Betting on the Male Libido: Viagra Price Hikes No Bar to Sales

Last year, Pfizer (PFE) saw sales of Viagra decline for the first time ever, after years of annual price hikes that doubled its cost. It raised an interesting question: Is male desire for sex price-sensitive? Come Q2 2010, however, there's been a return to normalcy: Sales are up again by 16 percent to $491 million, despite further price hikes. (They rose in Q1 also.)

No matter how much the company charges, men -- and their various insurance programs and reimbursers -- want this product. A Milwaukee teachers' union is currently litigating to keep Viagra covered by its taxpayer-funded healthcare program. The battle is making the union look ridiculous, but the union doesn't care: The teachers just want their pills.

It's the same situation over at Eli Lilly (LLY), which markets Cialis. Sales grew 11 percent to $419 million in Q2, based on both increased volume and increased prices, the company reported.

Put this anecdotal evidence together with the "reason" Hewlett-Packard (HPQ) CEO Mark Hurd resigned and you have your business lesson: Only a fool bets against the male libido.

Related:

• Pfizer Preps Viagra 2 for 2011, but What on Earth Is It?
• Pfizer's Viagra Shows Signs of Flagging: Sales Down 6%
• The Price of Lilly's Cialis Has Doubled Since Its Launch
• Price of Viagra Has Risen 108% Since Launch; 100 Pills Now Cost $1,400
• Lilly Q2: It's Downhill From Here, Say Analysts; Cialis Gains on Viagra