Healthy Skepticism Library item: 15447

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Winstein KJ, Vranica S.
Drug Firms' Spending on Consumer Ads Fell 8% in '08, a Rare Marketing Pullback
The Wall Street Journal 2009 Apr 16
http://online.wsj.com/article_email/SB123983651029422787-lMyQjAxMDI5MzE5NjgxMzY2Wj.html

Full text:

Drug makers cut their spending on consumer advertising of prescription drugs by 8% in 2008 to $4.4 billion, the first pullback since at least the late 1990s in their efforts to get patients to request a particular medicine.

Such ads have surged since 1997, when the Food and Drug Administration relaxed restrictions on drug advertising to consumers. U.S. spending on such drug ads hit a peak of $4.8 billion in 2007, according to market researcher IMS Health, up from less than $1 billion in 1997.

Pharmaceutical-ad experts blame last year’s spendng decline on fewer new-drug introductions and heightened congressional scrutiny of drug marketing.

Critics say the ads, which are permitted in few other countries, inflate health-care costs by prompting patients to request brand-name medicines, rather than cheaper generic alternatives. The industry’s trade group, however, cites a 2003 statement from the Federal Trade Commission that argues that the ads educate consumers about drug options and haven’t been shown to lead to higher prices.

In the U.S., ads aimed at consumers typically account for only about 40% of the total marketing budget for prescription drugs, according to the pharmaceutical industry. The majority of manufacturers’ promotional efforts are directed at doctors.

The slowdown on the consumer-ad front has already hurt some advertising agencies, including Publicis Groupe SA and Omnicom Group Inc. “Health care continued to slow in the quarter due to a lower number of new-product releases and cuts in spending from the large pharma companies,” said Randall Weisenburger, Omnicom’s chief financial officer, during a conference call with analysts in February.

Merck & Co. and Schering-Plough Corp., which jointly market the top-selling cholesterol drug Vytorin, sharply cut spending on consumer ads last year to $47 million from $114 million, IMS said. The decline came after two Michigan congressmen, Reps. John Dingell and Bart Stupak, criticized the companies for advertising the drug while allegedly delaying the release of a medical study that found Vytorin was no more effective in some patients than a cheaper alternative.

Competitrack
Drug ads for consumers have surged since 1997, when the FDA relaxed restrictions on such ads. U.S. spending on such drug ads hit a peak of $4.8 billion in 2007, according to market researcher IMS Health, up from less than $1 billion in 1997. Above, a scene from a TV commercial for Pfizer’ s Lipitor, featuring artificial heart inventor Robert Jarvik.
Merck said the companies halted consumer TV ads for Vytorin in January 2008. “We felt this temporary suspension was appropriate in light of the news coverage” surrounding the release of the unfavorable medical study, a spokesman said.

TV commercials featuring Abraham Lincoln as a pitchman for Takeda Pharmaceutical Co.‘s Rozerem, a sleeping pill, appeared much less frequently last year, as the company slashed spending on Rozerem advertising 90% from a year earlier to $14 million. But spending for Pfizer Inc.‘s erectile-dysfunction drug Viagra nearly doubled to $121 million from $63 million.

Pfizer spokeswoman Sally Beatty said patients “benefit from our advertising,” which raises awareness of health conditions. “Erectile dysfunction, for example, can be a signal for other serious medical issues, including high blood pressure, diabetes and cardiovascular disease.”

Overall, print advertising for drugs fell 18%, and TV advertising shrank 4%, IMS said. Those declines were larger than the overall decline in ad spending last year, which Nielsen Co. put at $137 billion, down 2.6%. Drug advertising also fell faster than overall pharmaceutical marketing, IMS said.

IMS, which consults for drug companies and investors, said it thinks companies cut back too far on print and some TV advertising. “They should optimally be pushing back up again,” said John Busbice, an IMS researcher.

Over the past few years, drug advertising has been a huge growth area for advertising and media companies. Pharmaceuticals had become one of the largest ad-spending categories, ahead of such sectors as the insurance industry, beverage companies and film studios.