Don't count out DTC marketers

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Despite some consumer backlash and the possibility of government legislation, the pharmaceutical industry and direct-to-consumer advertising continue to thrive. DTC drugs posted a 27.5% increase in 2004 to $4.43 billion in measured media, though DTC's stampede days appear to be numbered.

DTC has suffered, at least in prestige and image, from the fallout of the Food & Drug Administration's withdrawal of Merck & Co.'s Vioxx from the market and its request to cease all marketing for Pfizer's Celebrex. Both prescription medications combat arthritis, and both have been linked to increased risk for heart attacks.

Actions against Vioxx and Celebrex happened within weeks of each other late in 2004, and overshadowed what has been Big Pharma's saving grace: the anti-cholesterols.

Pharmaceutical marketers spent $442 million in measured media last year on anti-cholesterol drugs, up 98.2% from 2003, according to TNS Media Intelligence. That's almost $60 million more than the pharma houses spent on erectile dysfunction drugs, the No. 2 DTC category in spending. Sales for anti-cholesterol medications responded with 16% growth to $19.82 billion in 2004, according to NCD Health figures that represent middleman payment to the retailer (see chart).

The category has been a mainstay for years due to Pfizer's Lipitor and Merck's Zocor. Lipitor sales were more than $7 billion last year for a 42.2% share of market; Zocor sales were $5.5 billion for a 22.9% share. Bristol-Myers Squibb Co.'s Pravachol also has been a consistent seller, with nearly $2 billion in 2004 sales, according to NDC Health.

Most recent action in the anti-cholesterol drug category, though, is coming from the bottom-to-middle up, specifically from AstraZeneca's Crestor and Merck/Schering-Plough Corp.'s Vytorin.


"You had two things happen here that blew the category apart," says one healthcare agency president. "Crestor kicked in a full DTC campaign and was probably in the top five spenders of any prescription drug. Then you had the fourth-quarter launch of Vytorin, which, between the unbranded and branded stuff, really boosted things."

Indeed, AstraZeneca spent a whopping $216.2 million on Crestor in 2004-almost double the $112.1 million spent on market leader Lipitor-and Merck/Schering-Plough spent $50 million on Vytorin just in the final four months of 2004 after the drug was approved by the FDA.

Vytorin is a combination of two cholesterol-fighting drugs, Merck's Zocor and Schering-Plough's Zetia.

The reason the category has thrived for so many years is that many of the anti-cholesterols are still under patent protection. Unlike other categories, such as hypertension or allergies, anti-cholesterols don't suffer from competition from generics or from over-the-counter products that are considered to be the equal of the prescription medications.

Yet, for that very reason, this may be the last hurrah for the category. Zocor comes off patent protection next year, and it remains to be seen whether Vytorin alone will be able to fill the $6.25 billion in combined sales from Zocor and Zetia.

"It's a big category, and there's a lot of competition," says a VP-marketing for one of the pharmaceutical companies. "The bottom line is that, by far, the treatment remains the single-biggest drug category by a long shot. And if you compare the amount spent in advertising to what it produces in sales, the ad-to-sales ratio is still below many other categories."