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Growth Market

Published Sep. 13, 2005

Every time he scores some TV time, Karl Malone's once bald head is a moving billboard for Rogaine Extra Strength. The pro basketball star is Rogaine's spring replacement for Green Bay Packers boss Mike Holmgren, who marketers hope will return to the gridiron this fall with his shaggy locks intact. At least that's the plan until one of the other sports figures secretly rubbing Rogaine onto his bald pate gets some results and an endorsement deal.

It's all part of a new hair-raising marketing battle to win the hearts, minds and money of millions of Americans dealing with hair loss. The majority of the 40-million American men afflicted with receding hair lines, friar's peaks and just plain baldness are content to accept their genetic fate. But market research found about 7-million of them are willing to spend money to do something about it. Federal regulators opened the floodgates in November by approving two new new medications touted to not only stop hair loss but regrow hair.

It won't be an easy sale, say the two companies that are each pouring $80-million into ad campaigns promoting new hair-growth treatments.

Countless baldness cures have been marketed for decades to an audience soured long ago by snake oil salespeople. Asked for loopy baldness cures they've heard of over the years, dermatologists came up with massaging chili peppers into a bald scalp, applying water poured through a boiled shoe heel or doing situps upside down, according to one survey.

If that's not enough to confound a marketer, health insurance won't pay for either of these pricey new drugs that cost up to $600 for a one-year tryout. They work for many people, but not all. The first signs of any results take months longer than the instant fix today's customers expect. And the potential side effects are a marketer's nightmare.

In one corner is Pharmacia & Upjohn, the U.S.-Swedish company that makes Rogaine, an over-the-counter product that's been on the market since 1988. Cheaper generic equivalents with the same active ingredient Minoxidil steadily eroded Rogaine's sales from $162-million in 1996 to $84-million in 1997. So the company more than doubled the strength to 5 percent Minoxidil and has three years of exclusivity before the patent runs out. It claims Extra Strength Rogaine grows 45 percent more hair than the former 2 percent Minoxidil formula.

In the other corner is Merck & Co., the Whitehouse Station, N.J., pharmaceutical giant that poured $450-million into developing Propecia, a brand name fashioned from alopecia, the medical term for baldness. Propecia's active ingredient is finasteride, a stronger dose of which is in Proscar, another Merck testosterone-altering drug that has been used in prostate therapy for years. Already some doctors have been prescribing for baldness patients Proscar, which is reimbursable by insurance and costs a fraction as much per milligram as finasteride. Patients are told to cut the tiny Proscar pill into five parts, a proposition that neither health regulators nor Merck endorses.

Both hair-loss products are aimed at the same people, but come loaded with marketing challenges. Propecia is a once-a-day pill; Rogaine is a lotion that must be rubbed in twice a day. Propecia requires a prescription, Rogaine does not. Propecia costs about $50 a month to use, Rogaine Extra Strength about $30.

So far Rogaine, which has been heavily promoted by Holmgren and Malone since January, has been winning the battle. But it's still early in the game.

"Our Rogaine sales increase every time they run those ads," said Lorraine Coyle, vice president of health and beauty aids for Eckerd Drug Stores. "It's absolutely in our top 10 health and beauty products. It's a product people really want to work for them."

Propecia, meanwhile, reported a disappointing $13-million in sales during its first quarter on the market. It is a sales figure that Merck hopes will soar, however, after its first broad consumer promotion began last week.

This summer, ads for both products will become familiar sights on prime time TV, sporting events and in print media that target a male audience.

While Rogaine sticks with testimonials, Merck is using no visual except a close-up of a Propecia pill.

"The pill is a strong way of communicating the science behind Propecia and the clinical data that supports it," said Tom Casola, executive vice president of dermatology for Merck.

Two statistics highlighted in the ads are tests in which researchers actually counted hairs on 3,758 male heads with moderate male pattern baldness. After using Propecia for two years, 83 percent had no hair loss. In addition, 66 percent had a visible regrowth of hair.

"And it was not peach fuzz," Casola said.

As a prescription drug, however, Merck must outline potential side effects. The disclaimers consume almost half of its 45-second TV spots. Some of the potential side effects include a loss of sexual drive, inability to achieve an erection and a decrease in semen. Those are hardly comforting words to someone already sensitive about baldness. So Merck adds that side effects only occurred in 2 percent of the test group and are reversible once a customer stops using the drug. Merck also promotes in its TV ads, a Web site and toll-free telephone line for those wanting to read complete test results or receive more information.

Rogaine prefers testimonials to the clinical test approach because of the rampant skepticism about any medical claim.

"We like sports figures like Karl (Malone) because he's a real person. He's likable. You can see the hair he grew with Rogaine in the middle of a real game," said Bob Wilock, senior group vice president of Jordan, McGrath, Case and Taylor, the New York ad agency that produced the commercials. "There is a lot of (negative) word of mouth about Rogaine caused by people who have had mixed results with the product in the past."

Rogaine approached several pro athletes about endorsements. Michael Jordan, whose shaved head has become part of his identity, said no thanks. Rogaine signed up others who are secretly using the product. If it does not work, that's the end of it. If it does, they start negotiating.

"The shaved head look is going to go out of style among professional athletes," said Bill Lusby, assistant brand manager of Rogaine. "As Karl Malone says "You know who you are.'


Once it gets going, hair only grows half an inch a month. Both products take from two months to a year to show results, so getting converts to stick with the program is a problem. That's why Rogaine offers $10 rebates for second purchases and Propecia is sold at a discount for a three-month supply.

There is another big selling point for sticking with either product: Quit and you lose not only all the hair you grew, but all the hair you would have lost while you were using it.