PHARMACEUTICAL COMPANIES AND THE FOOD & DRUG ADMINISTRATION FACE GREAT CHALLENGES AS THEY WORK ON DESIGNING A MARKETING MAP FOR THE FLOURISHING DIRECT-TO-CONSUMER PRESCRIPTION DRUG UNIVERSE: PRESCRIPTION FOR PROFIT

By Published on .

Prescription drug advertising has become nearly a $900 million consumer media tidal wave.

Direct-to-consumer advertising has confronted the public with squeamish subjects such as herpes, impotence and toe fungus. It has also brought treatment news for allergies, high cholesterol, HIV and migraines. They are indicative of the trend by the healthcare industry to shift more responsibility to consumers.

SKYROCKETING SPENDING

Only four years ago, prescription drug marketers spent about $160 million on DTC advertising. That jumped to $350 million in 1995 to match industry spending on advertising to reach physicians. In 1997, DTC spending was more than double the $438 million spent on ads in medical journals, according to PERQ/HCI Corp., which tracks journal spending.

"We're in the midst of an explosion in DTC," says John Kamp, senior VP of the American Association of Advertising Agencies.

Most industry experts agree the amount of money spent on advertising by prescription drug marketers will exceed $1 billion, due to friendlier Food & Drug Administration guidelines and the continued strong interest from drugmakers.

FASTEST GROWING CATEGORY

Spending on DTC prescription drug advertisements is projected to have had a nearly 50% growth rate for 1997, making it the fastest growing major category -- outstripping even technology advertising. Everyone wants a piece of the action and healthcare divisions of mainstream agencies are battling it out with general marketing arms of specialty medical agencies.

Some see remaining exponential growth potential to come. Alex Zisson, senior pharmaceutical analyst for Hambrecht & Quist, dramatically offers that if DTC brands come close to the support consumer brands get, typically 30% to 35% of sales on advertising, then a huge brand like Eli Lilly & Co.'s anti-depressant Prozac would get the equivalent of a $1 billion campaign.

Lilly is comparatively new to the concept of DTC advertising, considering some efforts began more than 17 years ago.

MERCK BROKE GROUND

Merck & Co. is a pioneer in the DTC prescription drug advertising arena. In 1981, it tried to market Pneumovax, a pneumonia vaccine, but faced uncertain FDA guidelines. Other prescription drug marketers followed suit with advertising of their own. As a result, the FDA called for a DTC advertising moratorium in 1983. In 1985, the agency lifted the suspension without offering any new guidelines for advertisers.

Left with vague rules developed in 1969 to address advertising in medical journals for physicians, pharmaceutical companies attempted to translate them into a consumer environment.

The result was print ads with micro-type text listing precautions, side effects and warnings found on package inserts and illustrated by chemical molecules.

TV was even more confounding to DTC prescription drug advertisers, since the FDA would permit one of two seemingly impractical choices. A pharmaceutical company could promote its brand but not say what it should be used for; or it could discuss an ailment without identifying the drug treatment. Both types of commercials couldn't run concurrently, but a supporting print campaign with full information was permissible.

Guidelines were relaxed in August for TV advertising as part of an 18-month experiment. The ads may mention the name of the product and the ailment it treats as long as main side effects are announced and consumers are directed to Web sites and print ads for full information disclosure.

BETTER FDA COMMUNICATION

The change, while not making everyone happy, signals a newly open FDA. Just a few years ago, drug companies and advertising agencies feared opposing the agency -- which also controlled drug approvals -- about the ad policy. Today, more open lobbying and communication goes on with the FDA. And drug companies, once highly secretive, are becoming more comfortable with public discussion.

Current guidelines are not set in stone and publication industry groups, hoping to shrink the lengthy "brief summary" of print ad disclosures, are now also pushing for updates. The FDA is pondering whether or not guidance is needed for the Internet.

ALLERGY GETS $250 MILLION

The vast increase in advertising spending has come in the last two years and primarily from eight marketers. Glaxo Wellcome has been the overall biggest spender supporting various brands; Schering-Plough Corp. has put the most support behind a single brand, Claritin.

Claritin, along with Hoechst Marion Roussel's Allegra and Pfizer's Zyrtec and Glaxo's Flonase make up the powerhouse allergy category, totaling about $250 million last year. The HIV-related drugs category has the most brand players, with more than 10 products.

MORE BRANDS TO HIT

And other categories such as baldness, impotence and obesity are expected by many in the industry to add perhaps hundreds of millions in spending this year total.

Merck & Co. is preparing to launch Propecia, the first alternative to Rogaine for hair loss. Vivus, marketer of the prescription impotence drug Muse, was rejected by NBC for the Super Bowl, though it reappeared on other networks later. Schering's Vasomax and Pfizer's Viagra are on the way to challenge the small marketer. And, despite the unraveling of American Home Products Corp.'s obesity drug Redux, Roche Laboratories will soon launch Xenical and Knoll Pharmaceutical's Meridia is not far behind.

RESEARCH IS NEEDED

Research is becoming more important as advertisers and FDA wait to see how the public responds to the increased presence on TV by DTC ads. While the FDA won't conduct any itself, it is looking to the private sector for information.

Among the most important issues DTC advertisers face are the effectiveness of their advertising and whether or not required TV disclosures frighten consumers. Though the disclosures are included in print, the sense is that they're more prominent on TV and even more so on radio. Radio, with its small portion of the DTC pie, may be suffering from the perception that audio alone makes such disclosures the most difficult.

Despite the challenge, Mr. Kamp says, "Companies not only have the right to tell the truth about their products, they have a responsibility to do so. A pill is just a poison if it's not surrounded by information on how to use it."

In this article:
Most Popular