Lilly to enter already crowded insomnia market

Mar/07/2007 06:05 Filed in: Pharma Business
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Eli Lilly & Company purchased Hypnion this week in order to get access to their insomnia drug that is currently in development. With the market for insomnia drugs already quite crowded with competitors one has to ask the question "why"? The Hypnion product does have a different mechanism of action but then so did Strattera when it was released and it has failed to live up to sales expectations. In addition any new product entering the insomnia market is going to have to do with a hefty DTC budget and frankly this author thinks that the days of big DTC budgets for Lilly is over.



An insomnia drug would compliment Lilly's portfolio of neuro drugs but with Ambien the clear market leader I just don't see any new product making a substantial gain into this market. Lilly has never been known as a marketing powerhouse and in fact they are more a sales driven than marketing driven company. Lilly has spent more than $300 million in DTC for Cialis yet it's market share here in the US remains below 30%. Could Lilly have reached the conclusion that there are no more blockbusters and it's better to have a broad range of products bringing in $200-$300 million than one product bringing in $1-$2 billion ? Diversification would certainly make sense. Lilly has never quite recovered from the loss of patent to Prozac and Zyprexa's sales may have reached its peak.


So in addition to a crowded markets for treating cholesterol we will soon have a very crowded market for insomnia drugs with a range of products to chose from. Hypnion only employs 25 people and I am sure that this is not a major acquisition for Lilly like the recent purchase of Icos but in order to make this produce even moderately successful Lilly is going to have to hold onto some marketers who have been leaving the company in droves for greener pastures.
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