Novartis ($NVS) CEO Joe Jimenez is putting his faith in advertising. As part of a plan for turning around its Alcon unit, the Swiss drugmaker is mounting an aggressive consumer marketing push for its struggling contact lens business.
"We're going to increase direct-to-consumer advertising on the contact lens business, particularly Dailies Total 1, which we have seen is incredibly responsive to advertising," Jimenez says.
Novartis will also hike spending on physician marketing, putting new money behind launches such as its preloaded intraocular lens UltraSert and multifocal lens PanOptix. "We're going to increase sales and marketing support up against these two," Jimenez pledged.
Alcon's most recent national TV ad push came last August and September for its Dailies Total 1. That ad featured an Alcon scientist who helped develop the product.
The contact lens industry in the U.S. is consolidated, but highly competitive. Johnson & Johnson's ($JNJ) Vision Care, Valeant's ($VRX) Bausch & Lomb and CooperVision, along with Alcon, accounted for 99% of total contact lenses value sales in the U.S. in 2014, according to market researcher Euromonitor International. IBISWorld pegs the total U.S. contact lens market at $4 billion in revenue.
The marketing budget boost, part of $200 million in new spending that Jimenez plans for the Alcon turnaround, comes along with several major adjustments. Alcon's prescription eye care products will move into Novartis' pharma division, and the eye business will step up education and training for physicians and surgeons around its cataract products.
Jimenez's newly revealed plan put to rest, at least for now, rumors that parts of the Alcon business would be spun off. He emphasized in the earnings call that the Alcon brand name, from both a products and sales reps standpoint, would continue, saying, "the Alcon name is a tremendous asset."
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