Healthy Skepticism Library item: 1831

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

Pharma Reformulates Marketing Plans
Eye For Pharma 2005 Jun 19
http://www.eyeforpharma.com/print.asp?news=46904

Abstract:

Pharma to TV: Drop dead. That, in a nutshell, was the message from drug companies last week as Bristol-Myers Squibb said it would cease consumer advertising for all new brands during their first year on the market. Overall, pharmaceutical marketers were wondering whether TV was worth the price for any drug advertising.

Keywords:
Bristol-Meyer Squibb direct-to-consumer marketing direct-to-patient

Notes:

Ralph Faggotter’s Comments: At Healthy Skepticism we were pleased (but a bit suspicious) when Bristol-Meyer Squibb announced that they were not going to advertise new drugs directly to the public for a year or two. It appears from this article that their motives may have been less pure than they wanted us to believe at the time.

Full text:

Pharma Reformulates Marketing Plans
(7/19/2005)

NEW YORK (June 20, 2005) — Pharma to TV: Drop dead. That, in a nutshell, was the message from drug companies last week as Bristol-Myers Squibb said it would cease consumer advertising for all new brands during their first year on the market. Overall, pharmaceutical marketers were wondering whether TV was worth the price for any drug advertising.

The Eye for Pharma Marketing ROI conference in Philadelphia revealed that while BMS may be the first to step out of the closet, most pharma companies are becoming increasingly disenchanted with TV advertising and are moving more dollars into alternatives, particularly the Internet.

Their mantra: Move away from direct-to-consumer marketing and head toward direct-to-patient marketing. DTP focuses more on grabbing the attention of people who are already being treated by doctors, as opposed to DTC’s scatter-shot appeal to the entire population.

BMS’ move should be taken with a grain of salt because while it changes its TV, radio and print strategy it is not, as BMS spokesman Brian Henry said, a 12-month ban on all new-product advertising. “We still plan on communicating with consumers in that time with info about disease awareness and product for physicians” after a product is launched, he said.

BMS spent $35 million of its $61 million ad spend on TV last year, per Nielsen Monitor-Plus. And despite the hand-wringing, first quarter ad spend is down only $27 million for the entire category, to $986 million.

BMS kicked off a week of drama in the category. On June 14, the company agreed to pay $300 million to settle federal “channel stuffing” allegations, and two former BMS execs were indicted for allegedly organizing the effort to inflate sales figures by inducing retailers to take more product than they needed.

The next day, the Food & Drug Administration ordered all pharmaceutical companies to re-label all pain relief products containing ibuprofen and other non-steroidal anti-inflammatories with warnings on stomach bleeding. Brands affected include Advil (Wyeth), Motrin (McNeil) and Midol (Bayer).

“It’s a tumultuous time,” said David Stern, vp-marketing at Serono, Rockland, Mass. “The return on investment for traditional advertising is really waning . . . the Web is where we can get a return on our investment.”

Stern said DTC spending had skyrocketed, but patient demand at the doctor’s office was relatively flat. He suggested one alternative was to custom-build Web sites for individual doctors who could then recommend their patients seek more health information from the site. The pharma marketer would then end up knowing more about the patients’ interests than the doctor would, Stern said — invaluable for sales reps on their next visit with that doctor.

Even dollars staying on TV are likely to shift from the networks to more targeted cable options, said Chung Ma, director of marketing science at Novartis. “We can expect there will be pressure to cut the promotional budget,” he noted. “We’re starting to increase budgets in the e-marketing area.”

Ian Talmage, Bayer Healthcare’s svp-new product global strategic marketing, agreed. “I think we’re going to look more at how to get messages across so we’re not wasting 50% of our spend,” he said, referring to the modest results of Levitra’s Super Bowl ads.

J.R. Buzzelli, Johnson & Johnson’s product director of women’s healthcare marketing, added: “Television is not the do-all and end-all of everything.”

Jack Barrette, Yahoo! category development officer, confirmed that dollars were already moving out of TV and into his Internet display ads and paid search formats. He said Yahoo! had received queries from the “Big 10” pharma companies in a “tidal wave of interest” in the medium.

“You have to spend $50 million to get TV to even work,” said Barrette. “Online, $10 million can make it pop.”

The fine print of the BMS policy still allows for plenty of DTC activity, noted Mario Cavallini, manager/competitive intelligence at SimStar, a Princeton, N.J.-based interactive marketing agency for Pfizer and AstraZeneca. “You could have disease-state advertising in general media that could drive traffic to a new drug Web site,” he said. “That’s one way it could play out.”

Competitors, naturally, were mum on BMS’s move last week. One vendor, Mike Luby, CEO of market research firm TargetRx, Horsham, Penn., said, “Inside every major company they’re looking at the pros and cons of this approach, asking . . . is there something in this move that some counter-move of ours could create an opportunity?”

One marketing academic took a more cynical view, noting that Congress is eyeing reforms to DTC, where some say there’s been over-the-top spending and irresponsible ad content: BMS is “hoping it will make some kind of impact on the government and regulatory bodies so they’ll say, ‘Hey look, they’re trying to do something — we’ll lay off them,” said Deborah Y. Cohn, a marketing professor at Yeshiva University’s Sy Syms School of Business in New York.

Reprinted with the permission of Brandweek.

Healthy Skepticism Library item: 1831

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