The Johnson & Johnson/American Home Products row over the safety of competing painkillers (Marketletter March 18) compares to "elephants killing each other," says Arvind Desai of mehta & Isaly. In recent months, AHP's media ads have said J&J's Tylenol (acetaminophen) can damage the liver of moderate drinkers, and J&J said AHP's Advil (ibuprofen) can be dangerous when mixed with blood pressure drugs or taken by people with gastrointestinal problems. The advertising has reached a new low, says Robert Uhl of Salomon Bros.
However, reports the New York Times, the effect on investors' wallets is likely to be muffled. The ad battle has not hurt either firm's stock price and it probably won't, says Hemant Shah of HKS & Co, adding: "It's a non-event as far as investments go." Tylenol products represented under 5% of J&J's 1995 sales of $18.8 billion and an even smaller share of profits, says Dr Desai, while Advil produced about 4% of AHP's $13.4 billion sales and 4% of earnings, noted Mr Uhl.
But negative advertising takes away from companies' ad spending; in 1995, drug firms spent $511.8 million on advertising painkillers, sedatives and sleeping pills in the USA, says Comparative Media Reporting of New York. And some analysts feel the negative ads could undermine consumer confidence in all over-the-counter painkillers. US sales of analgesics were $2.3-$3.3 billion in the last year, notes the NYT; Neilsen puts Tylenol as market leader (although losing market share), followed by Advil and Procter & Gamble's Aleve (naproxen sodium).
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