An over-the-counter erectile-dysfunction solution? While it sounds like a setup for several possible punchlines, to Viagra maker Pfizer (PFE), it’s no laughing matter.

Last week, Eli Lilly (LLY) and Sanofi (SNY) floated the possibility of the duo launching an OTC erection aid once the erectile dysfunction drug Cialis — currently owned by Lilly — loses much of its U.S. patent protection in 2017.

While it’s nowhere near being a done deal at this point, the marketability of an over-the-counter version of Cialis is clear. Not only would the OTC erectile-dysfunction drug presumably cost considerably less than its prescription-based counterpart, but it would sidestep a potentially awkward conversation between a man and his doctor … by replacing it with the awkward silence between a man and a cashier.

For investors, though, it all begs one question: What kind of revenue opportunity would an over-the-counter ED treatment mean for Sanofi and Eli Lilly?

Viagra and Cialis Are Blockbusters, For Now

Erectile-dysfunction is a big business. In 2013, category-leading Cialis generated $2.2 billion in global sales, while Viagra generated approximately $1.9 billion in revenue for Pfizer.

All told, the world bought $4.3 billion worth of ED drugs in 2012.

Problem: Once drugs lose patent protection, annual sales of that drug typically plunge 90% as generics chip away at revenue, and both Cialis as well as Viagra are on the verge of falling off the patent cliff. In fact, Viagra already lost patent protection in Europe last year and will lose most of its U.S. patent protection in 2019. Meanwhile, Cialis will lose the bulk of its U.S. and European patent protection in 2017.

The usual course of action to milk the last shred of value from a drug that’s lost patent protection is to lower its price and/or produce an OTC version of it, as Eli Lilly and Sanofi are considering for Cialis.

It’s too soon to assume the best for Lilly, though, or assume the worst for Pfizer.

Mail Order

While the introduction of an OTC Cialis seems disruptive on the surface, there’s a unique reality within this particular race that could lead to an unexpected outcome.

If there was any category of drugs that could continue to command a premium, ED drugs may well be it.

Most men wouldn’t admit it. Indeed, most men might not even recognize it about themselves. But, the typical male is brand-loyal and resistant to change. In the same vein, the one place even the cheapest of guys is unwilling to feel like he’s skimping is the erectile arena; only an established brand name like Viagra or Cialis is going to be trusted by most when it comes to a man’s most important asset.

Moreover, Pfizer has taken Viagra an unusual step further to secure its foothold in the erectile dysfunction market to stave off newcomers like an OTC Cialis — it’s available by mail.

Much of the Viagra ordered by mail is not only fake, but potentially dangerous. The real Pfizer-made pill is available for delivery via the USPS, however, with a valid prescription. Knowing what we know about the male ego and a man’s resistance to change, this established (legitimate) distribution approach could further keep the OTC version of Cialis from becoming a major threat.

In other words, an over-the-counter erectile dysfunction drug would still have a lot of work to do to make hay in the market.

The Deck Is Stacked Against an OTC Cialis, But…

While the introduction of OTC Cialis still seems like a stroke of genius, investors mulling a position in LLY stock or SNY based on the possibility should know that Pfizer already tried to launch an OTC Viagra in Europe in 2008. The company withdrew the application when it became clear the European Medicines Agency wasn’t keen on the idea.

The worry wasn’t even about the potential risks of the drug like an unsafe drop in blood pressure, but rather, the risks associated with men not seeing a doctor to determine whether they’re healthy enough for sex in the first place.

Regardless, given how the U.S. Food and Drug Administration often sees things the same way the European Medicines Agency does, it’s likely the FDA will balk at the idea of an OTC Cialis.

Still, on the off chance Cialis does became available over the counter in the U.S., one has to believe it could be one of the most successful prescription-to-OTC transitions in the history of pharmaceuticals.

While the typical sales plunge for a drug that has lost its patent protection might be on the order of 90%, the number of users before and after the typical generic-driven price drop is relatively static. If low-cost erectile dysfunction pills suddenly become available without a prescription, though, it’s more than a little conceivable that a large number of would-be users would suddenly become actual users of an ED pill.

Would the uptick in paying customers fully offset the steep decline in per-pill prices? It seems unlikely, but the new demand could be stronger than past prescription-to-OTC transitions have seen.

According to data from the American Heart Association, 30 million American men suffer from ED, and 150 million men worldwide have at least occasional erectile dysfunction. That’s a huge number.

Though not nearly as huge as the 2 billion or so sexually active adult males on the planet who are at least curious about an improved sexual experience.

Dare to dream, though. An OTC Cialis seems unlikely.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.