Through an arrangement with CVS Caremark Corp. (NYSE: CVS), patients who have a valid prescription for Viagra will be able to order the medication online. Other treatments for erectile dysfunction like Cialis from Eli Lilly & Co. (NYSE: LLY), Levitra and Staxyn from GlaxoSmithKline (NYSE: GSK) and Germany’s Bayer A.G., Stendra from Vivus Inc. (NASDAQ: VVUS) and Zydena from South Korea’s Dong-A are likely to be the first followers as patients with prescriptions for these drugs may want to avoid the stigma — real or imagined — attached to purchasing these drugs in person.
But the makers of other drugs will be watching as well. By selling direct, drug makers avoid two problems. First is counterfeiting. Viagra, which sells by prescription for $25 a tablet, is often faked by online sellers and sold as the real thing. That damages the drug’s brand and keeps profits out of Pfizer’s hands.
Second, Pfizer will not undersell its distribution chain, at least not yet, meaning that the company will put more profit in its pocket. For Viagra, with sales of $2 billion a year, the company may realize some additional profit, but by promoting Web sales as offering “real Viagra,” Pfizer is offering a guarantee that the knock-off sites cannot match.
Makers of weight-loss drugs will be watching Pfizer’s Web sales closely, and these may be the next drugs to hit the market directly from manufacturers to patients. Drugs like Viagra attract more Internet searches from men and weight-loss medications more searches from women than any other medications.
If Pfizer can pull this off, it could decide to extend Web sales for other drugs or it could promote sales from online pharmacies like CVS or Walgreen Co. (NYSE: WAG). Once again, the Internet changes everything.
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