Effective Marketing for Controversial Indications in Japan: ED Table of Contents Business Implications In This Issue... Introduction Market overview Japanese ED market Patient populations Perception of ED Market evaluation Competitors Products and makers Product profiles Branding and brand awareness Makers perception State of Marketing Regulatory requirements Distribution, sales and dispensing Advertisement and DTC Failures in marketing Success in marketing Mobile marketing Outlook Business implications * Japan - the second largest single country pharmaceutical market in the world represents also an untapped and potentially large ED market. In spite of already more than 6 years of marketing efforts for Viagra and near 2 years for Levitra in Japan, the generated sales are disproportionably lower - as much as 15 times in absolute value compared to the other major markets. * No other therapeutic areas are more explicitly dependent on the culture-driven marketing campaigns as those related to controversial indications. The term "controversial indications" is conditionally used in this report to designate several groups of conditions and disorders, where a palpable stigma is attached to the public perception in Japan. Classical - although still not yet well researched example of controversial indications are the mental disorders. Recent changes in the epidemiology - i.e. increasing incidence of AIDS and other infections underscored the social stigma associated with sexually-transmitted diseases. Scrutinized in this report is the erectile dysfunction (ED) - the market and the marketing, the social stigma and the impact of the culture and public perception. Certain failures in the marketing could have attributed to a negative perception of ED treatment and thus to exacerbate the stigma. * Successful marketing efforts are observed in the area of mobile Internet - fitting in a way both technologically and psychologically the Japanese public. In this Issue... Introduction Japan is the second largest single country pharmaceutical market compared to US and well ahead of the EU member states and Canada. However, in contrast to US the marketing of prescription-only medicinal products (Rx products) in Japan differs most markedly in the strict enforcement of ban on direct-to-consumer (DTC) advertisement of Rx products, in much lesser degree of separation of prescription and dispensing practice, and not the least - in much stronger impact of cultural (traditional) factors. While all the contemporary marketing methods for pharmaceuticals (data-driven marketing, etc.) are widely used in Japan, the lack of appreciation of cultural influence may considerably undermine the results of marketing campaigns. The influence of the cultural factors is not limited only to the execution, but may affect every stage or form of the marketing campaigns - from conceptual planning to handling of language missteps. This report will try to substantiate why marketing campaigns in Japan for products targeting ED not only uniformly failed to achieve boost in the sales proportional to other developed markets, but stayed considerably inferior to the potential of Japanese ED market itself. The working hypothesis of the report is that the hyped publicity campaigns for introduction of ED-corrective products instead to alleviate the social stigma, resulted in its exacerbation, and while the image of some of the anti-ED products (most notably Viagra) are already firmly cemented in the general public consciousness, the brand recognition was not followed by value recognition. Market overview Japanese ED market The comparative analysis of the sales of Viagra in US and Japan shown on Graph 1 demonstrates two distinguished patterns - the gap between the sales figures (expressed as sales per eligible male) in its widest is almost 10-times on behalf of US sales; and sales reached a pick by 2003 and started to decline thereafter. The latter trend is like to continue in the wake of recently acknowledged possibility for non-arteritic anterior ischemic optic neuropathy (NOIAN) side effects, as Pfizer reported the US sales for the second quarter of 2005 dropped by 13%. The analysis in Graph 1 was carried out by using the "number of eligible males" parameter, thus defined the number of males likely to be subjected to ED treatment stand at 25,742,000 in Japan and 52,590,000 in USA. In spite of the 1:2 ratio between the number of patients, the difference in the sales per eligible male are 1: 8.8 (average) between Japan and US. This is a remarkably high discrepancy what prompts the question - whether Viagra is oversold to US patients or undersold to Japanese patients. Although, there is a little doubt that exploitation of the DTC channel may have helped the product to over-prescribed in North America, from the other side there is no reason to accept that the market in Japan has reached it ceiling. Regarding the other comparable products (Levitra) in the only year of available sales data (2004) the sales in US outperform those in Japan at more moderate rate of 4.63 times. Graph 1. Comparative sales performance of Viagra and Levitra in US and Japan over a five-year period (2000-2004) Notes: Shown are only years where full data are available for both products. 2004-Lev denotes the sales of Levitra for 2004 (displayed as sales in US$ per eligible male). "Eligible males" are defined as all males between age of 35 and 65 identified in the latest national censuses in the period of 1995-2000 (Analysis by Licenscape Japan; Source of data: Japanese Ministry of Internal Affairs and Communications, Statistics Bureau) and US Census Bureau) Source: Raw sales data from IMS Health, companies press releases Patient populations A comprehensive determination of the size, demography and patterns of behavior of the Japanese ED patients is not yet carried out. In the most recent observation "Attitude Toward Health and Sex Among Middle Aged and Older Men" (August 2005, Pfizer KK ) the company estimates that the number of ED sufferers in Japan is about 1,130,000 men in the age bracket of 30 and over, what corresponds to an average of 3.0 % of this segment of the male population (about 37.5 millions). Earlier in June 2005, the results from the Asian Men's Attitudes to Life Events and Sexuality (Asian MALES, publicized at the 8th International Congress of Andrology) - conducted as the first multinational survey of ED in Asia, revealed that the prevalence of ED among Chinese, Taiwanese, Korean and Malaysian men over 20 years old is higher than figures reported for Japan. The findings of Asian MALES study are considered consistent with the previously-conducted MALES survey, regarding the rates of prevalence and co-morbidity, thus making apparent that the number of ED patients in Japan could be heavily underestimated. To the other extreme, MALES surveys showed in 2001 that in the representative sample of American males aged between 20 and 75 an average of 22 % complained of ED, and the prevalence rose to over 50 % after 40 years of age. Therefore for this report, due to the lack of credible ED figures, we used the number of "eligible males" (see above). Perception of ED The Taoist medical vademeci and manuals - arrived to Japan from medieval China and thence forming the fundament of the Japanese medical and sexual knowledge for more than one thousand years up to the second half of 19th century, strongly recommend against indiscriminate emission of semen, a substance believed to nourish the male brain. Moreover, after the emergence of the samurai class, the bushido (the way of the warrior) ethics placed no importance whatsoever on the heterosexual relations and sexual prowess had no ranking among the virtues of the "real man". While disparaging view toward women has been common all past civilizations and societies, such idea has never been conceived in the West, where the womanizing is considered as the surest sign of masculinity as macho behavior and sexual athletics are national pride among certain nations. In spite of drastic socioeconomic changes in the last 150 years, vast elements of the bushido code still remain entrenched in the Japanese psyche. This is evident - and on a daily basis, in the corporate environment and therefore there is no reason to consider that the ambivalent attitude to sex has disappeared. Recent survey conducted in April 2005 jointly by the Ministry of Health, Labor and Welfare (MHLW) and the Japan Family Planning Association found that nearly one third of the married couples have a sexless marriage, as a number of respondents confirmed that after fulfilling the main duty of "producing an offspring" they do not feel any more compelled to continue with marital sex. The "2004 Global Sex Survey" sponsored by condom manufacturer Durex found that Japanese have at average 46 times a year an intercourse - what is just a little than half of the next underperformers of Hong Kong with 79, and far less than the over-performing French (133 sessions per year). In spite that the MHLW analysis states that the sexless marriage problem is poorly understood and from the other side the Durex observations could be scrutinized for objectivity, the two surveys suggest a trend in the sexual behavior of Japanese men. In an affront to what could be considered as a conventional wisdom, it appeared that a negative view toward the ED correcting medicines could be found among the Japanese women too. A survey on behalf of the Japan Sexual Function Society among female nurse in 2002 found that 72 % rejected the idea of intercourse with a partner on Viagra for a variety of reasons, including perception of the drug as "creepy" (25%). Nonetheless, other segments of female population do not share such sentiments since a separate survey (see below) discovered that O&G specialists also could prescribe ED treatment, apparently upon requests from their patients. Market evaluation The therapeutic market for ED in Japan, at present is dominated by two PDE-5 inhibitors - sildenafil (marketed as Viagra) and vardenafil (marketed as Levitra). Comparative analysis of the market size and sales between Japan and another major market (US) is shown on Table 1. While in term of the market size calculated per capita expenditures, Japan and US are within a similar range, both the gross figures and the proportion of ED products of country market value are considerably different in Japan and US (for clarity the comparison is made only using Viagra and Levitra data, since Cialis - another PDE-5 inhibitor, and alprostadil-based products are not approved in Japan). Overall, the combined shares of Viagra and Levitra of the whole pharma market amounts to 0.12 %, while in US the same parameter is more than 5 times higher - at 0.64 %. This difference rises sharply when comparing the combined sales figures to exceed 15-fold at US market. Table 1. Comparative country pharma market size, Viagra and Levitra sales breakdown Year 2004 Pharma market size (US$) Population Pharma market size per capita (US$) Viagra sales (US$) Viagra segment of country pharma market (%) Viagra sales per capita (US$) Japan 57,800,000,000 125,570,246 460.30 60,685,000 0.10 0.48 USA 175,300,000,000 281,421,906 622.91 999,551,000 0.57 3.55 Levitra sales (US$) Levitra segment of country pharma market (%) Levitra sales per capita (US$) Japan 13,561,000 0.02 0.11 USA 128,353,000 0.07 0.46 Japan (Viagra & Levitra combined) 74,246.000 0.12 0.59 US (Viagra & Levitra combined) 1,127,904.000 0.64 4.14 Source: IMS Health (data for the pharma market size for the twelve months ended January 2005), national statistics Evidently, Japan and USA - two countries having similar level of industrialization, healthcare expenditures (including relative market size) differ in one order of magnitude in ED products sales. We assume that potential size of the ED market in Japan is considerably larger than the currently reported 74.3 million US$ for 2004 on the base of the following two propositions (Table 2): Table 2. Fact base and assumption regarding the ED market in Japan Proposition Facts Actual number of ED sufferers in Japan is much higher than found/reported * Ethnically, the Japanese are related to some of groups surveyed in Asian MALES where prevalence ED was higher * Pfizer KK survey found that 37 % in their 30s and 62 % in their 60s were concerned about a decline in sexuality * About 6.6 % of the respondents to the Pfizer KK survey declared that they have taken ED drugs (including from illegal suppliers) * In spite of having the longest life span expectation for both males and females, Japanese as in the other industrialized countries suffer of comparable level of endothelium related disorders as one of the main predispositions of ED Marketing of ED treatment in Japan, while comparable financially with other US failed to take into account the cultural stigma associated with ED * In the Pfizer KK survey Japanese men were confirmed uniformly averse to seek for medical help - 98.7 % in their 30s and up to 99.3 % in their 60s, in stark contrast to rates between 19 and 36 % in Asian MALES survey and 58 % among American males * Viagra has been marketed as a treatment for a clinical disorder as a new name "ED" was introduced in the Japanese lexicon Notes: Compiled information; sources shown elsewhere in the text Competitors The introduction in 1999 of the first PDE-5 inhibitor (Viagra) obliterated virtually overnight all other prescription and OTC anti-ED products on the market in Japan. Now more than six years later, Viagra remains dominant product on the market, although the introduction of the Levitra led to a drop of around 3% in the domestic sales. Potential competitors include: * New PDE-5 inhibitors: an application for marketing approval submitted by Ely Lilly KK (Japan) for another product of the third of the same class - tadalafil (sold elsewhere as Cialis) is confirmed by October 2005 to be under review by the Japanese regulatory authorities * Alprostadil-based products - although tens of alprostadil-based products (predominantly generics) are marketed in Japan for variety of indications, no product is approved for treatment of ED. By the time of this report none of the listed in lower part of Table 6 products sold in US (Caverject, Muse and Befar) are either available or under development. (several Japanese-language web site are serving Japanese customer willing to purchase those products from abroad, yet the volume through this channel seems negligible * Products of the traditional medicine (kampo) - currently some of them still occupy a niche segment but considering their quite long history - are likely to be around in the future too. For over a millennium the Japanese pharmaceutics have been under the dominant influence of traditional Chinese medicine (TCM) and herbal and other TCM products are popular, respected and widely used even today. Products and makers Product profiles The comparison of the some of the characteristics of the two PDE-5 inhibitors on the market in Japan shows considerable similarities as listed on Table 3, with two notable exceptions: packaging and pricing. Unlike the majority of the peroral medicinal products in tablets forms - commonly white and marked only with the product code, Viagra is dispensed in Japan in the familiar world-wide rhomboid shape of the strikingly blue tablets. Although at the beginning of the promotion of Viagra in Japan, both the unusual shape and color without doubt helped the brand image. Levitra tablets are more traditional (round) in shape, however their bright yellow color distinguish them from both the direct competitor and all other tableted medicines in Japan. From the other side, the prices for Viagra and Levitra was set up individually too. Both products are at present not eligible for reimbursement and not included in the listings of the Japanese Drug Tariff List (National Health Insurance Price Lists), and hence the decisions for setting prices have been taken solely on the discretion of the makers. Table 3. Comparison of products characteristics of Viagra and Levitra Item Viagra Levitra Brand (in Japanese) Bayagura (r) Rebitora (r) Generic Name (JAN) Sildenafil citrate Vardenafil hydrochloride hydrate Japan Standard Commodity Classification Number 87259 87259 Bulk Formulation Sildenafil citrate as white crystalline powder; additives Vardenafil hydrochloride hydrate as white - slightly yellow crystalline powder; additives Packaging & Formulation Specification 25 mg: 2 tablets per PTP pack 50 mg: 2 and 10 tablets per PTP pack 5 mg: 20 tablets per PTP pack 10 mg: 20 and 40 tablets per PTP pack Approval Date January 1999 March 2004 Approval No. 25 mg: 21100AMZ00053000 50 mg: 21100AMZ00054000 5 mg: 21600AMY00075 10 mg: 21600AMY00076 Approved Indication(s) Erectile dysfunction Erectile dysfunction Approval Classification Class 1 Class 1 Regulatory Classification(s) Designated drug / Prescription only medicine Designated drug / Prescription only medicine Therapeutic Category PDE-5 (Phosphodiesterase type 5) inhibitor PDE-5 (Phosphodiesterase type 5) inhibitor Period for Reexamination 6 years 6 years Listing in the National Health Insurance Price List NA NA Market Launch in Japan March 1999 June 2004 Package Insert Revision July 2005 (12th) May 2005 (3rd revision) Manufacturer / Marketing Agent Pfizer KK Bayer Yakuhin KK Source: Japan Approvals Database (JAD), Package inserts, PMDA, Licenscape Japan Branding and brand awareness In term of branding and awareness of the brand among the general public the two anti-ED products took different path. In the short period between the approval in US and the approval in Japan, Viagra - as a name in both English and Japanese transcription has become familiar to the widest segments of the public. At present the brand Viagra or at least in its Japanese pronunciation (Biagura) is practically a household name and to certain extend - a cumulative term for ED medicines. While there are no data on level of brand recognition in Japan, from own experience we may judge that the brand of Viagra is fairly highly recognizable in Japan due to the common use in the vernacular and tabloid press. Unlike other countries, the printed forms of the mass media are government-required to keep the number of Chinese characters used in their publication to a certain minimal number so guarantee the texts are comprehensible even for people with middle school level of literacy, and hence the common occurrence of Viagra in such publications testifies that the name is understood. In a reverse way, the emergence of Viagra as a brand helped putting Pfizer KK on the pharmaceutical map in Japan. By late 90s Pfizer KK was just one of the numerous subsidiaries of foreign pharma in Japan and although for more than 40 years in Japan - unheard among the general public. However in the following Viagra launch years, the company name became so synonymous with Viagra that in the series of special advertisement for physicians (e.g. Nikkei Medical, 2004) in marking the 50th Anniversary of Pfizer in Japan, a snapshot from the briefcase of Pfizer's MR was shown with an enlarged rhomboid blue tablet along the customary stuff of pamphlets, pens, etc., so in a sense Viagra acts as a business card for Pfizer. Inevitably, the higher profile of Viagra comes with negative side, since "no such thing as bad publicity" is hardly valid in Japan. As early as 2002, product managers from Pfizer KK have complained (cited by Asahi Geino Magazine) that excessive mass media attention to any publicly reported side effect has been demonizing Viagra as "dangerous". The approach taken with Levitra since the launch in June 2004 was different - with a lower profile and targeting predominantly physicians. Remarkably, the efforts toward patients are limited to mobile marketing (see below) - the only so far effective form in approaching general populace in Japan, thus skipping the phase of large printed announcements proved ineffectual in the earlier years of Viagra campaigns. While again there is no research data, the brand of Levitra is presumably far less recognized by the general public, judging by the absence of the term in the mass media. Additional comparison regarding the level of recognition of the two brands is demonstrated in Table 6. Makers perception Not unlikely the level of brand recognition of their ED products, the public perception toward the two makers also differs. Bayer Iyakuhin entered Japan more than 100 years ago in the period when the modern Japanese medical science is under the forming influence of the Prussian medicine. Therefore, the perception - at least among practicing physicians have been positive, though probably little changed since the beginning of the last century. Pfizer KK came after the WWII and after decades in obscurity only in the 90s began to emerge as a major player in Japan what coincided not only with the introduction of Viagra but with some high-profile acquisitions (Pharmacia, Warner-Lambert). One peculiar for Japan parameter for the level of prestige for foreign pharmaceutical companies is the ability to attract and retain medical representatives. Historically, all foreign pharmas in Japan have experienced difficulties in hiring MR mostly due to the perceived lack of stability - as an alien entity in contrast to the stable domestic companies. In the case of Pfizer KK, not only the shifts in the labor market in the recent years, but improved credibility and visibility helped it to attract as many as 3,200 MRs in 2005 (Press release, March 2005). The difference in the name recognition of the two makers is evident also from the results of mobile web analyses seen in Table 6. The State of Marketing Regulatory requirements Although the ED products are often described as belonging to the group of "life style medicines" (along with oral contraceptives, newer generations of hair growth stimulants, etc.), no such category exists within the Japanese pharmaceutical and regulatory system. Both Viagra and Levitra have been approved in Japan as: * Class 1 medicinal products (Drug with new active ingredient) * Prescription only products * Designated drugs (to be dispensed only at authorized by the MHLW pharmacies) * Dispensable for both inpatients and outpatients * Not reimbursable The regulatory limitations could affect the marketing in a number of negative ways: from a controlled environment of advertisement to a higher purchase cost as a deterrent to the patients (not subject of this report). Distribution, sales and dispensing The distribution of medicinal products in Japan is carried out in principle, according a scheme, where 3% of volume is delivered from manufacturers directly to dispensing pharmacies, and the remaining 97 % are channeled through the system of wholesalers spreading the sales into 45 % to hospitals (with over 20 beds), 25 % to small medical institutions (hospital under 20 beds, clinics, GP) and 27 % to the dispensing pharmacies. Owning to the fact that by March 2004, the separation of prescribing from dispensing practice in Japan stood at 52%, it is probable that half of the sales occur through pharmacies affiliated with the medical institutions and half - through dispensing pharmacies. Regarding the specialty of physicians prescribing ED medicines, no nation-wide survey has been conducted, although a sampling in a large metropolitan area reveled that after urologists, physicians with following specialties were found to have been prescribing as well: internal medicine, psychosomatic medicine, psychiatry, neurology, surgery and O&G (Source: Licenscape Japan). Advertisement and DTC Unlike US, but like EU and other developed regions, direct-to-consumers (DTC) advertising for regulated medicinal products is not permitted in Japan. However, the option for rising the disease awareness as long as no product name (either by brand or proprietary term) is suggested to the patients, is unrestricted and recently widely used by pharmaceutical companies. Due to ubiquitous access to Internet and mobile phone web they became the media of choice when reaching to the general public, as discussed in more details below. Due to the differences in regulations the level of overall promotional spending and thereafter the effectiveness of the campaigns in Japan and US are only relatively comparable. The compilation of data shown on Table 4 demonstrates both the higher level of promotional expenditures and the competitiveness of the ED market in US. Aside from the lack of DTC spending, no advertisement figures are disclosed for ED medications in Japan, so a projection for the ED-related spending could be made on the basis of the following assumptions: ? Since Japan has an unusually ratio of MRs to physicians (approximately 1:2), all expenditures related to promotional activities carried by MR are likely to be of similar - if not even higher level to US ? As previous experience of the author as a consultant to Publicis Japan suggests the costs for pharma advertisement in offline (journals, magazines, newspapers, newsletter, books, etc) and various online media in industrialized countries (including US and Japan) do not differ significantly (after adjustment for the currency fluctuation, reach of the media and production cost) ? The practice of providing free samples exists in Japan too, however to a much limited extend compared to US ? The promotional campaigns in Japan for the two PDE-5 products currently on the market have been carried as a part of the global campaign of their respective maker, and therefore the spendings in Japan are supposed to be planned accordingly and in line with expenditures in US and the major EU countries ? The only area where Japan differs in ED marketing is mobile phone area. However, even the cumulative annual expenses for an ED-dedicated mobile web site (including content creation, maintenance and promotion) do not exceed the cost of even a single half-page ad in a major daily. Based on the above, we could conclude that the promotional expenses for ED therapeutics in Japan - although possibly less in absolute terms, when adjusted to the market and population size are proportional and appropriate for Japan. Yet the results - annual sales, differ drastically. Table 4. US ED promotional and advertisement spending Leading Therapeutic Classes by U.S. Promotional Dollars, 2004 Rank Therapeutic class Total promo % Growth +/- % Market share 6 Sexual Function Disorders 239,172,000 76 3.1 Integrated promotional services (2004) Product Journal spend Cost of contacts Retail value of samples Total cost of professional promotion Viagra 3,262,000 75,329,000 276,444,000 355,035,000 Levitra 1,013,000 76,338,000 105,295,000 182,646,000 DTC advertising expenditure Rank 2004 Brand Company Expenditure in 2004 (US$) Expenditure in 2003 (US$) 4 Levitra Bayer 156,861,975 46,897,759 Notes: Journal Spend (This measure is an estimate of the cost of product advertising in medical journals. This figure is tabulated by relating observable advertising characteristics (for example, position, color, circulation) to rates and charges published in Standard Rates and Data); Cost of Contacts (This measure estimates the cost, in dollars, for a particular contact. The dollar estimates provided are derived by apportioning the "cost for ..." figure: Cost for Office or Hospital Calls, Cost for Office Service Visit, Cost for Office or Hospital Telephone Contacts); Retail Value of Samples (Retail Value of Samples (RVOS) is the retail value of the product sampling activities of pharmaceutical representatives that are directed to office-based physicians. A panel of front-office personnel reports the quantity of product samples provided to office-based physicians through in-person discussions, service visits, and the mail) Source: IMS Health, Nielsen Monitor-Plus Failures in marketing The marketing of ED medications in Japan - particularly Viagra, has passed through several key phases none of which without its negative consequences if not outright failures. Flop at the beginning. Viagra (25 and 50 mg tablets) was approved in Japan in January and marketed in March 1999 - i.e. in an unprecedently short period after the internal approval (first in January 1998 in USA). The launch of Viagra in Japan coincided with several major developments in the regulatory environment for prescription pharmaceutical in Japan - in August 1998 the then Ministry of Health and Welfare (MHW) authorized the use data generated from clinical trials overseas in the submission applications in Japan. Along with the overall deregulation - including the acceleration of the NDA review process due to Japan involvement in ICH, the above step led to significant reduction of the number of clinical trials previously required to be carried in Japan and also - to a shortening of the review and approval process for new medicinal products. In the particular case of Viagra the approval was grated on the basis of foreign clinical data packages and results from a Phase I and one early Phase II studies carried in domestically, as the review process took only six months. While from one side, the Viagra approval heralded a new era in the regulatory affairs in Japan and furthered the ICH-decreed international harmonization, from the other side it also resulted in a negative publicity. Well before the approval, the general public was aware of the product and the possibility to import for personal use by purchasing from Internet, and in July 1998 the vernacular media widely commented on the dead of elderly man from coronary complication after taking Viagra. At this background, the faster approval of Viagra was met with skepticism and the tabloid press openly speculated that the approval was supported only for the benefit of aged members of the Parliament and regulatory authorities, who otherwise dodged for almost three decades the introduction of oral contraceptives in Japan. ED is both a disease and foreign. The ban on DTC advertisement redirected all promotional efforts of Pfizer toward raising the public awareness of ED. In a similar manner as in other countries where the term "impotence" was gradually replaced with ED, in Japan the genuine Japanese term bokkifuzan has been gradually replaced with an alphabet abbreviation (ED). However, the similarities end here and while in US and elsewhere the impotence was more or less a medical term replaced by another medical term (erectile dysfunction), in Japan the common language expression bokkifuzan was replaced with a foreign language (English) and foreign script (Roman alphabet) term. One can speculate that it was done with the good intention to alleviate the age-old embarrassment associated with sexual inability, however instead it created a new stigma and seemingly stronger than the old one. The term bokkifuzan (literally translated to as inability to stiff up or to get upright)- when written in well-known Chinese characters not only could be understood even by children or less literate, but appears rather innocent - by refereeing to a (natural) status, not sexual condition and let alone a disorder or disease. In brief, Japanese men with sexual troubles were forced to admit not only suffering from a disease, but from a "foreign disease" - the type closest of which coming to mind is AIDS. Owning to the recognized insularity of the Japanese character, "island mentality" and occasionally outright xenophobia - it comes of absolutely no surprise that Pfizer KK found that a meager 1 % of surveyed Japanese men have sought medical attention for ED compared to the reported in MALES study nearly 60 % of American men with ED. Also along this line, the Pfizer survey found that only 9% of interviewed may consider a medical treatment, if at all. Not surprisingly, in more recent ads the ED is explained to the general public not as bokkifuzan but as vague "decline in male functionality", however it is early to see whether it is benefiting the campaigns. The value of getting erection in order to have sex is not acknowledged. One of the finding of the MALES study regarding "what men with ED want" is described as "reliably rigid, well-maintained erection so they can successfully engage in sexual intercourse" (cited by I. Goldstein, 2004). Regardless how self-explanatory such a statement may sound, it can not be taken for granted in Japan. As already discussed other complex and predominantly cultural, dimensions can influence the interest among Japanese men in ED therapy. It emerged that the majority of them are not particularly troubled if they have bokkifuzan, an attitude seemingly radically different in the case of ED. In addition to a reluctance to admit a suffering from a "foreign disease", Japanese men may find minimal motivation to undergo treatment in order to regain erection to engage in coitus - something not only of dubious value, but again of foreign origin. Those two "foreign" components in the perception of the marketing efforts for ED drugs in Japan greatly and mutually amplified each other negative impact, finally resulting in sluggish sales. From a larger point of view, the misguided promotional campaigns - in raising ED awareness and brand image building instead of eradicating the old stigma and embarrassment associated with the impotence, in failing to take into account the cultural dimensions created paradoxally new and possibly worse stigma. In short - the marketing campaign have not projected an attractive value for Japanese patients. Success in marketing The earlier campaigns for promotion and marketing of ED medications (Viagra) in Japan were in more or less degree carried as a localized variant of the global promotional offensive. However, the sales performance in the period 2000-2002 obviously proved that the promotions - largely in the form of ED educational materials were misplaced. Nowadays, a comparison between DTC materials in US and the ads for raising the ED awareness in Japan shows a glaring contrast. While the people featured in American collaterals are mostly senior couples, Japanese visuals display men looking as twice younger than the white-haired American models. With the notable exception of the promotional add with Pele - which appeared to be mechanically transplanted to Japan and then quietly withdrawn, no present day visual materials feature men older than 40 - in line with the revised company strategy announced in mid-2003 by a Products Communications Manager of Pfizer KK (cited by Asahi Shimbun, May 8, 2003). Disease-awareness campaigns were carried out in Japan too, although far from the glamour of the widely-publicized campaign such as industry supported "Sorted in 10" featuring Sir Sterling Moss. Quite arguably, not a single same high-profile male celebrity in Japan could be convinced to participate in a local campaign - for a number of reasons, including the more traditional ethical point of view that seeking recovery of erectile function at the age of 75 is unnatural. Therefore the decision of Pfizer to focus the marketing efforts on the group of men in their forties (39-49) was a custom-adjusted and culture-conscious marketing decision. From the other side, remains not clarified why Japan was excluded from a survey launched as "global" campaign in December 2004 by Bayer in cooperation with GSK under the title "Strike up a Conversation". Requests to the company for additional information was not returned, and it is unclear why only representative countries from EU and Americas have been included. Mobile marketing The number of subscribers to wireless services (including digital cellular phones, PHS, pagers, hand-held computers, PDA, game consoles, etc.) in Japan is expected to peak at 95 millions by 2005 yearend, what represent almost 74% of the population and practically the entire adult segment. Moreover, a whooping 97.8 % of Internet users in Japan are using Internet services (web, email, multimedia) through mobile phones. Technologically this trend is driven by the introduction of the third generation (G3) mobile phones in Japan, as according to the Japan Electronics and Information Technology Industries Association (JEITA) in the 9 months preceding July 2005, G3 phones accounted to more than 70 % of the gross mobile phone shipments in Japan. In addition, the introduction of flat rates for high-speed data communications via the third-generation wireless networks, as well as bigger and sharper displays of the G3 devices made affordable browsing of both sophisticated mobile sites and regular web pages, including document access in PDF format. The prototypes of mobile phones equipped to receive digital television broadcast were already demonstrated (as of October 1, 2005) and the commercial digital television broadcasting for mobile phones is scheduled to start as early as the spring of 2006. Inevitably, those technological advances have created - and are expected to creat in the future - a much higher demand for Japanese language mobile content. The void is already being hastily filled up with inherent Japanese content comics (manga), games and music - the latter according to some estimates amounts to 5 millions downloads a day. By the end of 2004 the size for the mobile content industry in Japan was valued (Source: 2005 White Paper of the Ministry of Internal Affairs and Communications, MIAC) as high as 461.6 billion Yen with 43 % seen as taken by the mobile content market. Table 5. Use of mobile phone services, Internet usage among overall population of Japan. Number of mobile phone subscribers (G2 and G3) 89.0 mil August 2005 Number of subscribers to services for third-generation (G3) mobile phones 37.0 mil August 2005 Number of Internet users 79.48 mil December 2004 Number of subscribers to Internet services through mobile phone 77.75 mil June 2005 Projected number of wireless services users in Japan 95 mil December 2005 Number of searchable Japanese-language mobile web pages / including carriers web pages 60 mil / 100 mil August 2005 Number of health-related mobile sites Percentage of Internet users accessing from both mobile phones and personal computers 31.9 % February 2005 Sources: E-health Japan, MIAC, Internet White Paper (Impress Corp.), Computer Industry Almanac, NTT Resonant) Where in this sprawling mobile landscape is the health and healthcare related content? According to recent findings (Source: E-health Japan), the number of web pages related broadly to the topic is falling inconsistently lower than anticipated for of such importance. Pharmaceutical companies in Japan were not the last to foray into mobile content especially in the early days of mobile Internet in 1999-2001, most notably with the pioneering work of Ely Lilly KK (the Japanese subsidiary). Eli Lilly KK was arguably the first pharma company in year 2000 to take advantage of both then newly allowed top level domain name .jp (thus bypassing the rather stiff restrictions on co.jp allocation) and mobile Internet sites enabled through DoCoMo i-mode service. The Ely Lilly KK set up several disease-specific web sites, including what is was the first schizophrenia site in Japan - a condition firmly falling up to now within the "controversial indication" group. In the mobile realm, Lilly entered with three sites - one corporate and two disease-specific (diabetes and human growth hormone disorders), an achievement rare even by today's standards, let alone during the period when most of pharma companies offered on their web site just few digitalized pages of their corporate brochures. The early entry and dedicated efforts yielded - as evident in Table 6, far higher name recognition (both in English and Japanese spelling of the name) compared to Pfizer and Bayer. By year 2001 all major pharma companies in Japan were planning development of mobile content for at least one key product and targeted at either physicians or patients or both. The average budgets marketing through mobile content were and still are relatively modest as witnessed by the author as consultant for Publicis Japan. Five years later, the health and healthcare mobile Internet, and specifically those sites related to any aspect of the pharmaceuticals are largely dominated by illicit content. There is not a single product among those offered for illegal and/or scam trade over Internet not to be offered to the Japanese mobile users from Japanese language mobile sites. Very few - if none of them, are actually hosted in servers in Japan and not limited by the ban of DTC advertisement, they are targeting potential Japanese buyers much more aggressively and with more robust content than legitimate vendors, thus proving - in an indirect way, the potential of mobile content and marketing in reaching customers and patients in the cases of "controversial indications". As the composite data in Table 5 and the metrics included in Tables 6 show that both standard and mobile Japanese language Internet hold unexplored potential for marketing ED medications in Japan. For a considerable proportion of Internet users in Japan - i.e. those not having/not interested in computers at home and those without access to computers in the place of occupation, mobile phones represent the only way to use Internet. Accidentally, this segment of Internet users is also very likely to contain a large portion of ED patients - men in their forties and above. The attractiveness of the approaching ED sufferers in Japan through the mobile circuits stems from several usage patterns of mobile phones in Japan. Firstly, compared to other countries the Japanese phone users are strikingly less likely to use voice communication as a primary contact channel: while the utilization rates of PC email in Japan and US are almost the same (standing at 94.2 % vs. 96.1 %, respectively), the utilization rate of mobile email in Japan and US is as far apart as 87.7 % in Japan and 12.4 % in US (Source: 2005 White Paper, MIAC). Mobile phone offer considerably more privacy as being individually-owned and not like PC - a shareable device, as the importance of the latter patterns becomes clearer in the context of rather cramped urban settings in Japan. Both current contestants in the Japanese ED treatment market have taken advantage in ubiquitous mobile Internet in Japan. Operating within the tightly-controlled no-DTC environment, Pfizer KK and Bayer Yakuhin KK have created mobile sites focused on the erectile dysfunction alone. Table 6. ED-related products and makers name recognition in Japanese mobile Internet Searches (keywords) Mobile Internet hits 1 Dedicated sites 2 (whole mobile net) Number Launch (year) Alexa ranking ED 219 0 - Erectile 133 0 - Erectile dysfunction 126 0 Erectile dysfunction in Japanese 3 248 0 - Viagra 1,990 0 - Viagra in Japanese 875 ED in Japanese 1 2000 No data 4 Pfizer 353 0 - Pfizer in Japanese 4 0 Levitra 342 0 - Levitra in Japanese 122 ED in Japanese 1 2003 No data Bayer 2 0 - Bayer in Japanese 6 0 - Cialis 541 0 - Cialis in Japanese 122 0 - ED in Japanese - Ely Lilly 163 0 - Ely Lilly in Japanese 34 1 (2) 5 2000 No data Caverject / in Japanese 0 / 0 0 / 0 - - Muse / in Japanese 0 / 0 0 / 0 - - Befar / in Japanese 0 / 0 0 / 0 - - Notes: 1 Mobile web sites designed to be accessible by Japanese mobile phones in Japan 2 Product or maker mobile sites 3 Used a keyword in Japanese 4 Monitored by Alexa - undetectable level of visits 5 Ely Lilly KK maintains one corporate mobile site and two disease-specific mobile sites Source: E-health Japan (www.ehealth-japan.com) - all metrics as of October 2005 Outlook The lasting already more than six years promotional and marketing campaigns have failed to generate the level of sales corresponding to the overall size of the Japanese pharma market and specifically to the potential of the ED market. The next five years shall be decisive in the further development of ED market in Japan due to introduction of new products, demographic shifts and possibly - changes in the social stigma. * The ED market in Japan is unsaturated and expected to grow. The introduction of Levitra in Japan led to a marginal reduction of Viagra sales and to expansion of PDE-5 inhibitors market size. Therefore, if Cialis is approved in Japan, its sales are expected to reduce to a certain degree the shares of both Viagra and Levitra; however the overall size of ED market will increase. * In this report we argue that any failures in the ED marketing campaigns should not be attributed to financial misplanning but to the inability to create a value for the patients in the line with the concept that the best marketing for controversial indications in Japan - including ED, should be predominately value-driven. * Considerable work towards unlocking the potential of Japanese ED market should include conducting value-driven ED-related promotional campaigns (not subject of this report) * Restriction on DTC in the ED market are not expected to be lifted in near future, and therehence the focus on pro-disease awareness efforts should be expanded with more emphasis on the awareness and much less on the disease part * The utilization of the mobile internet - with its potential in reaching ED patients already shown, is likely to become dominant along with the improvement of the technology. Pfizer KK - the wholly-owned subsidiary of Pfizer in Japan headquartered in Tokyo Source: Japan Approvals Database (JAD) Journal of Generic Medicines. Vol. 2. No 3. 219-231. April 2005 Effective Marketing for Controversial Indications in Japan: ED Confidential Page 1 of 33