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Case 20
Bristol-Myers Squibb
Case Objectives
1) To evaluate the use of direct to consumer advertising pull strategies as a marketing tool
for prescription medicines, specifically, Glucophage®, by Bristol-Myers Squibb.
Teaching Suggestions
Students should be familiar with direct to consumer (DTC) advertising by pharmaceutical
companies. Almost any evening newscast is composed of a number of prescription medicines
being advertised for a number of ailments. Students should be encouraged to monitor evening
Problem Situation
The case presents an overview of the use of the contentious form of “pull” strategy employed by
Bristol-Myers Squibb (and other pharmaceutical companies since 1997) of advertising the
benefits of their prescription drugs directly to the consumer via television and coupons. The
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Case Discussion
Bristol-Myers Squibb’s direct to consumer advertising campaign in support of Glucophage
XR™ was highly successful. For an expenditure of $81 million for an ad campaign, first year
sales were $160 million. With the introduction of a generic version of Glucophage in 2002, sales
However, direct to consumer advertising campaigns alone do not necessarily ensure that the
product will be in the long-term successful nor is it assured that Bristol-Myers Squibb will
achieve its long-term distribution objectives solely using a “pull” marketing strategy.
What is known from the case is that with the introduction of a generic version of Glucophage
sales declined 88% – the first quarter of 2002 versus the first quarter of 2001. This dramatic
decline can be attributed to: the consumers’ preference for “low cost” medicine and the channel
members (doctors) exercise of their “power” in prescribing the low cost alternative.
Inherent here is the fact that the channel members (doctors) have built up resentment to the
heavy-handed direct to consumer advertisements and when the opportunity presents itself
(generics) they protest by switching over patients to the generic alternative. Thus, direct to
consumer advertising does nothing to build brand recognition and loyalty. This is because the
members of the channel (doctors) have not been properly convinced to share this same affinity
for the product as does the consumer and they have the power of the prescription pad.
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“automatically” cooperate merely because they are members of the channel. This is evident in
the immediate loss of sales on the branded Glucophage product when an alternative (generic)
medicine was made available.