Pharmaguy's Insights Into Drug Industry News
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Pharmaguy's Insights Into Drug Industry News
Pharmaguy curates and provides insights into selected drug industry news and issues.
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Will It Be Downhill from Here for DTC Advertising?

Will It Be Downhill from Here for DTC Advertising? | Pharmaguy's Insights Into Drug Industry News |

For all the talk about digital migration and channel agnosticism, pharma companies remain huge fans of direct-to-consumer television ads. In 2016, pharma spent $4.06 billion on TV buys, up 4% from $3.91 billion in 2015, according to Kantar Media.


[According to data from Nielsen, the U.S. drug industry spent $5.6 billion on DTC ads, excluding digital ads (read “Direct-to-Consumer #Pharma Drug Ad Spending at an All-Time High”; According to the Nielsen chart shown here, the 2016 spend may have been $5.8 billion (excluding digital but including cinema).]


Related: Spending in and around much-heralded digital channels was more or less flat ($515 million in 2016 versus $516 million in 2015).


[This number probably does not include search. Thus the digital DTC ad spend is only about 8% of the total DTC spend!]


So, pharma loves TV and TV loves pharma — or, to be more specific, its endearing generosity (read “Big Pharma Spending on TV Ads Like a Drunken Sailor”; But in the past 18 months or so, there has been an increasing sense that the rest of us may not be quite as sold on the marriage.


The first vocal pushback arrived in October 2015 when ­members of the MS community expressed some less-than-appreciative thoughts about the images and patient depictions in a Biogen TV spot for Tecfidera (read “More DTC Ad Backlash. This Time from Patient Bloggers!”; Bristol-Myers Squibb found itself on the receiving end of a similar response when its own series of ads for Opdivo made promises that, patients and caregivers alike proclaimed, the drug could not keep (read “Opdivo TV Ads "Educate" Patients About the Positive, Not the Negative Trial Data”;


Taken in tandem with the anti-DTC sentiment preached by the American Medical Association (which has aggressively advocated ending the practice of advertising drugs directly to consumers) and the link alleged by many activists between pharma DTC spend and drug prices (which, once more for the record, is specious at best), one might well wonder if DTC on TV has reached an inflection point.


[Anti-DTC sentiment from American Medical Association and the American Society of Health-System Pharmacists.]


Could it be all downhill from here?


Further Reading:

  • “Is DTC Drug Advertising Effective? More - & BETTER - Research is Necessary”; 
  • “Big Pharma Spending on TV Ads Like a Drunken Sailor”;
  • “Who Said DTC Ads Are Not Effective? Those ‘Knotty’ Linzess Ads Increased Sales by 30% Claims Ironwood Executive”;
  • Pharma Marketers Spend Too Much on TV Because of the ‘Fame & Glory’ It Brings”;
Pharma Guy's insight:

Patients have sounded their opinions loud and clear, in social media and elsewhere. Whether pharma's many DTC-on-TV boosters have heard them remains very much open to debate.

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As Blockbuster Drugs Near Lifecycle End, #Pharma TV Ad Spending Rises

As Blockbuster Drugs Near Lifecycle End, #Pharma TV Ad Spending Rises | Pharmaguy's Insights Into Drug Industry News |

The list of top pharma TV spenders for April featured blockbusters and cliffhangers. The top three spenders Lyrica, Humira and Latuda, in fact, have been major blockbusters for their manufacturers, but are also facing sooner-rather-than-later patent expirations.


No. 1 Pfizer’s pain and seizure drug Lyrica spent almost $26 million for the month, easily doubling its ad spend from the previous month and unseating AbbVie's Humira from its top-spender position, according to real time TV tracker


Pfizer's top seller, Lyrica has been in the news as it tries to fight off generics by defending its pain-indication patent. Pfizer lost that battle in the U.K., where generics have since made their debut, but in the U.S., a patent decision blocks generics until 2018. The Lyrica TV spot that garnered the most spending was Coach, a new creative execution about a female softball coach focused on fibromyalgia pain.


Up next on the April TV spender list was Humira, which until now has held the top spot every month in 2016. The AbbVie anti-inflammatory brand split $24 million on TV ads among its three indications for arthritis, Crohn’s disease and colitis, and psoriasis, according to iSpot’s data. Humira’s main patent expires this year; but AbbVie remains confident that it won't face biosimilars in the immediate future. The company sees Humira sales – which make up more than half of its revenue – increasing through 2018, with only small decreases in the following two years.


The No. 3 spender, Sunovion’s anti-psychotic Latuda, also faces a patent expiration this year, and it dropped more than $17 million on TV ads in April. A new ad launched last month continues its ongoing story of bipolar depression sufferer Amy, but told through the perspective of her husband Scott.


Three diabetes drugs also made April’s top 10 – AstraZeneca’s Farxiga, Novo Nordisk’s Victoza and Sanofi’s Toujeo – as competition remains fierce in that disease.


Overall spending rebounded among the top 10, totaling $138.6 million in April for a 30% increase over the $108 million spent in March.

Pharma Guy's insight:

For a more in-depth analysis, read "TV DTC Advertising Is Not Dead Yet!"; 

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eMarketer Estimates HC Industry Direct Response Advertising

eMarketer Estimates HC Industry Direct Response Advertising | Pharmaguy's Insights Into Drug Industry News |

This year, the US healthcare and pharmaceutical industry will invest $1.41 billion in paid digital advertising, according to a new eMarketer report series on industry-by-industry digital ad spending. When it comes to mobile ad spending, the industry lags behind.

eMarketer estimates that industry advertisers—including marketers of prescription and over-the-counter products, facilities, services, research, healthcare professionals, hospitals and biological products, as well as establishments providing healthcare services, health insurance and social assistance for individuals—will invest 56% of their paid digital dollars in direct-response efforts this year. The remaining 44% will be invested in branding-focused campaigns.

Pharma Guy's insight:

Be careful not to attribute any substantial portion of this spending to the branded pharma industry.


According to Nielsen estimates of DTC Spending by Medium, Internet spending by brand pharma companies is only 1.6% or $59.8 million of the $3.8 billion total ad spend in 2013. This does not include search, which eMarketer includes in its “direct response” category. Including search, pharma may spend about $120 (approx. 2X $59.8) million on digital advertising to consumers. eMarketer includes advertising to physicians in its estimate. So, let’s assume pharma spends another $100 million on digital advertising to physicians (including eDetailing). The total then is $120 + $100 = $220 million spent by pharma on digital advertising in 2013. $220 million represents only 17% of the $1.29 billion eMarketer says the “Healthcare Industry” spent on digital in 2013. Even if my estimate is off by a factor of 2, pharma represents less than half the eMarketer digital ad spend estimate for the “Healthcare Industry.”

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Big Pharma Spending on TV Ads Like a Drunken Sailor

Big Pharma Spending on TV Ads Like a Drunken Sailor | Pharmaguy's Insights Into Drug Industry News |

And the spend goes on. The latest pharma ad news is from Morgan Stanley, which notes pharma companies are leading the way in a national TV spending upswing.


The pharma category is up 20% in TV spending so far, after increasing by 20% in 2015, according to the research note reported by Yahoo. Overall, TV ad spend increased by 6.4% and 5.3% in Q4 2015 and Q1 2016, respectively.


However, it’s not a new conclusion. Pharma ad spending overall has been resurging for the past several years, and reached $5.4 billion last year, tying the previous record set in 2006, as tracked by Kantar Media. Pharma companies spend the largest percentage of their ad budgets on TV, often more than two-thirds in the case of the top TV drug ad spenders.


Data from realtime TV tracker also showed TV spending up with big jumps in January and February over previous months among the pharma top 10 spenders.


The recent plethora of pharma TV ad spending prompted WPP’s ad buying unit Group M chief investment officer, Rino Scanzoni, to tell the Wall Street Journal in April, “Pharmaceutical companies have been spending money like drunken sailors.”


The Yahoo coverage of the Morgan Stanley note claims the TV ad growth is evidence that digital spending is shifting back to TV. The WSJ story quoted sources saying consumer giant Procter & Gamble was moving some digital money back into TV, and where that CPG bellwether goes, others are bound to follow. However, it should be noted the economy is also a factor, with ad spending tending to rise in general as economic fortunes go up.

Pharma Guy's insight:

Also read: "TV DTC Advertising Is Not Dead Yet!"; 

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Direct-to-Consumer (DTC) Drug Ad Spending Ties Record Set in 2006

Direct-to-Consumer (DTC) Drug Ad Spending Ties Record Set in 2006 | Pharmaguy's Insights Into Drug Industry News |

It's a tie. Pharma advertisers spent $5.4 billion in 2015, tying the previous industry record set in 2006, according to new data from Kantar Media. That's an increase of 19% over the category's $4.53 billion tally for 2014.

Kantar, which is expected to release the full data next week, prereleased the 2015 total along with the top five drug brands spending to FiercePharmaMarketing. The top five spending tracks with the overall accelerated spending trend and rose to $1.34 billion, an increase of 14% from $1.15 billion in 2014. Four of the top five drugs notched spending increases in 2015, with three leaping more than 30% year over year.

Leading the Kantar list is AbbVie's ($ABBV) blockbuster anti-inflammatory Humira with spending of more than $357 million on TV, print, radio and accumulated advertising. That's an increase of more than 37% over last year's No. 2 ad spend of $260 million. AbbVie seems determined to send the drug out with a bang as it loses patent protection later this year and soon will face biosimilar competition.

Pharma Guy's insight:

This data from Kantar updates previous data reported by Nielsen, which estimated 2015 DTC spending to be $5.2. See here: 

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