program was administered by PAID Prescriptions and offered a free prescription after reaching a certain Cardizem usage level ("The Pink Sheet" March 5, 1990, T&G-9). Another precedent for price marketing to consumers was initiated by Lexis in 1989 -- the generic firm ran oral contraceptive price comparison ads in consumer magazines ("Tbe Pink Sheet" Feb. 13, T&G-1). SmithKline Beecham has in the past made efforts to increase consumer awareness in the anti-ulcer market more generally: the company ran network TV ads focusing on "stomach TLC" in 1988 ("Tbe Pink Sheet" March 14, 1988, p. 17).
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