This year’s hottest sleeping pill could have been called “Estorra.”
It could have been promoted with a series of TV ads in which an elderly elf sneaks into consumers’ bedrooms just as they’ve turned out the light, and sprinkles them with sand—a riff on the sandman tale oft told to children.
Neither of those things happened. The Food and Drug Administration nixed Estorra as a brand name because it sounded too similar to an existing drug, Estrace, which is hormone-therapy medication.
Worse, when the sandman character was tested, it bombed. “Women were very uncomfortable with the idea of a strange old man coming into their bedrooms late at night,” said Timothy Healey, executive director of central nervous system marketing at Sepracor.
The mysterious, migratory sandman was one of many concepts that Sepracor considered—and then killed—prior to the launch of the drug that was eventually named Lunesta. “They didn’t die in vain,” said Jay Popli, Lunesta’s marketing director. “Every one of those campaigns we saw gave us something.”
Apparently so. Two years ago, few people had even heard of Sepracor or Lunesta. Today, the sleep aid is the No. 2 drug in its category and boasts a 13% share of the market.
Based in out-of-the-way Marlborough, Mass., Sepracor is just one of hundreds of small American firms in the speculative world of specialized pharmaceuticals. These are companies that devote their entire business, year after year, to only one or two drugs, often funded by deals with the R&D arms of pharma giants. They hope to hit on that one formula that behemoths like Pfizer and Merck have missed. The rewards can be fantastic, as acquisition prices tend to reach the hundreds of millions.
Or they can go it alone, as Sepracor has done so far, and keep the bounty to themselves.
The results to date have been substantial. Lunesta has logged $616 million in total sales over its lifetime, according to IMS Health. Only Sanofi-Aventis’ Ambien leads it.
More significantly for the drug business as a whole, Sepracor has proven that even the least-promising category can be ripe for renewal. Prior to 2005, insomnia was a chaotic, mature segment beset by addiction worries and a string of high-profile failed drugs. Now, it is the most actively fought field in pharmaceuticals, and sales within it are forecast to grow for years.
How did Lunesta, with its dreamy, blue-tinged ads featuring an animated moth magically charming its users to sleep, achieve all this?
The answer is somewhat counterintuitive. While marketers frequently brag about their strategic skills, their amazing new ideas and their novel use of new forms of media, the story of Lunesta proves that two of marketing’s oldest chestnuts can still create a blockbuster: a massive TV ad budget coupled with sheer good luck.
May Cause Drowsiness
It’s hard to remember that, until Lunesta’s launch in April last year, the insomnia business was regarded by many as moribund and stagnant. It was dominated by one megabrand, Ambien, which had defeated an endless number of also-rans (such as King Pharmaceuticals’ Sonata). Any new prescription brand would also have to fend off over-the-counter alternatives (like Tylenol PM) and home remedies (a glass of milk or wine before bed, for instance).
In addition, the notion of “sleeping pills” carried with it a significant amount of dark cultural baggage in the form of Valley of the Dolls-style addiction. Is there an American alive who does not know that Marilyn Monroe died because she took an overdose of barbiturates? Another drug, Halcion, was for a time withdrawn from some markets after it was publicly blamed for the first President Bush’s slurred speech and incoherence on trips to Australia and Japan. Even U.S. Rep. Patrick Kennedy faulted his May 6 Capitol Hill car crash on the Ambien he’d been taking.
Hence, the insomnia business just sat there, a cash cow for Ambien, which sucked in about $2.2 billion in 2004, almost by default. “When we launched, Ambien had a nearly 70% market share. It was pretty formidable competition. You don’t get to 70% without bringing something to the party,” said Popli.
At the end of 2005, with Lunesta on the market only eight months, the category had grown to $2.8 billion, a 27% leap. Prescriptions had grown from 38 million in 2004 to 43 million, a 13% increase. “We see 120,000 new patients every week entering the insomnia market,” said Popli. One research report has put the top of the market at $4.8 billion.
As things turned out, Healey and Popli’s timing was perfect. The U.S. obsession with working brutal hours and taking few vacations conspired with widespread anxiety and sleeplessness after Sept. 11, the result being that Lunesta was introduced to a primed audience.
Insomnia is sexy again. Since Lunesta, two other major insomnia cures have been launched, Takeda’s Rozerem and Sanofi’s Ambien CR, a controlled-release version of its original brand that the Paris-based company is hoping will win over most of the original Ambien’s patients. In addition, at least four other entrants were trying last year to find a niche in the sleep business. Neurocrine Biosciences inked a deal with Pfizer to market Neurocrine’s as-yet-unbranded compound, indiplon; Somaxon is still preparing the launch of Silenor; Merck has an as-yet-unbranded compound called gaboxadol that is at least a year away from launch; and GlaxoSmithKline launched Requip, a treatment for restless leg syndrome, which also keeps sufferers awake at night. One of Requip’s lucky side effects? Drowsiness.
For now, however, those other companies are scrabbling over crumbs while Ambien and Lunesta divide the pie between them.
In Their Dreams
Sepracor’s luck began when, according to Bloomberg News, Sanofi passed on a chance to buy the rights to market Lunesta, which was a derivative of a compound already on the market in other countries. Sepracor snapped it up instead.
With the new drug in hand, Healey, Popli and their staff began their market research. The pair head a department that has only five executives in total. The other three are director of professional marketing Todd Bazemore, senior director Rob Ciappenelli and associate director Will Richmond. That’s several dozen executives fewer than most drug companies put on an average drug launch.
Their first problem was to figure out exactly what insomniacs actually wanted. As with all market propositions, what seems simple actually isn’t. The obvious answer is that people want something that will put them to sleep. But the market already had that—Ambien—and still, as Healey puts it, “100 million Americans have insomnia but less than a quarter of those patients have seen a physician.” So the pair figured some piece of the puzzle was still missing.
“We started about two years out,” Popli, 39, said. “We spent a lot of time in darkened rooms listening to physicians and patients telling us about insomnia.” The team witnessed sufferers who were so tired that they fell asleep in front of them.
People had complaints about existing sleep aids, it turned out. Sure they knocked you out, but if you woke up in the middle of the night you often could not get back to sleep again, and it was too late to take another pill, they said. Over-the-counter medicines—or, for many, booze—had the same problem: “Most patients will wake up at 3 or 4 in the morning with a raging headache,” Healey, 41, said. Lunesta’s two main advantages as a chemical are that it keeps you asleep for a full eight hours and has a low side-effect profile.
So Healey and Popli needed a campaign that would distill the concept of soft, safe, reassuring, sleep-through-the-night-ness. They considered between 50 and 75 creative treatments—including the elfin bedroom intruder—but the winning idea, the “luna” moth, ultimately came from their consumer ad agency, McCann HumanCare in New York.
Still, Healey and Popli lacked a name.
One of the difficulties in launching a drug is that the name of the brand is not within the control of the marketer, it’s controlled by the FDA, which must certify that the name cannot be mistaken for other brands either when said aloud or when written in a doctor’s scrawl. The name Lunesta was green-lit, jarringly, right before its launch.
Sanofi and Sepracor had applied simultaneously to the FDA for approval of their new drugs, Lunesta and Ambien CR. Sepracor’s luck held but Sanofi’s did not: Lunesta received full approval from the FDA and DEA in April 2005, but Ambien CR wasn’t so fortunate. The feds wanted to get their hands on more information about Ambien CR, so its launch was delayed until September.
The specifics of the FDA’s approval of Lunesta also gave the brand an edge: The drug was approved for “the treatment of insomnia,” not, as Ambien’s approval said, for the “short-term treatment of insomnia.” A tiny difference in the small print of any drug approval, perhaps, but it meant that Sepracor would have an easier time than Sanofi tackling the delicate issue of addiction worries.
Meanwhile, Takeda’s Rozerem, was also grinding through the FDA machinery. It launched in July, but again Sepracor got lucky: Even though Takeda had a larger sales force than Sepracor, Takeda declared it would do no consumer advertising for the drug until 2006.
In all, that gave Lunesta an uncluttered run at Ambien from April through September. Healey and Popli took full advantage. Healey said Sepracor had prepared a marketing plan far in advance of FDA approval, and the materials were almost literally cued up at the printer on the day the FDA gave its nod.
The result was that Lunesta launched almost immediately. “Their execution was flawless,” a Sanofi drug rep who asked for anonymity told Brandweek at the time. “They had reps coming over the hill like the Chinese in the Korean War.”
Sepracor announced it would spend $60 million on advertising, but as the months went by the company committed to raising that ceiling considerably, pressing its advantage as the first new drug to challenge Ambien in what promised to become a crowded field. By the end of 2005, spending topped $228 million, making Lunesta the most-advertised drug of the year. It was hard not to notice the commercials, which showed a glowing, ghostly moth, gliding over towns and alighting on handsome middle-aged people whose sleep appeared to be so satisfying they were actually smiling while unconscious. The ads frequently ran at night, making them an unintended signal for TV viewers that said, “If you’re watching this, it’s time for bed.”
In just eight months, Sepracor had gone from being a company that no one had heard of to the drug company that controlled the single largest brand ad budget on the planet—much greater than Pfizer, the biggest company, was spending on Lipitor or Viagra.
Enough to Keep You Up at Night
Lunesta’s campaign was like an earthquake; everyone felt it. The change was immediately noticeable at Sanofi too. When the latter did finally get approval for Ambien CR (and the “short-term” language was removed from the new drug’s indication sheet), its launch campaign looked rushed and desperate. It consisted of free coupons offering patients a seven-day trial, and print ads carried no educational, risk or side-effect information. It also forced Sanofi to spend more on advertising Ambien CR than it did on the original brand; ad spending went up from $63 million in 2004 to $90 million in 2005.
The increased noise on TV—barely a late night cable show went by without ad breaks featuring both Ambien and Lunesta—became its own topic in the news media.
In February, The New York Times published the first in a series of articles investigating insomnia drugs. Again, Lunesta got a lucky break. As the No. 2 drug in the market, it was shielded by Ambien, which took the brunt of the heat. In March, the Times reported that the police were finding late-night car crash victims who were sometimes “sleep driving.” After taking Ambien, they fell asleep and then “somnambulated” into their cars, driving off while largely unconscious. A follow-up story described Ambien-takers who raided their own fridges while asleep, consuming thousands of calories of cookies and eggs, and putting on dozens of pounds in weight, all while unconscious. “The sleeping pill Ambien seems to unlock a primitive desire to eat in some patients,” the paper noted. “The drug’s users sometimes sleepwalk into their kitchens, [and] claw through their refrigerators like animals.”
Cable news showed an infamous piece of footage shot with a night-vision camera in which a woman, asleep in bed, stuffs her face with food resting on the pillow beside her. YouTube now features a whole subgenre of videos of people dancing, drooling or just plain zonked out while allegedly on Ambien. Significantly, there are no YouTube videos of people on Lunesta. As mentioned, Congressman Kennedy crashed his car near the Capitol while intoxicated, claiming he had been taking Ambien.
The upshot was that Sanofi was forced to run a series of crisis-communications ads, consisting of full-page buys in major newspapers, reassuring consumers of the safety of its product.
Sepracor didn’t have that distraction. It just continued on, making sure those moths showed up on as many TV screens as possible.
Sales of all sleep drugs declined after the reports, but all the bad news seemed to be centering on Ambien and not Lunesta. “It has since rebounded,” Healey said of the sales.
Another stroke of luck: In May, the FDA declined to give indiplon full approval, and Pfizer eventually decided to end its agreement with Neurocrine and not market the drug. The removal of indiplon from the picture was a considerable relief to Sepracor because if Pfizer had been behind the launch, it would have been able to leverage what is regarded as the world’s largest sales force to convince doctors to abandon Lunesta. Neurocrine is still hoping to launch the drug on its own.
It was not all luck, of course. Drug marketers largely regard the Lunesta launch as a textbook example of how to introduce a massive new drug brand.
Even the name has won plaudits. In addition to evoking the notion of lunar, “the word ‘nest’ is hidden in Lunesta so people think of their nests when they sleep,” said Joan Bogin, executive director at consultancy Landor Associates, New York. The moth evokes nature and, coupled with the lunar angle, there’s an overall subtext of natural cycles, Bogin said, which helps diffuse patient anxiety about addiction.
That’s a considerable achievement on its own, because it’s incredibly difficult to actually get people to go to the doctor to treat insomnia. “There’s this perception that insomnia is a normal part of life,” Healey said. Most doctors, moreover, have received fewer than two hours’ training in insomnia in med school.
Because of those factors, the Lunesta campaign had to educate both potential patients and physicians, which was one reason why Sepracor decided that its marketing materials for doctors would look the same as those seen by the general public—drug marketers often make them strikingly different because the two audiences have such wildly differing needs. The result is that in the first six months of this year, Lunesta made Sepracor $277 million in revenues, putting it on target to reach a half-billion dollars by Christmas.
It also has brought some excellent news, personally, for Popli: He suffers from insomnia.
Photo by Jonathan Kannair