EIS Final Project: The Pill
Dafna Eshet
Ipshita Jain
Farai Mahoya
Ose Oteze
Vivek Rohilla
Avi Trachtman
The Tuck School at Dartmouth
11/12/2011
Introduction
Sex, pregnancy and contraception have been controversial topics for millennia. It wasn't
until the introduction of Enovid, the first oral contraceptive or “the Pill”, that women were
finally able to control these elements.
In this paper, we investigate how the introduction of the Pill changed the birth control
industry, shaped a new market and how the innovation ecosystem evolved over time.
Evolution of birth control before the Pill
Before the development of the Pill, women all over the world used a variety of birth control
methods, most of which were highly ineffective or even dangerous. The oldest known form
of birth control, with origins in the Bible, is coitus interruptus – otherwise known as the
withdrawal method. The ancient Greeks were the first to document use of various
concoctions consisting of cedar oil and lead ointment as spermicides. In the 1700’s,
Giovanni Giacomo Casanova experimented with various forms of birth control, including
use of lemon rinds as primitive diaphragms/cervical caps. Such was the antiquated nature
or early forms of birth control.
In pre-industrial America, women used homemade herbal douches to prevent pregnancy.
Some remedies required women to inject a water-based solution consisting of salt, vinegar,
liquid chloride, zinc sulfite or aluminum potassium sulfite into their cervix after
intercourse. The biggest innovation in the contraceptive market till that point was the
invention of galvanized rubber by Charles Goodyear in 1839. Goodyear proceeded to use
his technology in the manufacturing of rubber condoms as well as intrauterine devices,
douching syringes, and diaphragms. The intrauterine devices, douching syringes, and
diaphragms were not convenient for women’s use, nor were they extremely effective.
Furthermore, use of condoms, by far the least invasive method, was completely out of
women’s control. Consequently, the Pill fulfilled a crucial need at the time of its
introduction for an effective and convenient contraceptive that women had complete
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control over. The Pill could be taken anytime, anywhere and without anyone else knowing.
No method in previous centuries had ever achieved that level of privacy and female control.
The creation and technological advancement of the Pill
After several years of lobbying for women’s reproductive rights, Margaret Sanger, a
women’s rights activist and founder of Planned Parenthood, approached Gregory Pincus in
April 1950 and pleaded with him to develop a discrete oral contraceptive. Pincus, an
American physician and biologist, had been researching hormones, in particular the
hormone progesterone, which he believed could inhibit ovulation and prevent pregnancy.
Sanger secured a small grant out of Planned Parenthood funds to help Pincus start his
research into what would become the Pill. Pincus’s research soon confirmed that
progesterone prevented ovulation in rabbits and rats. However, his request for additional
funding from Planned Parenthood was denied due to the risky nature of the project. The
research project thus came to a standstill in 1952 due to a lack of funds.
The following year, Sanger introduced Pincus to Katharine McCormick, his second investor.
McCormick, an avid feminist who had feared having children in case they inherited her
husband’s schizophrenia, gave Pincus a $40,000 check and the promise of additional
funding as needed. In 1954, Pincus joined forces with Dr. John Rock, a renowned
Obstetrician/Gynecologist and devout Catholic, to initiate clinical trials in Boston as a step
towards FDA approval. The clinical trials proved to be successful, as ovulation was
prevented in 100% of the women. McCormick, who had been financing Pincus throughout
his research, funded the clinical trials. In total, she invested more than $2 million in the
research and development of the Pill.
On a number of occasions, starting in 1950, Gregory Pincus approached a relatively small
pharmaceutical company, G.D. Searle, requesting funding for the research and development
of the Pill. Pincus’s requests for funding were refused because of the perceived risk
associated with the R&D of such a controversial drug. Not only was the marketing of
contraceptives illegal in 30 states, but the fear of a boycott by the Catholic Church led
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pharmaceutical companies to steer clear of the project. In 1970, Searle’s medical director
reflected:
“No major pharmaceutical manufacturer had ever dared to put its name on a
“contraceptive”. The individual reaction of a very large religious minority in the
United States could not be gauged. The possibility of losing overnight one
fourth of all of our personnel, a considerable portion of our hospital business
and a crippling number of the physician prescribers of our products was not to
be dismissed lightly…”1
After the success of the “Boston Trials” Searle decided to support the R&D project by
supplying Pincus and Rock with the necessary pills for a large-scale trial in Puerto Rico. In
1957, the FDA approved the use of Searle’s Enovid as a treatment for “menstrual
disorders”. In the following three years, an “epidemic” of menstrual disorders swept
through the US, with about 500,000 women requesting Enovid as a treatment. Searle’s
annual revenues from Enovid soared to $37 million, leading the company to push for FDA
approval of Enovid as a contraceptive.
Finally, the FDA approved Enovid as a prescription oral contraceptive in 1960. By 1961, the
number of women on the Pill had increased to 2.3 million. However it wasn’t until Griswold
v. Connecticut (1965) that contraceptives were legally available to married women and
until Eisenstadt v. Baird (1972) that unmarried women in all US states were allowed free
access to contraceptives. 2
Margaret Sanger, the phenomenal leader that brought together the critical partnership of
scientists, donors, and a pharmaceutical company, had finally achieved her goal of an
effective birth control method for women.
1
Tone, Andrea. 2001. Devices and desires: a history of contraceptives in America. New York: Hill and Wang.
p.227. Retrieved October 28, 2011 from: <http://books.google.com>
2
Tone. 2001.
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The Pill’s value proposition
The Pill held various promises for its consumers.3
Reliability
Enovid’s major differentiators (when compared to other existing forms of birth control at
the time) were its reliability and effectiveness in preventing pregnancy. Earlier methods of
contraception were neither safe nor reliable. The Pill promised to deliver on both qualities
to women (it was considered safe when first introduced to the market); they could depend
on it to be 99% effective in preventing pregnancy when taken correctly.
Female control over contraception
The Pill shifted contraceptive decision making into the hands of the female, unlike almost
all existing forms of birth control which were controlled by the male, such as the condom
and “withdrawal” method. The innovation of the Pill was therefore hailed by many women
as an "equalizer" that had given them the same sexual freedom as men had traditionally
enjoyed.
Convenience
A major reason for the low adoption rates of the diaphragm was the high level of
involvement of the doctor in order to insert it. The diaphragm was an expensive birth
control method and in addition, most women felt uncomfortable approaching their doctors
on the topic of contraception, or having a doctor insert their diaphragm. Although the
condom provided a means to bypass the doctor, it required an interruption of the sexual
act, and was controlled by the man. The Pill thus provided women with a discrete form of
contraception that did not constrain their daily routines; disrupt the sexual act; and did not
require them to open their legs for their doctors.
3
For a comparison of birth control methods available prior to 1960, please see Table 1
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“Natural qualities” of the Pill
Dr. John Rock spent the last years of his career in a battle for the acknowledgement of the
Pill as an acceptable contraceptive by the Catholic Church. Although the pill negated the
need to have a menstrual period, it was designed to allow for menstruation in order to
create the perception of being natural, and not inhibiting the female cycle. Since
progesterone and estrogen were not artificial to the human body, it provided women, but
more specifically, Catholic women with a reliable contraceptive that they could personally
reconcile with their religion, regardless of the Catholic Church’s stand.
Menstrual disorder treatment
The original use of the drug, although not its primary use, was as a means to treat
menstrual disorder. The initial approval from the FDA was for menstrual disorder
treatment. While Searle and the drug developers intended for the drug to eventually serve
its main purpose as a contraceptive, they realized that it would be easier to first gain
approval for it as a menstrual disorder treatment, which it did effectively.
The Value Partners
i.
Women of childbearing age
Statistics from surveys show that between 36% and 39% of women who came of age in the
1910’s and 1920’s had sex before they were married. However, as contraception was not
yet widely accepted by society, many women used other methods of preventing pregnancy
that were either ineffective or dangerous (e.g. between the 1930’s and the 1960’s, Lysol
disinfectant was commonly used as a post-coital vaginal douche and is said to have been
the most popular form of birth control). Women who had unwanted pregnancies may have
also gone through illegal abortions, which were sometimes fatal for the mother.
Further, at the turn of the century the American economy started to experience more laborforce participation by women.
In addition to the fact that women’s entry into the
workforce put them into daily contact with men, thus presenting more opportunities for
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them to enter into relationships, their desire to actively participate in the workforce also
meant that they wanted to have control over when and how often they were having
children.
ii.
Doctors (integrators in the eco-system)
When Margaret Sanger realized that her efforts alone would not yield the results that she
was looking for, she decided to get the doctors on-board and started lobbying in support of
the “doctors only” bill that would limit the dissemination of birth control information and
devices to doctors only, in return for political support for her birth control agenda. This
appealed to the doctors immensely, not only as a source for additional revenue, but also
because it essentially gave them medical monopoly over contraception. In addition to
political support, the medical profession, in particular the doctors themselves, had a lot of
credibility (compared to mid-wives, for example) hence they were a very useful tool in
trying to gain support of birth control with the general public as well as government
agencies.
For a long time, doctors were making significant amounts of money prescribing birth
control products such as diaphragms. Birth control became more and more profitable for
all parties involved as it was becoming popular. Given how lucrative this business was,
doctors’ interests were to maintain the public’s perception of them as the experts in birth
control and to retain their roles as the primary providers for birth control medical care.
iii. The FDA
Regulatory agencies such as the Food and Drug Administration gained authority during the
World War II as the government was trying to bolster its efforts to prevent or treat
venereal diseases amongst servicemen. In the years following the war, greater emphasis
was placed on regulation of birth control and making information about contraceptives
available to couples that wanted to explore their options. The FDA thus had a say on how
information about contraception was circulated which had the potential to significantly
impact how successful a form of contraception could become.
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iv. Activist groups (both proponents for and adversaries against birth control)
There were many adversaries against birth control such as the Catholic Church and
religious fanatics who believed that birth control and premarital sex were sinful. Groups of
pro-birth-control activists were women lobbying to have more active roles in the economy,
and groups looking to use birth control as a way to end poverty in the third world. The FDA
was pressured in 1957 to approve the Pill, largely due to these activists.
v. Political parties
Contraceptives were banned by the U.S. Federal Law via the Comstock Act of 1873 which
remained in existence, though in weakened form, through 1965. The Act banned
pornography but also made illegal all contraceptive methods, educational materials such as
descriptions of contraceptive methods and other reproductive health-related materials.
The courts and political parties had the power to overturn these laws as they did in 1936
by declaring certain parts of the act, i.e. the ban on contraception, to be unconstitutional.
However, some portions of it remained enforceable even when Enovid was brought to
market in 1960.
Politicians and government officials continued to distance themselves from the birth
control discussion, with President Dwight Eisenhower stating that birth control is “not our
business” and “is not a proper political or government activity or function or
responsibility” in a press conference in 1959.
vi. The American Medical Association
The American Medical Association (AMA) is the largest association of medical doctors and
medical students in the United States. The AMA was instrumental in bringing other forms
of contraception such as the diaphragm into mainstream medical practice. In 1937, the
AMA officially recognized birth control as an integral part of medicine which added
credibility to the practice of birth control medicine.
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The Pill’s leadership prism at time of introduction to the market
Value
Partners
Benefits
Women
-
Doctors
-
-
FDA
-
Pro activist
groups
Catholic
Church
Avoid unwanted pregnancies
Workforce participation
Sexual freedom
Continue as experts in birth
control medicine
As popularity increases,
contraception becomes more
widely acceptable, increasing
patient base
Convenient to prescribe,
compared to having to install
diaphragms, which doctor’s
considered beneath their
profession
Greater control over potential
crises associated with illegal
contraception industry
Fighting world poverty
- Women’s freedom of choice
with birth control
- Widespread use of oral
contraception
- N/A
Political
parties
- Working women promoted
industrialization
- Political support and loyalty
from large population of
women
AMA
- Lower incidence of illegal
activity once birth control is
regulated
- Safer medical practices
Costs
Surplus (+)
/ Deficit (-)
- Stigma attached to
premarital sex
- Side effects may be severe
- Cheaper than diaphragm,
thus lower profits per
patient. However,
diaphragm enjoyed only
low adoption rates
- Easy to administer, thus
may result in less patient
visits over the longer term
+
- Loss of credibility
associated with approval of
dangerous drugs
- Complications arising from
off-label use of the Pill
- N/A
+/-
- Resolutely opposed to
artificial birth control
- Sees premarital sex as sinful
- Political pressure from
religious groups
- Moral dilemma between
religion and social
responsibility and
entitlements
- Moral dilemma between
religion and social
responsibility and
entitlements
-
+
+
+/-
+
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At its introduction, the Pill’s benefits outweighed the costs for most of the parties involved,
except for the Catholic Church which turned out to be not as significant as initially thought
in taking the Pill to the market.
Searle’s uncertainties in the birth control market
In the years following the distribution of the Pill, Searle increased their sales by 27%
annually. Enovid was in fact, the first non-essential drug to become a blockbuster.
However, they had gone into the market with some uncertainties with regards to their
value partners, all of which they perceived as necessary for success.
Loss of FDA approval due to side effect profile
Enovid, although effective, had side-effects that had not been thoroughly investigated.
These side effects, caused by a ten times higher than needed dosage of synthetic
progesterone, included life-threatening blood clots. Given the FDA’s increasingly important
role in drug success, Searle dealt with the adoption risk by staggering the end use of
Enovid, but also had to be conscious of this player even after Enovid was brought to
market.
Competitive pressures
At the same time that Enovid was gaining traction in the market, competitors were
launching their first oral birth control such as Ortho-Novum made by a Johnson and
Johnson subsidiary in 1963 and Norlestrin made by Parke-Davis also in 1963.
Building the ecosystem
Market entry
Searle took cautionary measures in product development and in the way they marketed
Enovid, in hopes of avoiding unnecessary controversy with the introduction of Enovid to
the market. The company adapted its strategy based on perceived threats from the Catholic
community, government and law enforcement officials, and the FDA.
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Introduction as treatment for menstrual ailments
Searle first sought FDA approval of Enovid as a treatment for menstrual ailments. This
allowed Searle to decrease any controversy from the entrance of the product to the market,
assess the potential backlash from opposing parties including the religious Catholic
community.
“Natural” remedy
The process by which Enovid worked could theoretically allow women to avoid
menstruation for extended periods of time. However, Rock and Pincus wanted the Pill to be
perceived as a natural process both in the eyes of women and in the eyes of the Church.
Furthermore, Rock was hard set on convincing the Catholic Church that the Pill should not
fall under the Vatican’s opposition to contraceptives. Therefore, Enovid was originally
packaged with 21 active pills, thus allowing for menstruation and maintaining the
perception of a natural menstrual cycle.
Marketing as a contraceptive
Enovid was originally marketed to married women only. Searle was faced with stringent
laws surrounding the distribution of contraceptives to women and uncertainty regarding
the Catholic community’s response to the Pill. Thus, the company decided to forfeit
potential sales from single women in order to avoid association of the Pill with promiscuity
and possible criminal charges. An Enovid sales print advertisement (Exhibit 1) focused on
key words Family, Planning and Your, i.e. your marital partner. The advertisement publicly
promoted Enovid as a decision that should be made jointly by a married couple.
Aligning the ecosystem
When discussing alignments, the most crucial fact to remember is that Searle needed first
and foremost to ensure adoption from the law and from society. There were no immediate
risks such as co-innovation (except, of course, other companies that were developing the
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exact same thing – the Pill). Despite the existence of the condom and other contraceptives,
no real market substitute for providing an answer to the needs Enovid was addressing.
The FDA – The approval of the Pill by the FDA came in two stages. The first application for
approval of Enovid came in 1957. However, this application was sought out, not for
Enovid’s contraceptive qualities but rather as a treatment for menstrual irregularities and
for the treatment of infertility. Although the FDA was a “gate-keeper” in bringing Enovid to
the market, we did not consider them to be the key player in the ecosystem, rather as an
adopter as their approval of Enovid was not what ultimately dictated the drug’s success or
failure. The approval of the drug by the FDA, many experts claimed later, might have been
premature and was attributed to the FDA’s desire to approve the drug as fast as they could,
without necessarily conducting the appropriate tests. The main reason for this was
international pressure for population control. One researcher, Linda Grant, claimed that the
Pill is “the poorest-conducted, most cursory trials of any pharmaceutical ever licensed by
the FDA”. This fact, later on, resulted in the somewhat bleak outcome for Searle and Enovid
in later years.
The law – While approved by the FDA, the pill had one other major obstacle it had to
overcome: Federal and State laws. In 1965, the US Supreme Court finally struck down the
Comstock laws regarding the illegality of contraception. Using contraceptives was illegal in
over half of the American states by the end of the 1950’s. However, these states rapidly
changed their opinions, and one by one, legalized the use of contraceptives. This was done
via lobbying but even more-so by the widespread and rapid use of the Pill.
The church – John Rock and Searle initially thought that the Church’s consent would be
crucial for the Pill’s success. Efforts to convince the Church to give their blessing to the Pill
had been fruitless in the 1950’s. In 1951, the Pope announced that the Church would
sanction the use of the rhythm method as a natural form of birth control but was resolutely
opposed to the distribution of the Pill. However, history has proved that women, including
Catholic women, used the Pill regardless of their faith. This misconception of the church’s
importance in the eco-system, just like the premature approval of the pill, sets yet another
example for the lack of a concise penetration strategy by Searle. A more concise entrance
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strategy would have never attempted the inevitably futile efforts to convince the church,
especially when this was not needed at all. After all, the fact is that not only did the vast
majority of catholic women in the states use the pill by the end of the decade, but also that
the vast majority of catholic physicians issued it.
Culture and women’s liberalization – Perhaps one of the most important alignments for
Searle was not with a certain party of company, but with the era. In 1953, the Kinsey
reports were published, providing statistical evidence of human sexuality. Already then,
half the women in the reports attested for having sex before marriage. Women’s desire to
join the workforce has also been displayed throughout the 50’s, and enabled to a large
extent thanks to the pill. In many ways, The Pill supported the upsurge of women
liberalization, a movement that was not caused by the Pill, but simply was helped by it.
However, we do acknowledge that the Pill not only supported women’s liberalization but
also contributed to the enhancement of the movement.
Yet another social factor that helped in promoting the Pill, and at the very least contributed
to the poor examinations done in regards to the Pill, by the FDA, was the western world
movement to control the world’s population. This was a school of thought which was
predominant for various reasons in the western world post WW2, and laid its own
foundations for many of the reasons that led contraceptives to be so popular throughout
the 1960’s.
On the other hand, Searle did act in a world on a brink of change between conservatism and
liberalization, and this was important on several accounts. The necessary change in the law
that was required for the Pill to succeed. The alignment with the Church on one hand as the
conservative delegate, and with women movements on the other, as the liberal movement
delegate, and of course – with the FDA, without which, no drug can be produced or
distributed.
Women of childbearing age – For women however, Enovid was more than just a menstrual
regulator. Many women understood the contraceptive qualities of the pill before it was
marketed or approved as such. More than 500,000 women were using the pill by 1959, a
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year before the pill was approved for contraception. Needless to say, many of them
probably used it as a contraceptive. This constituted as a soft entrance for the pill into the
contraception industry. In 1960, the pill was approved by the FDA as a contraceptive, first
in its 10 milligram dose, and later in the 5.0 milligram and 2.5 milligram doses as well.
Physicians – The key players in the ecosystem, however, were the doctors, as they
controlled access to the end users and were a trusted source of information. Sanger had
lobbied successfully to get doctors on her side by having the law mandate them as the sole
prescribers of birth control medications or devices. Shortly after Enovid was on the market
as a menstrual disorder treatment, doctors made over 500,000 prescriptions. The Pill’s
market had reached its critical mass!
The evolution of the ecosystem
Side-effects – in 1961, the American public started questioning the safety of drugs as the
result of the Thalidomide Tragedy, a drug distributed in Europe which caused sicknesses
and birth defects. This proved to be disastrous for Searle as rumors and later evidence of
Enovid causing various side effects, including heart attacks and blood clots (due to the
enhanced dosage), started appearing which in effect, handed the first mover advantage to
Searle’s “safer” and less scandalous competitors.
Physicians – Searle used both a push as well as a pull mechanism to get doctors on board.
On the one hand, they promoted the Pill to physicians, starting at 1957 when the firm sent
letters to leading physicians regarding the Pill. On the other, due to positive publicity of the
Pill in popular magazines, women were seeking it out themselves. The pill as a product was
unique in that it gave a perfect answer to a pressing need. Therefore, the concept needed
little or no marketing. Rather, Searle should have put their efforts in marketing their brand
name, and not the concept, or alternatively created high switching costs for the physicians
(e.g. long term contracts with hospitals) which would have probably resulted in much
improved market shares during the second half of the 1960’s when so many other
companies offered their own oral contraceptives.
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By 1965, 95% of all physicians in the US administered an oral contraceptive. However,
unlike any drug before, the main reason for the expansion of contraceptives was derived by
demand, when more often than not, patients were proactively asking for the Pill.
Competitors – as stated earlier, Searle’s mistakes enabled competitors to enter the market
and eventually dominate it. Syntex which was the second runner during the 1950’s to
Searle’s efforts in producing the Pill started distributing their own version, Ortho Novum in
1962 and soon became the market leaders. In fact, 13 major drug companies developed
their own version of the Pill in the years to come, and towards the second half of the
decade, Searle indeed lost its leading position.
Searle is a great example of the first mover’s disadvantage. Despite several other
companies, including Pfizer and Syntex having the ability to product the Pill by the end of
the 1950’s, Searle was the only firm that actually went on and executed this bold move.
However, marketing mistakes and circumstances which were rather too favorable (thus
approving doses much larger than actually needed) hurt the firm in the long run.
Expectations vs. Results
Sanger and McCormick, avid feminists and the first investors in the Pill, had high
expectations for it. However, their expectations were limited towards the social value to be
derived from the Pill rather than any expectations of the size of potential profits.
Consequently, they would have seen the impact of the Enovid pill today as a huge success.
Searle, first approached by Pincus in the early 1950’s, was unsure of the potential market
value of an oral contraceptive. To Searle executives, the notion that healthy women would
be willing to take medication on a daily basis, simply to avoid pregnancy, was implausible4.
Thus they seriously underestimated the market potential of the Pill. It wasn’t until the
success of the “Boston Trials” that Searle decided to support the R&D project in a low-key
capacity, by offering Pincus and Rock the necessary supply of pills for a large-scale trial in
Puerto Rico. Searle’s president instructed Pincus to advertise his success but to “avoid our
4
The Pill. Retrieved October 28, 2011 from: <http://www.pbs.org/wgbh/amex/pill/peopleevents/e_searle.html>
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being associated, even by implication”5. Searle acted behind the scenes to promote press
and articles about the new innovation into mainstream media including Time, Fortune,
Ladies Home Journal and Vogue6. Thus, Searle had the opportunity to gauge the potential
backlash from the public, as well as the government, with limited risk.
By the late 1950’s, as Searle saw sales of Enovid soar as a treatment for menstrual
problems, the company started to mobilize towards sale of The Pill as a contraceptive.
Searle’s personnel continued to evaluate the potential threat to other parts of the
company’s business. After learning that the perceived threats had been over estimated, the
company continued to publicly push towards FDA approval of Enovid as a contraceptive.
Searle’s gamble paid off; the company had a monopoly on sales of oral contraceptives for
two years. By 1962, the year the second oral contraceptive was introduced to the market,
1.2 million American women were taking daily doses of The Pill; this number nearly
doubled by the next year.
Adoption of oral contraceptives in the US
6.5 million daily users, by 1965
5
Tone. 2001.
Spar, Debora L. and Huntsberger, Briana (2005). The Business of Birth Control. Harvard Health Policy Review
Vol. 6, No. 1, Spring 2005. pp. 6-17.
6
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Hence, considering Searle’s early expectations for the introduction of Enovid, the product
was a great success. Enovid turned out to be Searle's bestselling product for years, with
sales peaking at $89 million in 1965 and net profits reaching $25 million every year
between 1964 and 1969.7 And yet, Searle had only invested a fraction of the profits into
further R&D spending.
Finally, Searle didn’t suffer the consequences of a ban by the Catholic Church, nor were its
executives jailed for the violation of statutes that prohibited contraceptive use.8 Searle won
its public relations battle by helping create demand pull for their product.
What they did right
Based the huge success of oral contraceptives, and the advances of women in the
workforce, Searle definitely took the right step by entering this market. They were very
strategic in using a soft entry by starting in the menstrual regulation field, and then moving
mainstream. This move gave them the momentum with the doctors, their initial target key
players they needed to go forward.
Searle was quick to notice a shift in power of their ecosystem, as women became the
primary drivers of success for Enovid, requesting it from their doctors for its contraceptive
“side effects” before it was approved. They were able to use this momentum to push the
other adopters into accepting Enovid as a contraceptive by marketing to this new key
player in the system, the women. Enovid was the first pill approved for regular use by a
healthy person. This meant that women did not have to be ill to go to their doctors, and
Enovid did a great job of targeting the industrial-age women through media outlets and
marketing advertisements.
7
Gibbs, Nancy (2010) The Pill at 50: Sex, Freedom and Paradox. Retrieved October 28, 2011 from:
http://www.time.com/time/magazine/article/0,9171,1983884,00.html
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As the market became more cutthroat with competitors diving in, Searle sought an escape
strategy, by trying to market Enovid as a cure for acne in 1965, at the peak of their sales.
Had this been successful, Enovid would have opened up the market considerably, to include
men. Searle was unfortunately hampered in this attempt by the FDA, due to several
mistakes that will be addressed next.
Mistakes along the way
Today, The Pill is the most widely adopted female birth control method in the United
States. G.D. Searle missed a huge opportunity to have maintained a dominant share of this
market. Instead, Enovid is today an obsolete birth control pill, with Searle now a part of
Monsanto, due to a 1985 acquisition that diverted its focus to agricultural products. There
are several contributing factors to Enovid’s demise in the birth control market. These are:
First Mover Disadvantage
Despite having a monopoly on the birth control market in the early sixties, this success
came at a high cost. As the first company to produce such a highly controversial product,
Searle spent a lot of resources building credibility and attracting adopters such as the
Catholic Church, the FDA, and the state and federal legislators. All this was front-line battle
was being fought while competitors focused on differentiating their products from Searle’s.
A large, inefficiently sized market like the United States meant that eventually, they would
have to compete on quality of their products. However, they were not prepared for that
either, due to their preoccupation with the attacks on the side-effects of their pill.
The additional negative attention being drawn to Enovid’s harmful side effects did not ease
the burden, with John Rock and other top scientists spending valuable time conducting
studies and disputing claims, instead of focusing on how to improve the drug. By the time
Searle came out with a lower dose of Enovid that had less harmful side-effects, competitors
were already in the market claiming to have those same benefits over Enovid’s original
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product9. Enovid was suddenly faced with a tarnished brand due to the high number of
reported blood clots and damaging side effects it produced in its early adopters, and on the
other side, growing competition for lower dosage varieties.
Lack of Commitment from executive team: Product Innovation
The highly controversial nature of The Pill during the late 1950’s made Searle itself resist
the innovation, refusing to fund it. This set a precedent for the lifetime of Enovid, with
limited effort on the part of the executive to dedicate resources to this pursuit. With
increasing negative publicity on the harmful side effects of the high-dose Enovid, Searle
was even more reluctant to put its company’s name behind this product, and only remained
in the birth control market due to the lucrative returns of The Pill.
By the time lower dose varieties of Enovid were proposed by John Rock, Searle faced an
obstacle with the FDA, which required that the lower doses be tested as rigorously as the
original product. This happened in parallel with other competitors that had learned from
Searle’s mistakes and could get to market with their lower doses and competitive prices.
In order to combat Enovid’s tarnished brand, Searle created a new product line, called
Ovulin. This product line was unsuccessful in getting FDA approval, at a crucial time when
they were losing market share to rising competitors in 1965. By the time they focused on
creating a new product line that was not associated with Enovid, it was too late.
Lack of Commitment from executive team: Process Innovation
In the meantime, while Searle enjoyed a large share of the market during the early 1960’s
the company failed to keep up with its customers, and any inconveniences they might have
faced with The Pill. Enovid’s 100% success rate heavily depended on correct dosage
maintained over a long-term period. Otherwise, it was just as ineffective as other birth
control methods in the markets.
9
Chemical and Engineering News, Volume 42, Number 10: “Competition Sharpens in Oral Contraceptives. FDA
approval of drugs from Parke Davis and Searle will increase marketing push; lower dosages will bring lower prices”
http://pubs.acs.org/doi/pdf/10.1021/cen-v042n010.p023
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When approached by a co-innovator, David Wagner, that presented a new way to ensure
dosage could be accurately tracked, Searle turned it down. This innovator instead, turned
to an upcoming competitor, Ortho Pharmaceutical, which then introduced its first birth
control pill – Ortho-Novum, with a dial pack that clearly distinguished its pill from Enovid.
Searle stubbornly continued to package its pill in a bottle that provided no way of tracking
pill consumption, and eventually lost market share due to the inconvenience it presented.
By the time they switched in 1964, Ortho Pharmaceuticals had already established a
foothold in the market.
Figure 1 below shows Searle’s (red) market share of Enovid versus competitors over time
Sales
Enovid = 85M
Time
1965
Diversification of company strategy through acquisitions
By 1965, Searle had hit its market peak and was on the verge of a decline. Earnings
decreased to $23.2 million, down from $24.2 million the previous year; while industry
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competitors posted net profit increases of 19.4 percent, Searle's dropped 4.4 percent. It
was under these circumstances that Daniel Searle initiated an ill-fated policy of acquisition.
Purchasing a dozen small companies with a wide variety of products, including nuclear
instrumentation, medical electronics, and veterinary and agricultural products, Searle
diversified into unfamiliar waters instead of focusing on Enovid10.
The diversification of interests due to these acquisitions led to a lack of focus on Enovid,
and conflicting organizational priorities.
Alternative strategies that may have provided continued market dominance
First mover opportunity
Searle had the opportunity, as the first mover in the industry to maintain the continued
loyalty of its initial customers, by marketing its brand and working closely to understand
the consumer. As we saw in the case of the “pill cam”, being first to market provides certain
advantages, such as market data that could have been valuable to Searle in ensuring Enovid
remained the large market dominant it started off as. Searle already had the loyalty and
relationships with the key customers – women.
Initiation risk sharing
Searle could have partnered with other companies, instead of racing to the market, in order
to ensure more people shared the risks. They could have aligned companies with the same
incentives, but different markets such as partners in different geographic markets where
they had no presence, in order to further improve the end product before it went out to
market and got burned. Margaret Sanger’s incentive for bringing together the alliance of
Pincus, McComick, Searle and Rock was for an effective female birth control, which she has
successfully achieved today. Instead of only relying on her support, Searle should have
recognized when to step in and become the leader in the changing ecosystem as new
competitors came into the market.
10
http://www.fundinguniverse.com/company-histories/G-D-Searle-amp;-Co-Company-History.html
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Clear and defined strategy
In order to avoid conflicting priorities within the company, Searle could have broken out
Enovid’s division to better focus and align one core strategy, instead of expanding too
quickly through the late 1960’s through acquisitions of companies in different industries.
The Pill was never within Searle’s core strategy in the first place, with support coming from
private donors instead of from within the organization. Initially Searle’s strong brand name
might have proved crucial in providing credibility for the essential adopters in the
ecosystem, but as the company expanded and incentives got misaligned, the birth control
division should have broken up into a new organization to focus entirely on the birth
control industry.
Searle missed out on a great opportunity to sell its birth control division at its peak, partly
due to its already tarnished reputation in the market, and its publicized struggles with the
FDA on other birth control product lines.
Co-innovation adoption
Early adoption of co-innovations, such as the pill counter pack would also have been crucial
to close process gaps and ensure weaknesses were eliminated against upcoming
competition. Had Searle stayed close to its primary consumers and understood the
weaknesses presented by an unreliable bottled packaging that could not be tracked, it
would have not turned away the dial pack, and allowed it play into the hands of its main
competitor, Ortho Pharmaceuticals.
Back to basics
Enovid was well known for menstrual regulation in the market, even before it became
more successful as a contraceptive. Searle could have focused new product lines to target
this segment of the market, voluntarily retreating from the birth control market in order to
let its negative publicity boil over. They could have continued innovating on menstrual
health, or found another niche market that was in line with their expertise. Instead, they
spent resources on the pill for acne, which was not successful.
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Conclusion
Although Searle enjoyed a short period or record revenues and profits, we do not consider
Enovid to be a success story given the potential that the Pill, as an innovation, held when it
first came to market. Searle had a lot of data from clinical trials that they could have
leveraged and used in continued research and development but they were caught up in the
day to day management of their business that the competition snuck up on them. For
Searle, first mover was definitely not an advantage.
Additional Resources
The Pill: A Biography of the drug that changed the world, by Bernard Asbe
Reputation and power: organizational image and pharmaceutical regulation at the FDA, by
Daniel Carpenter
The Business of Birth Control: Debora L. Spar and Briana Huntsberger
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Appendix 1: Birth Control Methods: Comparison Chart11
Method of
Birth Control
Efficiency in
preventing
pregnancy1213
Advantages
Shortcomings
Methods available before the advent of pill ( Pre 1960)
Constant
abstinence
Male condom
100%
- Very effective
- Difficult to practice
- Provides limited control
to women (dependent
on societal norms)
85%
- Moderately effective
as a birth control
measure
- Effective against STDs
- Out of women’s control
Diaphragm
84%
- Moderately effective
- Inconvenient
- Requires frequent visits
to a physician
- Expensive
The rhythm
method
75%
- Doesn’t require
physician’s assistance
- Natural
- Requires abstinence for
~25% of a month
- Relatively unreliable
Spermicide
71%
- Effective as secondary
contraceptive
- Cheap
- Relatively unreliable
73%
- Cheap
- More effective than
spermicide
- Relatively unreliable
- The lazy choice…
- This is what you
practice if you do want
to get pregnant
Withdrawal
("Pulling
Out")
Not Using Any
Birth Control
15%
11
Data retrieved November 6, 2011 from
http://kidshealth.org/teen/sexual_health/contraception/bc_chart.html#cat20018
12
Percentage of women not to get pregnant within a year, using each type of birth control
13
These are current statistics: we assume that efficiency rates for methods such as condoms and diaphragm were
lower 50 years ago
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Appendix 2
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