DRUG GIANTS SHIFT DTC ADVERTISING STRATEGIES

Tighter Government Controls Anticipated

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PARSIPPANY, N.J. (AdAge.com) -- With a Food and Drug Administration public hearing scheduled in less than two weeks to debate the merits of pharmaceutical direct-to-consumer advertising, attendees of the “DTC at the Turning Point” conference were anxious to hear about the fate of the $4 billion industry. And the consensus was the only thing certain was change.
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'Hip to square'
“Drug companies are already changing,” said Bob Ehrlich, former VP-consumer marketing for Parke-Davis and CEO of DTC Perspectives, which sponsored the Oct. 19-20 conference. “DTC looks like DTC did in the early years, only with better production value,” he said. “Drug companies have shifted creative from hip to square.”

The upside, Mr. Ehrlich said, is that while spending on TV ads is likely to be down next year, 2006 will see “significant increases in Web advertising, direct marketing and at point of care.”

Yahoo's drug division
Bill Drolet, account executive and partner for Yahoo’s pharmaceutical division, predicted that pharma companies would up their Web spending budgets next year. “The pharmaceutical companies are looking for engagements and I think that’s something that Yahoo addresses,” he said. “I can see the drug companies spending 5% to 10% of their total budgets online next year.”

Asked why big pharma hadn’t yet fully embraced the power of the Web, Mr. Drolet said, “A lot of them didn’t think the Internet had scale. I think they do now.”

Moreover, Web advertising is certainly less expensive than a 30-second spot. In a presentation by Grey Worldwide Senior VP Allison Bailey and Exec VP-managing Partner Bob Burruss, a case was made that most pharma brands get by on relatively small ad budgets.

$100 million ad budgets
Of the 147 prescription medications advertised in 2004, according to Grey research, only 15 brands had ad budgets of more than $100 million and 100 brands had media spending of less than $25 million.

The industry is concerned that the Nov. 1-2 public hearings in Washington may lead the FDA to impose guidelines on DTC advertising that are stricter than the recently announced code of conduct from the Pharmaceutical Research and Manufacturers of America.

Peter Pitts, a former associate FDA commissioner who is now senior VP for global health at public relations giant Manning, Selvage & Lee, warned the industry to fight against what he perceives are blows to the first amendment.

“If we pursue restrictions on pharmaceutical DTC advertising and promotion, can a total prohibition be far behind?” he asked in a fiery rhetorical speech.

Whoppers and disposable diapers
“It’s certainly possible," he continued. "Then watch for steroid-injected special interests going after Big Macs and Whoppers -- after all, cholesterol kills. Hummers and SUVs -- an insidious plot by the oil industry to promote irresponsible petroleum consumption. Disposable diapers -- a real biohazard. M&M candies -- all of the colors are not equally represented. Sound absurd? When you hear people talk about banning, restricting or limiting any type of speech don’t be passive. Make no mistake -- advertising is on the cutting edge of free speech.”

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