Challenge of Adoption Chain:
The Launch of World’s First Oral Treatment
for Premature Ejaculation in Korea
Angie Sewon Cho
Jeong-Suh Choi
Arunprasad Durairaj
Jong Yoon (Jeff) Kim
Young Joon Suh
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
Executive Summary
Almost a third of men worldwide suffers from premature ejaculation (PE) and
given there is no viable treatment, the launch of Priligy, the world’s first, oral
pharmacologic agent with regulatory approval was expected to become the secondcoming of Viagra and revolutionize the pharmaceutical industry. The new drug was
first launched in Korea with high expectations and while the initial market reaction
was stellar, Priligy soon lost momentum as sales dropped by 64% within a year of its
launch. Some have blamed the high price and poor marketing, but they still cannot
atone for the limited success given people’s high demand and willingness to pay to
improve their quality of life.
Hence, this paper first looks at the market and explores the competitive
landscape of various PE treatments. Second, the report attempts to show that the high
price and poor marketing were not the real factors, but there lies a more fundamental
issue to the rapid drop in sales of Priligy. The paper then explains that the ecosystem
of Priligy basically consists of four major stakeholders – the manufacturer (Janssen),
hospitals, pharmacy and patients – and five additional stakeholders, including the
government, sales forces, primary care urologists who carry out PE-related operations,
media, and urology-related organizations. Among the stakeholders, the primary care
urologists have demonstrated to be reluctant about adopting Priligy as they would lose
revenue from PE-related operations. Third, this report shows the adoption values of
each stakeholder and analyzes why the ecosystem does not work well, even though the
adoption value is considerably increased as a whole. Finally, based on the analyses,
the report concludes with recommendations on how to address the aforementioned
adoption issues.
1
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
1. Background
Market Overview
Premature ejaculation (PE) is a medical condition in which a man ejaculates
earlier than he or his partner would like him to. While the quantitative definition of PE
varies since there is great variability in how long it takes men to ejaculate and how
long both partners want sex to last, most sex researchers generally agree that a man
suffers from PE if he ejaculates within 1.5 minutes of penetration.1
Quantifying the market size, however, has proved to be difficult as men with
intravaginal ejaculation latency time (IELT) below 1.5 minutes could still be “satisfied”
with their performance and do not report themselves as having the disorder while men
who have IELT above two minutes may be distressed about their conditions and report
themselves as having the symptom. Regardless of such high subjectivity, PE is
arguably the most common male sexual dysfunction that affects as many as one-third
of men at some point in their lives. The implication of PE is more than just a
dysfunction as it can severely impact the quality of life, affecting both the physical and
emotional well-being of patients and their partners as James H. Barada, M.D.,
urologist and board member of the Sexual Medicine Society of North America (SMSNA)
pointed out.2
Despite such high unmet needs, there has been no reliable cure to PE so far.
Hence, when Janssen Korea announced the launch of its new revolutionary drug
called Priligy that serves as an effective treatment of PE in October 2009, it was
ardently welcomed by the market. Many believed it would be the second-coming of
Viagra and significantly alter the landscape of the pharmaceutical industry.
What is Priligy?
Initially developed by Eli Lilly & Company as an anti-depressant, Dapoxetine
(which is later branded as Priligy) was sold to Janssen, the holding company of
1
http://onlinelibrary.wiley.com/doi/10.1111/j.17436109.2005.00069.x/abstract;jsessionid=3083CDCC67C243748F73F407762B5599.d03t01
2
http://www.drugs.com/nda/dapoxetine_041204.html
2
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
Janssen for $65 million and future royalties in December 2003. 3 The safety and
effectiveness of Dapoxetine for the treatment of men with PE were studied in five,
double-blind, placebo-controlled, Phase III clinical trials which involved over 6,000
men from 30 countries worldwide.4 Based on data from the Phase III trial, a report was
published in the British Journal of Urology that concluded Dapoxetine not only
significantly increases time before ejaculation by 308%, but it also improves measures
associated with PE, including reduction of personal distress, interpersonal difficulty
and improvement in the satisfaction with the sexual intercourse. 5 Dapoxetine was
then submitted to the U.S Food and Drug Administration (FDA) for approval as a
treatment for PE by Janssen in December 2004, but was denied in October 2005 and
has yet to be approved despite further clinical trials. The exact reason for the FDA
denial is not known, but it is believed that the lack of viable data on the long-term
safety of Dapoxetine on humans was the main pitfall.6 Contrary to the struggles of
gaining approval in U.S, Dapoxetine has been more successful in Europe as it has
been approved by several countries. Since receiving its first approval in Sweden and
Finland in February 2009, Dapoxetine has been approved in Austria, Portugal,
Germany and Italy.7 It is anticipated that more approvals are soon to come from other
European countries. In Asia, Korea was the first country where Dapoxetine was
approved in June 2009 and subsequently first launched.
2. Competitive Analysis of Priligy
While Priligy is the world’s first, oral pharmacologic agent with regulatory
approval, there have been some other practices to treat men with PE in Korea.
The first and most prevalent method is to administer a local anesthetic cream
or spray on the shaft of the penis shortly before intercourse. It was especially widely
used a few years ago as they are inexpensive (around $2), easy to obtain (it does not
require any prescription and is available at pharmacies and convenient stores) and are
immediately effective upon usage. However, the biggest problem to this solution is that
3
http://www.dapoxetinereview.com/dapoxetine_fda.html
http://www.news-medical.net/news/2007/12/10/33329.aspx
5
http://www.dapoxetineonline.com/index.html
6
http://www.saluspro.co.uk/generic_priligy.htm
7
http://www.tradingmarkets.com/.site/news/Stock%20News/2170588/
4
3
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
it may hinder orgasm of both the patient and the partner. Furthermore, it can cause a
distressing skin reaction in either partner, with intense itching, redness and soreness.
Most importantly, it is only effective to those with penile hypersensitivity.8
Anti-depressant is another option. A side-effect of certain anti-depressants such
as clomipramine, fluoxetine and sertraline has been known to delay male climax by
taking them a few hours before intercourse.9 While prescription by a doctor is required,
anti-depressants are relatively cheap as they are covered by the medical insurance in
Korea. 10 However, it is ineffective to males with penile hypersensitivity as it is a
psychiatric medication. Moreover, more than two weeks of medication is necessary for
anti-depressants to be truly effective. Perhaps the biggest downside is that antidepressants are powerful drugs that last a long time in the body and have a
considerable list of potential side-effects with a potential for causing great harm if
administered improperly.
The third option is through a medical operational procedure called dorsal nerve
neurectomy. Administered to patients with penile hypersensitivity, the dorsal branch
of dorsal nerve is cut to decrease sensitivity of glans penis.11 The biggest benefit of this
option is that it is considered a permanent treatment as the main limitation of other
options is the recurrence of PE after withdrawal of medication. However, there are
many concerns with this approach. First, hypersensitivity of glans penis as a cause of
PE is still controversial. Second, dorsal neurectomy bears a relatively high level of risk
as it is not an established treatment due to the uncertain pathophysiology,
invasiveness and side effects, for example, numbness paresthesia, pain for neuroma,
Peyronie’s disease and even erectile dysfunction.12 Hence, it is only performed by a
limited number of urologists at private clinics. Third, dorsal neurectomy is not for
every patient and is only operated to those who passed the suitability test. Fourth, it is
also the most expensive option as the total price including the operation itself and post
treatment ranges between $3,000 and $5,000 in Korea. Finally, just like the
8
9
http://www.netdoctor.co.uk/sex_relationships/facts/prematureejaculation.htm
http://findarticles.com/p/articles/mi_m0689/is_3_57/ai_n25126183/
10
http://www.fnnews.com/view?ra=Sent0901m_View&corp=fnnews&arcid=0921893588&cDateYear=2010&cDate
Month=02&cDateDay=05
11
http://www.nature.com/ijir/journal/v16/n6/full/3901226a.html
12
http://www.ncbi.nlm.nih.gov/pubmed/9698671?dopt=Abstract&holding=npg
4
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
anesthetic cream or spray, the dorsal neurectomy is ineffective to males who suffer PE
from psychological reasons. Despite these limitations, dorsal neurectomy is still
performed in selective patients who do not respond to conventional treatments.
There are other alternatives ranging from the Masters-Johnson method and
cognitive behavior treatment to special constriction devices, drugs by nasal inhalation
and folk remedies that each comes with its set of pros and cons.13 In the end, a lot of
them are considered controversial as they are complicated, not proven, have limited
positive outcome or have potential big side effects.
Given such competition, Priligy was perceived to be a breakthrough remedy and
was often compared to Viagra that was introduced a decade ago. It seemingly fixes
many of the inherent problems that incumbent solutions have while providing reliable
performance. According to Janssen’s field test against 6,000 patients worldwide, IELT
of the serious PE patients increased from an average of 0.9 minute to 3.5 minute, or
about 400% increase. 14 It also does not compromise the pleasure as with the
anesthetic cream or dorsal neurectomy which essentially ‘damps down’ the sexual
sensation in the penis. Priligy is convenient to use as well since it is orally
administered; patients can take Priligy 1~3 hours before the sexual intercourse and
the effect lasts for the next 7~8 hours. Finally, Priligy has low risk given the
medication is completely discharged from the body within 24 hours of administration.
The pros and cons of each major solution can be summarized as below:
Solution
Priligy
Anesthetic
cream/spray
Pros
Cons

Regulatory approved

Proven performance

Convenient to use

Low risk

Inexpensive

Easy to obtain and administer

Immediately effective

Require prescription

Relatively expensive

Not a permanent solution

‘Dulls down’ sexual sensation

Not a permanent solution

Only effective for patients with
penile hypersensitivity
13
http://www.netdoctor.co.uk/sex_relationships/facts/prematureejaculation.htm
14
http://www.ilyoseoul.co.kr/show.php?idx=88219&table=news_economy&table_name=news_economy&news_sec=003
5
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
Solution
Anti-
Pros

depressant
Dorsal
neurectomy
Cons
Relatively cheap as it is
covered by insurance


Require prescription

Not a permanent solution

Ineffective for patients with
penile hypersensitivity
Permanent treatment

Possible severe side-effects

Expensive

Not an established treatment

High risk

Only effective for patients with
penile hypersensitivity
The competitive landscape of PE solution industry can be illustrated as below:
6
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
3. Janssen Korea’s Market Launch Strategy and Execution
Closely following the success formula of Viagra, Janssen Korea’s market launch
strategy was focused on two things: Learning consumer’s purchase intention of Priligy
and increasing product awareness.
According to an extensive online survey conducted by Korea Andrology Society
in May 2008, 27.5% of Korean males reported to have symptoms of PE, but only 7.5%
of them were being treated by doctors. If Priligy were to become available, 42.6% of the
respondents with PE symptom were willing to try out the drug and interestingly, even
51.9% of the non-PE respondents expressed interest in taking the pill. 15 Based on
such promising market research data, Janssen Korea believed Priligy would not only
satisfy the unmet needs of PE patients who were uncomfortable with existing solutions,
but also attract a great number of non-patients as a lifestyle drug a la Viagra.16
Janssen Korea then concentrated on creating buzz about Priligy. First, they
opened websites and held seminars and forums to facilitate information-sharing and
develop positive opinion about Priligy within the healthcare industry. Second, the
company particularly sought hard to gain support from the opinion leaders –
professors with high reputation. By helping them post favorable opinions about Priligy
through articles, blogs and advertorials, Janssen Korea tried to build credibility. Third,
Janssen Korea actively marketed hospitals to have them consider Priligy as the
primary treatment for PE. Finally, the company strived to create consumer pull
through various PR programs and word-of-mouth marketing.17
After much research and effort, Priligy was finally launched in Korea in October
2009. Janssen Korea was confident that Priligy would be a game-changer and success.
4. Results of Priligy after 10 Months from its Market Launch
Validating such confidence, 250,000 tablets of Priligy was sold in the first three
months of launch, earning approximately $4 million.18 Given Viagra had $10 million
15
http://www.dailymedi.com/news/opdb/index.php?cmd=view&dbt=article&code=122667&cate=class5
http://blog.daum.net/jhs9016/15861764
17
http://www.vitaminmd.co.kr/news/view.md?newsid=002Nq
16
18
http://www.ilyoseoul.co.kr/show.php?idx=88219&table=news_economy&table_name=news_economy&news_sec=003
7
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
revenue in its first year launch in Korea, Priligy initial performance was promising and
Janssen Korea was optimistic that Priligy would eventually top Viagra’s global sales
record of 30 million tablets over the past 10 years.
However, Janssen Korea announced disappointing results for Priligy in May
2010. The sales for the first quarter of 2010 dropped to 90,000 tablets or by 64%,
which accounted for only $1.1 million.19 Making the matter worse, another prominent
Korean pharmaceutical company announced that it has developed a similar drug and
filed for Korea Food and Drug Administration’s (KFDA) approval in October 2010.20
Given the limited time frame for the first-mover advantage and patent protection, such
drastic drop in sales performance was indeed disturbing.
While there are different opinions as to why sales of Priligy fizzled, the media
generally attributes to the following three as the key reasons for the limited success;
high price, the temporary effect of the drug and the lack of consistent and effective
marketing. Touted as the next Viagra, Janssen Korea set the market price similar to
that of Viagra, around $13~15 per one tablet (30mg) and bundled three tablets per
package. Given Priligy only has temporary effect and PE symptoms need continuous
treatment, some analysts believe patients would have found the additional $45~140
expenditure per month to be unaffordable. Another important factor that experts point
out is Janssen Korea had no prior experience in marketing a urology medicine and the
lack of a strong sales force with an established network with the urologists hurt the
sales.21 An urologist said on condition of anonymity, “The patient’s interest in Priligy
has drop significantly compared to its initial release…the positioning of the product
and consistent marketing are very important because diseases are not cured instantly,
but it seems Janssen Korea focused too much on the short-term.” 22 Furthermore,
though the company could create a lot of pull from the end users by utilizing press
release and word-of-mouth, they failed to sustain such momentum to create enough
push through the distribution channel, the doctors and practitioners.
While the aforementioned reasons indeed contributed to the underperformance,
they alone cannot explain why Priligy has not been able to garner market attraction.
19
http://www.dailymedi.com/news/opdb/index.php?cmd=view&dbt=article&code=122667&cate=class5
http://www.edaily.co.kr/news/NewsRead.edy?newsid=01505526592965640&DCD=A03101
21
http://www.mdtoday.co.kr/mdtoday/index.html?no=127323
20
22
http://www.ilyoseoul.co.kr/show.php?idx=88219&table=news_economy&table_name=news_economy&news_sec=003
8
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
The price of Priligy in Korea may not be something to sneeze at, but it is only half of
the price set in Europe. 23 More importantly, it is widely-accepted that people are
willing to spend extra money and are insensitive to price when it comes to well-being
and improving the quality of their sexual life. This is further evidenced by the
continued success of Viagra despite the same inherent problems such as high cost
and the temporary effect. Blaming on poor marketing is easy, but it must be noted
that Janssen Korea had benchmarked Viagra and took very similar approaches.
5. Analysis of PE Market Ecosystem in Korea
Ecosystem Analysis
As seen in figure 1, the ecosystem for Priligy basically consists of four major
stakeholders; manufacturer (Janssen), hospitals, pharmacy, and patients. When
manufacturers launch and produce the product, hospitals will use the medical
product for prescriptions. Once the patients are prescribed with medications, they go
to the pharmacy to purchase the product. This basic ecosystem is described in figure
1 with white boxes.
Figure 1: Ecosystem for PE
Governme
nt
Manufact
urer
Sales
Force
23
Media
Hospitals
Primary
Care
Urologist
Type 1
Pharmacy
Organizati
on
http://www.mdtoday.co.kr/mdtoday/index.html?no=122860
9
Patients
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
However, there are five additional stakeholders on top of the conventional
stakeholders that make the ecosystem a little more complex. Sales forces are the ones
who directly contact the customers and hospitals while the government monitors the
relationship between manufacturers, sales and hospitals so that medicines such as
Priligy are not advertised or promoted directly for the sake of sales. Primary care
urologists are defined as doctors who perform PE-related operations and they affect
the value chain from hospitals to pharmacy as fewer patients would go to the
pharmacy should more patients are operated by them. Currently, 15% of the total PE
patients are treated by primary care urologist through operations while the rest
depend on non-surgical treatments and visit pharmacy. While these doctors affect the
value chain to the pharmacy, there are two other stakeholders that affect the value
chain toward patients; the media and organization. These two stakeholders actively
generate public opinions and work as a liaison between medical party, including
hospitals, pharmacy and end-users.
A more detailed definition and description on the incentives or willingness to
adopt Priligy by key stakeholders in this ecosystem are described as below:
1. Manufacturer
Acquiring the patents and future royalties of Dapoxetine from Eli Lily in 2003,
Janssen had a clear goal and strategy regarding Priligy. Given the high expectations of
the market, there were high stakes within the company as well. Therefore, Janssen
targeted an aggressive timeline for the product launch which made the rapid delivery
of medical information to physicians and patients even more critical. The primary
objective was to educate PE to the general public as a treatable medical symptom and
not a social stigma, hence encompassing more prospective or unknown patients at a
faster pace. To make such happen, the company would have to facilitate patients to
ask for the treatment more and build a strong association between PE and Priligy in
the perception of potential customers.
2. Sales Forces
Janssen has its own internal sales forces that reach out to the doctors directly
and make contracts. They deal with various kinds of products simultaneously and the
10
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
role was not specified by the medical field. They were geographically dispersed and
each local sales force had much autonomy on which medical products to focus on for
its local targets, including doctors at primary hospitals and general hospitals. Since
the company as a whole considered this project to be very critical, there was enough
motivation for the sales forces to focus on this product. Moreover, as the survey
conducted prior to the launch indicated prospective consumer’s willingness to buy was
high and thus insensitive to the price, the sales forces had good reasons to set the
price high, leaving much room for sales margin. However, since Janssen had never
manufactured or sold any urologic medicine, the sales forces did not have any existing
connection to the Korean urology network. Thus, they had to start building the
network from the scratch and the sales strategy was to be set along with marketing
strategy that focused on increasing the awareness of PE as a curable medical
symptom through a wide array of public communication channels.
3. Doctors/hospitals
There are four different types of doctors who treat PE; urologist, Internist,
general physician, and others as seen in figure 2.
Figure 2: Sales force deployment in doctors by type (Source: Janssen Internal research)
Urologists are divided into type 1 and type 2 in which the former are those who
perform PE-related operations while the latter are doctors who only give primary
medical services, including consultancy or prescription. Others include psychiatrists
11
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
since some PE patients suffer the symptom from mental issues and require
prescription of anti-depressant.
Benchmarking the erectile dysfunction market, each type of doctors who treats
PE can be categorized into three different clinical channels; primary care, hospital and
general hospital.
Figure 3: Market share for erectile dysfunction by clinical channel (Source: Ubist
Pharmaceuticals Report)
1) Hospitals/General hospitals
The hospitals and general hospitals together would constitute 25% of the total
PE patient market and the doctors in general hospital, for most of the cases, depend
on cognitive-behavioral therapy since surgical method is not officially authorized and
there are not many alternative choices for officially-approved treatments. Those
therapies, including start-stop technique that helps the patients gain more control of
ejaculation, however, have a certain limit in effectiveness and there is a high risk of
patients turning into a self-medication. With that said, doctors in hospitals and
general hospitals are expected to see high incentives as Priligy would provide doctors
12
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
with more – and possibly better – options for patients, which in turn will decrease the
ratio of diagnose failure, the number of patients turning away and the risk of selfmedication. As the doctors have more options, hospitals and general hospitals would
also enjoy an increase in number of patients visiting for prescriptions and thus, gain
additional revenue from prescription fees.
2) Primary care urologist type 1
Primary care urologists would be the single largest source (30% of total PE
patients) of early treatment of Priligy and half of those primary care urologists are type
1 who performs PE-related operations. This group actively advertises both online and
offline about their PE-related operations which is one of their main revenue sources
and cover 10,000+ patients who want operations per year. Given the number of PE
patients is expected to grow by as much as 30%, primary care urologist type 1 would
also enjoy additional revenue from prescription fees.
Figure 4: PE potential in a urology clinic (Source: Janssen Internal research)
The advantage that primary care urologist type 1 would enjoy
from
implementing Priligy looks feasible at the first glance, but their likelihood of resisting
the adoption of Priligy is quite substantial as well for two reasons. First, though the
total market size of PE-related prescription would increase, urologists would share a
smaller portion of patients coming for prescription since patients would be able to
receive prescription from general physicians or other doctors, to whom they can reach
out more easily for various reasons, including cultural or geographical reasons. For
example, the number of general physicians over the country is six times as big as that
of urologists – 7,200 versus 1,144 (see figure 2) – and thus, general physicians have a
higher advantage over urologists in terms of proximity. People in Korea also prefer
13
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
seeing general physicians to urologists for privacy issue. Overall, once patients are
prescribed from urologists and understand the reason of their symptoms or if Priligy
works for them, they would most likely go see other doctors, including general
physicians or internists for the next prescriptions. In fact, 20% of PE patients are
currently treated by general physicians, the second biggest type of doctor in this
ecosystem.
Overall, primary care urologist type 1 would be reluctant to embrace Priligy
because it would increase the prescription market, but leave the portion for urologists
small as other type of doctors with better proximity and attachment to the patients
would take most of the market. They are also the group who enjoys high revenue from
PE-related operations and would expect Priligy to cannibalize such market.
3) Primary care urologist type 2
Primary care urologist type 2 who do not perform PE-related operations, but
only give consultation or prescriptions, constitutes the other half of the total number
of primary care urologists in Korea. Since they do perform any PE-related surgery,
there is no significant threat brought by Priligy to their conventional clinical or
business model. Since the total market for PE-related prescription would increase,
there is a slight incentive for primary care urologist type 2.
4) Others (Primary care general physicians, internist, psychiatrists, and so on)
As mentioned above at the “2) Primary care urologist type 1” section, others in
primary care channel would enjoy most of the incremental pie. The motivation is
based on the advantage that the others group have in terms of geographical proximity
and strong unfavorable sentiments against seeing urologist for privacy issue. Therefore,
the niche advantage in which Priligy can be prescribed by anybody in the clinical
channel will be more useful to other primary care doctors, who as a whole constitute
36% of the total market.
4. Pharmacy
Once the government designates a medical product as a subject that needs
prescriptions, pharmacy takes one of the most important roles in the ecosystem as it
14
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
becomes the only retail channel that can reach out to the patients or partners for
purchase. In the same sense, once a doctor prescribes Priligy to a patient, he or she
would go to the pharmacy to purchase Priligy. Pharmacy is a very critical stakeholder
in the Priligy ecosystem given it is an important communication channel. Information
and consultation on PE treatment is possible via the 20,000+ pharmacies scattered
throughout the country and would affect the whole ecosystem significantly as people
would visit the pharmacies in their proximity most often seeking for information.
Since Priligy is not covered by insurance, Janssen had complete autonomy on
setting the price and the company set the price high enough to have room for
sufficient margin. Therefore, pharmacy would have strong interests in adding the new
product to their shelves. Inventory turnover ratio would also be healthy since the
market for PE prescription is expected to grow by as much as 30% and any doctor can
prescribe to the patients, increasing the chance of PE patients consistently visiting the
pharmacies.
5. Government
The government’s role regarding Priligy is limited to simply monitoring the
improper usage of the product and any direct promotion or advertisement of Priligy.
Though government could welcome the appearance of Priligy for the greater cause of
“making a better world,” the overall incentive of the government remains at small.
6. Organization
There are two main organizations that are directly related to PE and Priligy; The
Korean Urological Association and Korean Society for Sexual Medicine and Andrology.
The former boasts a long history of over 55 years pioneering the field of Korean urology
and making a relationship with other international organizations, while the latter has
broadened the study to andrology and engaged actively in related thesis publication.
These organizations set the standard for PE treatment methodology and have
significant influence on media, especially the media focused on science and health.
They consist of active doctors and PhDs, where most of the doctors are primary care
urologist type 1. The organizations themselves may not have much incentive from the
launch of Priligy other than the fact that the product is an issue-maker and can
15
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
provide additional research opportunities. However, given most of the members of the
organizations are composed of primary care urologist type 1 who is hesitant to adopt
the product, their overall willingness toward Priligy is believed to be small at best.
7. Patients/partners
Reportedly, 5 million of 27% of Korean men are considered to be prospective PE
patients and their partners serve as important influencers for demanding a treatment.
Moreover, as seen in figure 5, patients and partners are not only the end-users, but
also those who can influence or drive the ecosystem in a more active way as they can
ask for Priligy to the doctors.
Figure 5: Flow of PE patients (Source: Janssen Internal Research)
Distress /
Dissatisfaction
Origination
(Awareness)
Male
Partner
Aware of PE/DPX
Information
Gathering
Information search
Go to Doctor
Presentation
GP
Urologists
Failure to diagnose
away
Diagnosis
Risk of self
medication
Diagnosed
PE Only
Evaluation
PE w/ED
Not Referred / Self
managed
Treatment
Choice
Behavioral
SSRI
Other Rx.
Stop
16
Referral
PDE5I
No adherence
due to price
Prescription
Compliance
Treatment
satisfaction
Other
Psychiatrists
Back to
doctor
Loss to
referral
Priligy
No adherence
dissatisfactio
n
Different
doctor
Adherence
Continue on
DPX
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
When a patient or partner feels that he has premature ejaculations, he or she
would either search for more information or goes to a doctor for consultation or
prescription. After diagnosis, primary care urologist type 1 would suggest either
operation or other alternative ways while the other type of doctors would prescribe
options other than operations. In this step, the patient’s or partner’s awareness on
Priligy would affect the doctor’s decisions as the product has relatively low risk of sideeffect compared to other options that can be given by doctors. Moreover, various kinds
sources suggest that the market reaction and purchase intention are very high which
implies there is a high incentive that patients or partners feel about Priligy.
In conclusion, patients or partners are willing to see Priligy and take the
advantage that the product offers and thus, would likely to adopt the product. They
would not only influence the ecosystem just as an end-user, but also might hold
stronger hegemony and influence the system in a very active way.
Core Issue Analysis of PE Market
PE Market Size before Launching Priligy
Before Priligy, most of initial prescription for PE has been written by urologists
of primary care while half of the urologists are performing dorsal nerve neurectomy.
Annually about 10,000 patients are operated on dorsal nerve neurectomy and the
operation cost is from $3,000 to $5,000. Currently, the number of urologists who are
performing the operation in South Korea is 600. Based on such information, the
revenue from PE operation and its market size can be estimated as below:
-
Revenue from PE operation per one urologist = 10,000(number of PE patients
who have operations) × $4,000(PE operation cost) ÷ 600(number of urologists
who perform operation) = $66,666
-
Total market size of PE operation = 10,000(number of PE patients who have
operations) × $4,000(PE operation cost) = $40M
PE Market Size after Launching Priligy
If Priligy successfully prevails and is adopted by 30% of the total PE patients,
the number of patients who go to hospital to treat PE is 1.5million, 150 times of before.
17
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
The patients generally will take four tablets per month and go to hospital or clinic for
prescription at least six times a year. However, if the doctors treat PE patients and
provide prescription without operation, the doctors can only earn revenue from the
prescription fee or $10 per visit of a patient. Furthermore, after the initial prescription
for Priligy is done by an urologist, many patients may go to other hospitals and general
physicians or internists, meaning urologists can no longer dominate the PE market
any more. In the case of erectile dysfunction (ED) market, it has been reported that
only 30% of ED patients visit urologist after oral ED drugs such as Viagra and Cialis
were adopted by more than 30% of the ED patients.24
Primary Care
Urology
30%
IM
15%
GP
20%
Others
11%
Hospital
General
Hospital
Hospital
5%
Urology
9%
IM
5%
Others
5%
The revenue and market size of Priligy can thus be calculated as below:
-
Revenue from Priligy per one doctor including urologist, internist, general
physician = 1,500,000 (number of PE patients who take Priligy) × $10
(Prescription fee) × 6 (number of visits) × 30% (percentage of PE patients who go
to urologists of primary care for prescription) ÷ 1,144 (number of urologists) =
$23,601
-
Total market size of Priligy prescription = 1,500,000 (number of PE patients
who take Priligy) × $10 (Prescription fee) × 6 (number of visits) = $90M
Comparison of PE Market Size to Urologists and Other Doctors/Hospitals
Therefore, even though the total market size of prescription fee ($90M) for
Priligy will be more than double of PE operation ($40M), the revenue per urologist who
performs dorsal nerve neurectomy will actually reduce by a third. Instead, urologists
who do not perform operations, hospitals, general physicians and internists can gain
additional revenue from Priligy prescription fee. In particular, other doctors of primary
24
Source: Ubist Pharmaceuticals Report
18
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
care only have limited medical treatment such as behavior and SSRI which are not
officially approved as PE medication. Hence, Priligy can be a good opportunity to
expand their influence and gain more revenue with an officially approved medication.
In case of the hospitals, they did not have viable medical treatment except for
behavioral therapy before Priligy because they take the academic circumstance
regarding reputation in consideration.25
-
Total market size for other doctors of primary care = $90M × 46% (percentage of
PE patients who go to other doctors for prescription) = $41.4M
-
Total market size for hospital = $90M × 24% (percentage of PE patients who go
to hospital for prescription) = $21.6M
As discussed earlier, most of the PE patients first go to urologists rather than
general physicians or internists because patients want to receive a more professional
consultation or medical treatment. However, after patients receive treatment with
prescription, they are not willing to revisit urologists because of psychological issues.
Thus, the urologist cannot exercise their influence over PE patients as before, the
main reason to why urologists are concerned about Priligy.
Comparison of PE Market Size to Other Stakeholders
As for the other stakeholders, overall benefit is relatively high. It is without a
doubt that Janssen, the manufacturer of Priligy is one of the biggest beneficiaries. If
the drug is widely accepted, it is believed that Priligy can generate huge revenue.
-
Expected revenue of Janssen for Priligy = 1,500,000 (number of PE patients
who take Priligy) × 4 (tablets per a month) × 12 (month) × $10 (price per one
tablet = $720M
New drugs that attract more customers to drug stores are always welcomed
from the pharmacy perspective despite possible supply chain and inventory issues.
Even though government and urology-related organizations cannot gain high level of
benefits, they can still increase their influence to control PE market. For example, they
can introduce new standards and guidelines or set new rules to control the
manufacturers or doctors.
25
IMS data from http://www.imshealth.com/portal/site/imshealth
19
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
Adoption Value Analysis of Stakeholders
Priligy, the world’s first oral medication for premature ejaculation is an
innovation that can bring huge benefit. As calculated before, the potential additional
annual benefit that Priligy brings to the whole ecosystem is at least $50M excluding
Janssen’s share, which is one of reasons Janssen expected great success.
However, due to one key stakeholder, urologists who perform PE-related operations
and are hesitant to adopt Priligy, Janssen has not achieved the kind of success that
they initially envisioned and the revenue actually fell down by 63% during the 10
months after the launch for the following reasons.
-
Diffusion of innovation within an ecosystem is converged to the minimum
adoption value of a stakeholder. Hence, the adoption of an innovation is likely
to fail even if there is just one unfavorable stakeholder whose adoption value is
a negative. The adoption value of urologists who perform operations is negative,
because they potentially lose the high revenue that they get from dorsal nerve
neurectomy. Therefore, even though the overall adoption value is high, Janssen
has had difficulty entering the PE market.
20
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
-
The influential power of urologists who perform dorsal nerve neurectomy is
relatively higher than other stakeholders.
o
First, since they have treated and positioned themselves as experts of PE,
they have provided a lot of professional advice and led public opinion
about premature ejaculation therapy.
o
Second, they are the founding members of the major PE-related
organization, Korean Society for Sexual Medicine and Andrology.
Through the organization, they can establish standards to control the PE
market and execute lobbying activities to the government authorities.
o
Third, given they have spent lots of advertisement expenditure, urologists
who perform PE-related operations have a great deal of influence on
media such as newspapers and online portal sites. In addition, they have
tight connections with the medical professional journalists, which has
been one of the reasons as to why there have been many unfavorable
articles about Priligy.
Pharmaceutical companies are not allowed to provide incentives or rebates to
doctors or hospital. Hence, it is not easy to cover the negative adoption value through
direct support to urologists. Moreover, most of the advertisements or promotion
activities are forbidden by law. Consequently, without the urologists and PE-related
organizations, it is very difficult to create a public opinion favorable to Priligy.
6. Our Recommendations
Shaping PE as a treatable medical symptom and not a social stigma, facilitating
PE patients to present themselves to physicians for treatment and making strong
associations between PE and Priligy in patient’s perception are necessary to
successfully diffuse Priligy into the PE market.
To make the ecosystem run smoothly, Janssen has two possible options. First,
it can improve the adoption value of urologists who perform operations from negative
to positive. Second, by taking the bold move and skipping over the urologists, the
21
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
company can rather focus on creating a patient-driven market through various
marketing activities and PR program.
Turn around adoption value of the urologist after launching Priligy
Operation Excellence
Janssen should support the urologists to achieve operational excellence to
efficiently treat patients with Priligy. Dorsal nerve neurectomy was beneficiary to the
urologists not only for its high margin, but also relatively simple process and short
operation time. Therefore, Janssen should help urologists innovate their whole
management
process
via
web-based
appointment
system
and
outsourcing.
Furthermore, Janssen can implement PE assessment procedures to help nurse
practitioners differentiate PE patients.
Prevalence of PE Diagnosis
To increase the number of patients who voluntarily visit hospitals to treat their
PE symptoms, Janssen can execute self-assessment programs for patients. In addition,
to eliminate the psychological huddle of potential patients visiting urologists, Janssen
can run the ‘My Friends story’ campaign for partners as well as PE patients.
Create another revenue sources through Priligy
Janssen can promote heath examinations, including PE diagnosis such as ‘PE
and health’ programs. Urologists can also develop and introduce medical packages
that achieve higher level of synergy between Priligy and other treatments or operations.
Skip over Urologists and Focus on Patient-Driven Market
Active Public Communications
Janssen should try to have a more targeted marketing for its main target, males
between 20 and 40 years old to increase the awareness of PE through various media
channels including TV, Cable TV, newspaper, periodicals and medical journals.
Janssen can also use new online marketing channels such as power bloggers, viral
marketing, and buzzcating. Furthermore, public campaigns and educational activities
should be aligned with marketing and medical programs as well.
22
The Challenge of Innovation Adoption for Priligy in Korea
Angie Sewon Cho, Jeong-Suh Choi, Arunprasad Durairaj, Jong Yoon (Jeff) Kim, Young Joon Suh
Direct Communication to Patients
Janssen can actively exercise survey on self-reported PE prevalence and
willingness to take oral medication. Information on PE treatment can be provided
directly to patients via retail pharmacies with mini banner stands or referrals. Call
center can be another great alternative channel to provide drug information service or
authenticity verification directly to patients.
Gain similar perception as Viagra for effective awareness increase of Priligy
Actively promoting Priligy’s advantages as with Viagra can be helpful for
patients to easily recognize Priligy as officially authorized and reliable. As the world’s
first oral medication, such approach is necessary to continue to keep its leader image
and maintain the first mover advantage.
23