This piece is for Czh-ga in recognition of his excellent work for us
in the past.
This is another piece for my colleague Nermeen.
We would like to set a "bonus" of $40 for this piece would expect
1.5-2 hours of work.
It would be great to have an indication of when you can do this work.
The priorities are: Clearblue, then low-cost reading glasses, then
Nicorette. Ideally we would like to have Clearblue by tomorrow 12
noon our time (GMT) and the other two by Monday morning our time.
Data Request: Nicorette Smoking Cessation Products
Background (relevant information from my research)
Nicorette Products are available in the UK and Europe with and without
a prescription from pharmacies, leading supermarkets and other
The Nicorette® range of nicotine replacement therapy (NRT) products
includes the Nicorette® Inhalator, Nicorette® Patch, Nicorette® Gum,
Nicorette® Microtab (sun-lingual tablet), inhalator with cartridge and
the Nicorette® Nasal Spray.
Pharmacia (now Pfizer since April 2003)
Other NRT products available in the UK are:
Novartis Consumer Health: Nicotinelle range - Patch, gum, lozenge
GSK: NiQuitin CQ - Patch, lozenge
No clinical evidence to suggest that one form is more effective than
others. (NICE, 2002)
Other products with lower market shares in the UK
Johnson & Johnson's McNeil Consumer Products, marketers of Nicotrol,
Boots and ?other own label products
(need to find out whether these have large market shares in European
counties and also what are the other NRT products with market shares
in the UK)
History of Product
Pharmacia was the first pharmaceutical company to manufacture a
product for nicotine replacement therapy [NRT]. It developed nicotine
gum in 1971, and in 1978 SmithKline Beecham began marketing the gum as
"Nicorette" in Switzerland.
In 1996 FDA approved for over-the-counter marketing Nicorette gum,
making it the first smoking cessation aid available without a
prescription for adults.
2000 annual report GSK, Nicorette worldwide sales of £203 m / $ 309 m
In the early 1980s Duke University researcher Jed Rose invented and
patented the transdermal nicotine patch which became the basis for
SmithKline's Nicoderm and for Johnson & Johnson subsidiary McNeil
Consumer Products' Nicotrol. The FDA first approved these products for
marketing as prescription smoking cessation drugs in the U.S. in 1991.
Zyban (Bupropion) is a novel, nicotine-free prescription medicine,
available as a sustained-release tablet, for treating the problem of
smoking addiction. (GSK)
Snippets from an important press article
Andrew McConaghie, Pharmafocus
Tuesday, December 31, 2002
NRT products have played a leading role in making the UKs smoking
cessation services that rare thing a genuine NHS world-beating
Up until September 2000, one weeks free supply of NRT was provided to
smokers who were entitled to free prescriptions; after this date they
were the amount was upped to six weeks supply.
The turning point for patients, the NHS and the companies came in
April 2001, when all NRT products were made available on prescription,
and smoking cessation services were set a target of helping 50,000
people to quit by the four-week follow-up point. This target was
doubled for 2002/3 and the message from the Government is now very
Boom time for NRT
Given the green light by the Government, and with PCTs and strategic
health authorities working to some of the most demanding performance
targets in the NHS, general practitioners have responded with a
massive increase in prescribing.
IMS Self Medication data shows 1.73 million NRT prescriptions were
written in the year to September 2002, a massive 175% increase in just
12 months, with the products of three companies, GlaxoSmithKline
Consumer Health, Novartis and Pharmacia, all competing in a multitude
of drug forms.
NHS prescriptions are, though, just one side of the story, since the
over-the-counter market for NRT products dates back to the launch of
Pharmacias Nicorette in 1980, and produced annual unit sales of 3.8
million in the year to September.
Nicorette dominates this market, currently commanding a 56.5% sterling
sales share, with GSKs NiQuitin CQ in second and Novartis Nicotinell
in third place. The market remains unpredictable a sales slow down
in recent months probably concealing the markets underlying dynamic
qualities. The one unambiguous indicator is good news for GSK
NiQuitin CQ surged ahead in the period and doubled sales.
A tale of two categories
Despite this dynamic growth, GSK still has a long way to go before its
product can challenge Nicorettes number one status in OTC, which is
driven by the popularity of its gum. The story in the prescription
market is quite different, with NiQuitin representing 54% of all
products dispensed (based on MAT Sep 2002), followed by Nicorette
(27%) and Nicotinell (19%)
GSK has the vagaries of the NHS prescription blacklist system to thank
for its dominance in the market, rather than the strengths of its
salesforce. Launched in 1998, NiQuitin was somehow overlooked and
never joined Nicorette and Nicotinell on the banned list; instead it
found itself in the right place at the right time as the NHS changed
its view of NRT products.
They were seen as lifestyle drugs the thinking was: There was a
feeling of why should the Government pay for smokers to quit? says
Claire Conroy, Account Director, IMS Self Medication. It can now be
seen that due to the huge burden placed on resources by
smoking-related diseases, funding smoking cessation makes good
economic sense in the long term.
A NICE appraisal in April 2002 cemented the health economics case for
the NHS, with the Institute stating that GSKs Zyban and all NRT
products were among the most cost-effective of any medicines when used
as part of a smoking cessation programme. NICE predicted that NHS
costs would triple to £9 million following its guidance, but balanced
it against its estimate of the £1.5 million spent on treating smoking
related diseases every year.
In November, Health Secretary Alan Milburn launched the next phase of
its aggressive anti-smoking strategy, with a ban on tobacco
advertising to come into force just as a new three-year £15 million TV
and radio anti-smoking campaign is launched in collaboration with
Cancer Research UK and the British Heart Foundation.
A new profit control mechanism for NRT?
The Government has also announced a groundbreaking cashback
agreement with the pharmaceutical companies involved, giving a rebate
on smoking cessation products sold above a certain threshold. Senior
executives at the companies are still thrashing out the details of the
Government-proposed scheme, but have had to accept the scheme as
inevitable as prescription of the products continues to grow.
Indeed, on a first glance, the scheme appears to be a mini-version of
the larger profit control agreement, the Pharmaceutical Price
Regulation Scheme; it allows free pricing and, perhaps most
importantly, does not seek to restrict prescribing.
Pharmacia Spokesman Roy Sutherwood said: We have had a long and
fruitful relationship with the DoH in making smoking cessation
services effective, so we welcome this initiative as a win-win-win for
patients, the NHS and the industry. Exactly how the scheme will work
is currently being discussed with the relevant civil servants, so
watch this space. But the plan is to get the scheme up and running by
April so we can achieve that higher number of quitters.
The companies will now be trying to calculate how their bottom lines
will be affected, but should allow for continued growth. Claire Conroy
says: It was expected that the cost impact on PCTs would have to be
limited in some way so this is by no means a surprise. At the end of
the day it is going to be in each companys interest to get as many
people through as they can, even if they are going to be slightly
The cashback scheme is one further factor for the marketers to
consider in an already unpredictable market. The industry has only had
18 months of the post-blacklist prescription market to see how it
affected the picture in OTC sales, but the trends have defied
expectation so far.
The prescription market does not appear to have taken away from the
OTC market, says Claire. Patches retail at up to £20, so you might
think consumers would avoid this cost by getting the product on
prescription and paying the £6.20 charge or, in fact, no charge, as
most patients are exempt from prescription charges. The continued
strength of the OTC market suggests this hasnt happened.
Market watchers hypothesise that this pattern might be because OTC
consumers and prescription patients are quite distinct users of NRT
products in 2001/2, OTC sales peaked around the time of New Years
resolutions, whereas prescriptions were much more consistent, peaking
around No Smoking Day in March.
One of the key elements of the market is the constant need for
innovation in producing new form types from patches and gum to
inhalators, microtabs and, most recently, lozenges. The trend stems
from the consumer driven OTC market, where well-intentioned quitters
try one formulation, fail, and move onto another form for their next
GSKs recent campaign to promote its new lozenge range was an example
of the power of a good media PR campaign. Claire says: We have seen
successes where form types have been second to market, such as the
NiQuitin CQ lozenge, but have still been characterised by significant
success, perhaps driven by the level of media coverage gained.
The company has also suffered at the hands of the media, however, with
UK prescriptions of Zyban badly hit by reports of serious and
sometimes fatal side-effects linked to its use. Reassurances from the
MCA of its safety when administered correctly to appropriate patients
have not lifted its fortunes considerably, and NRT is still seen as
the safest and most convenient option.
All of the competing products share an identical active ingredient
nicotine and so in that sense fall into the category of branded
generics. Thus, if a company sales rep can persuade a GP to write a
brand name instead of simply nicotine gum 2mg, their product is
guaranteed to be dispensed by the pharmacist.
Growth in prescriptions written generically was double that for any
branded product in the year to September, and so the companies must
also try to persuade pharmacists in receipt of these generic
prescriptions to dispense their product.
But the immaturity of the prescription market, and the changing
dynamic in relation to its OTC twin makes the field an unexplored
territory. The only certainty in the NRT market is that it will
continue to change, says Claire.
The companies are still sussing it out and they have to keep their
options open. Whats going to be exciting is when a company takes a
product and looks at it as one brand its the same pack, unlike most
The planned Pfizer/Pharmacia merger could also create a new marketing
force to be reckoned with. It will be interesting to see the impact
Pfizer could make on Nicorette given the level of promotional resource
they could leverage, says Claire.
However the market develops in the future, NRT marketers, like those
promoting coronary heart disease products, know their products will
play an intrinsic role in delivering the NHSs top health improvement
NRT &/or Buprion are amongst the most cost effective healthcare
interventions (NICE report 2002)
1. Market for Nicotine Replacement Therapy
How large is the segment in Europe and how did this evolve?
Key competitors and their market shares in various countries
What is the market share enjoyed by Nicorrette in various European
countries, how did this evolve over the past 10 years?
2. Pricing History
What was the pricing for the Nicorrette range over the past 10 years?
How did this evolve with transition to the OTC market and in the UK
NHS with its dual status (both prescription and non-prescription)
What was the price of competitor products during this time?
In the UK and other European countries.
3. Channel Analysis
What proportion of sales is / was generated from each of the marketing
channels (chemists, supermarkets, online, catalogue, health clinic /
What proportion of sales & marketing budget was allocated to each of
What are / were the variations in different countries?
Revenues generated by the Nicorrette range over the past decade in
different European countries
Cost structures and profitability of the same
Suggested Data Sources
1.Market Research Reports: Euromonitor, EvaluatePharma, IMS Health,
Nicholas Hall, OTC Market Report
2.Broker Reports for Financials (Company Annual Reports would have