Pharma Online Spending to Hit $1 Billion This Year

But Growth Stymied by Lack of Clear FDA Guidelines

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NEW YORK ( -- Pharmaceutical online ad spending is expected hit $1 billion this year and keep rising through 2014, according to report prepared by eMarketer. But until the Food and Drug Administration issues its draft guidelines for online pharma marketing, that growth remains limited.

"Pharma marketers are waiting around," said eMarketer's Victoria Petrock, author of the report "DTC Pharmaceutical Marketing Online: A Slow Shift to Digital." "They are trying to test the waters but realizing that the FDA isn't going to come down with a template or a hard-and-fast ruling. Even when that happens, there's still going to be a process of give-and-take and experimentation."

U.S. health-care and pharmaceutical online advertising spending will reach $1 billion for the first time this year, up 10.6% from last year, according eMarketer. By 2014, online ad spending in the health-care and pharmaceutical industry, which includes direct-to-consumer and over-the-counter remedies, is expected to reach $1.52 billion. Yet despite those growth rates, pharma's share accounts for only about 4% of overall U.S. online ad spending.

Part of the problem is waiting on the FDA. The agency does not have definitive guidelines for online advertising by the industry, particularly in the social-media realm. It held two days worth of public hearings last November in Washington. Public comments were taken by mail and e-mail through February.

"The industry knows they have to be online. They just haven't really geared up the machine to figure out how they're going to do it," Ms. Petrock said.

"That's the problem," said a brand manager for one of the top five pharmaceutical companies, who asked not to be identified. "You read survey after survey after survey, and they all say that health seekers go online more and more to find information. But it's hard to talk to them in that medium without guidelines, because then you're risking a [FDA warning] letter."

Indeed, a recent Harris Interactive survey showed that 88% of adults seeking health-care information were doing it online.

FDA online marketing guidelines are expected by the end of 2010 or beginning of 2011. But don't expect new policies to address all the questions and concerns from drug makers and their ad agencies.

"The good news is, more and more pharmaceutical regulatory and legal departments are figuring out ways to say yes to online and social-media marketing, rather than finding ways to say no," said Peter Pitts, partner and director-global health at Porter Novelli, president of the Center for Medicine in the Public Interest, and a former FDA associate commissioner. "The bad news is, the FDA is not going to solve everybody's problem. They're going to come in with low-hanging fruit for online guidance and it probably won't solve everybody's issues, especially in social marketing."

Ned Russell, exec VP of New York-based health-care ad agency Saatchi & Saatchi Wellness, agreed.

"It's a very precarious thing," he said of the expected FDA guidelines. "Right now, everybody is in a waiting position to see what the FDA will do. There's nothing cemented. This is a highly regulated environment where you have to report an adverse condition. What happens when it becomes almost impossible to monitor and responsibly handle the reporting of that?"

Still, Mr. Russell is optimistic.

"I think every pharma company realizes they have to be online and in social," he said. "In fact, I think they'll beat that 2014 number handily, and well before that."

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