First came the letter from my state union, warning me about the dangers of high cholesterol. Today, a second letter arrived from a national affinity group, extolling the virtues of Lipitor.
Admittedly, I tossed the first one away. I'm pretty familiar with the dangers of high cholesterol, and it just seemed an odd mailing when I received it. A second such missive, however, caused me to look a little closer.
As a retired police officer, I'm used to getting solicitations of all types, and cops certainly have lousy diets to accompany their lousy schedules. But was there some sudden epidemic on our hands prompting a deluge of mail?
It seems that Pfizer (NYSE: PFE) is looking to boost sales of its cholesterol-fighting drug, Lipitor, by promoting it through labor unions. The informational I received in the mail isn't Pfizer's first foray into affinity-group advertising. A similar mailing to the Service Employees International Union earlier this year apparently raised some eyebrows among its members. Perhaps it's paying off.
Pfizer realizes about a quarter of its revenue from Lipitor; in the first quarter, that amounted to almost $3 billion. But with the drug going off-patent in 2011, Pfizer faces the imminent potential of substantial losses to generic competitors. While it has a deal in place with Ranbaxy that settled some of the outstanding litigation, Teva Pharmaceuticals (Nasdaq: TEVA) is at least one of the generic-drug makers still arguing in the courts with Pfizer.
Pfizer has been criticized in the past for its advertising techniques. Earlier this year, Congress hauled in Pfizer, Merck (NYSE: MRK), Schering-Plough (NYSE: SGP), and Johnson & Johnson (NYSE: JNJ) to scold them for their direct-to-consumer advertising. Pfizer even decided to pull a TV ad featuring artificial heart inventor Dr. Robert Jarvik, following controversy that arose because Jarvik wasn't licensed to practice medicine.
I think the Pfizer mailing highlights the lengths to which the pharmaceutical company will go to ensure that Lipitor continues contributing to its results until the arrival of L-Day. Much of its sales growth is occurring abroad, but in some markets, generics are already making inroads. In Korea, for example, Lipitor lost 15% of its share in one month after a generic came to market.
There's nothing wrong with affinity group marketing; many organizations do it. Heck, I've even received credit card offers from The Motley Fool. Yet the apparent clumsiness and urgency with which Pfizer's now seeking to expand Lipitor's market may leave investors with the urge to reach for a bottle of Norvasc -- Pfizer's blood-pressure-reducing medication.
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