The marketing of prescription drugs (almost always to those that have health insurance coverage) is a stupendous task. Just look at the advertising budget of pharmaceutical companies. In fact, the research-driven pharma sector actually spends more on marketing than on R&D. It is not easy to convince an over-medicated nation to buy even more drugs. For the same reason, pharma tries to use the government to let it sell more drugs. According to the Center for Public Integrity, the pharmaceutical and health products industry spent $758 million on lobbying from 1998 through June 30, 2004, including $92 million by PhRMA itself, $54 million by Pfizer, $34 million by Merck and $30.3 million by Schering-Plough. The total is more than any other industry spends on lobbying, according to the center's report.
I have been trying to find growth opportunities in a highly underserved segment - the uninsured. Marketers often wrongly assume that all uninsured Americans (I am using the term "American" here to include all residents of the United States, whatever their legal status) are alike. Not true. In fact, millions of uninsured Americans earn more than some of their insured colleagues.
Let me discuss one specific case example that clearly shows the tremendous opportunity that exists in serving the uninsured. Let us look at dental coverage. Over 108 million children and adults lack dental insurance, which is over 2.5 times the number who lack medical insurance, according to a 2000 report from US Department of Health and Human Services entitled "Oral Health in America: A Report of the Surgeon General."
Consumer packaged goods companies (CPG) like P&G and Colgate Palmolive were among the first ones to recognize that those without dental coverage almost never visit a dentist unless they have no choice. But who does not want whiter teeth? In fact teeth whitening products appeal even to those with dental coverage because teeth whitening is not covered by most insurance plans (though those that visit the dentist regularly may not always need whitening). In other words, the potential market size is in tens of millions just for teeth whitening.
In recent years a range of products has been introduced, and while competition has intensified, the pie keeps growing. A more recent trend is to sell do-it-yourself kits that mimic the treatment in a dentist's office. Some use the same gels that dentists use, while others use laser light as well to make the process even shorter. Our estimate indicates that growth of some of these new products is in the 20-30% range.
Crest Whitestrips Premium teeth whitening strips ranked at #2 among the top new product launches in the US, according to a report by Simon Pitman. An aggressive advertising campaign from Crest also allowed it achieve two other teeth whitening products in the top ten – Crest Whitening Expressions toothpaste and Crest Night Effects teeth whitening strips. The three product launches enabled Crest to corner total sales of $199 million, a significant achievement. Although over the counter teeth whitening products are a relatively new phenomenon, it has risen rapidly to become a $500 million industry in 2004.
What does it mean for you?
- It will be hard and costly to sell snow to Eskimos. Think of selling it to our good friends on the equator.
- Never assume anything. Always develop facts through research and validation. Not all uninsured are living in poverty.
- The best new business opportunities come from fulfilling a need in an underserved segment.
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