WHY DTC RX ADVERTISING IS NO PASSING FAD: GRAYING OF SOCIETY FUELS CONSUMER DESIRE FOR HEALTH INFO

Like most things new, advertising prescription medicines directly to consumers is causing all manner of controversy. Physicians protest that DTC advertising of Rx drugs plays havoc with the doctor-patient relationship. Many don't believe it's a justified expense. Others discount the advertising as a passing fad. But in 1997, pharmaceuticals marketers spent $1 billion buying media targeted to consumers. That's not fad money; it's smart money. That's because DTC advertising efficiently fills an important consumer need. And the need, simply, is information. LESS CONFIDENCE IN DOCTORS Consumers today tell us that, despite all the medical breakthroughs, they have less confidence in their doctors and rely increasingly on themselves to make important decisions regarding their health. But taking more responsibility for one's health cannot be done without easy access to good medical information. And this is what DTC advertising is all about: getting relevant medical information to interested consumers quickly and efficiently. Why should we believe DTC advertising will be with us for a long time? Because the need DTC ads satisfy is being driven by four interrelated and seemingly unstoppable megatrends: 1. Our aging demographic profile is the basic cause behind the boom in healthcare, and it will continue well into the new millennium. Older people are by far the heaviest consumers of healthcare products and services and, as the Census Bureau data indicate (see chart), the number of senior citizens will be getting much larger. Not surprisingly, our aging population profile is already driving healthcare spending. From 1990 to 1997, arguably the best eight years in our economic history, gross domestic product grew by a whopping 71%. But healthcare spending grew 133%, nearly twice as fast -- a performance all the more impressive given the cost cutting during these years. And this is just a prelude given how quickly our demographics will continue getting older. (No wonder the drug companies are trading at 50 and 60 times earnings.) 2. The boom is attracting enormous investment in R&D, which is yielding many more prescription options. In 1997, pharmaceuticals marketers invested a record $15 billion in R&D, and a record 53 new prescription medicines were approved -- more than double the 23 approved in 1990. We now have exciting therapeutic options unthinkable a few years back. That's great news; but doctors must now invest more time mastering the innovations as they come to market. 3. While doctors spend more time keeping current, managed care pressures them to see more patients. Something's gotta give! The whole premise behind managed care is that substantial savings can be realized by tightly managing the delivery of healthcare products and services. The final chapter on managed care is yet to be written, but the concept is here to stay, and it has caused fundamental changes, including changes to the doctor/patient dynamic. Today the doctor who sees the most patients makes the most money. But seeing more patients, when more time is needed to stay current, can only mean one thing: Patients get less time. And doctors admit as much. A recent Medical Economics study found 42% of doctors indicate they're spending less time with their patients. 4. Not surprisingly, consumers know they're getting less attention from their doctors. They're not happy about it, and they're filling the gap by getting more information on their own. Yankelovich reports consumer confidence in the "advice of doctors" dropped from 69% in 1993 to 59% last year. In 1997, Yankelovich found 76% of consumers agreed with the statement that "people should take primary responsibility for their own healthcare." But consumers need easy access to good information if they're going to play a bigger role in managing their health. And if information is what consumers want, smart marketers will line up to give it to them. It's that simple. LONG TIME And that's why DTC advertising investment has grown from $50 million in 1990 to more than $1 billion last year. So, from this corner, DTC advertising does not look like a fad at all, not even close. DTC is a measured response to a consumer need that's not being satisfied elsewhere. And, if our reading of the trends is correct, DTC advertising will continue to be an important healthcare marketing tool for a very long time to come. Mr. Sokotch is senior VP-group management director, Foote, Cone & Belding, New York. Census Bureau population estimates (in millions) 1990 2000 2010 2020 % chg Total population 249 275 298 323 +29% 65 years old+ 31.2 34.7 39.4 53.2 +71% 85 years old+ 3.1 4.3 5.6 6.5 +110% Percentage change compares 2010 estimates with 1990 figures. Source: U.S. Census Bureau

WHY DTC RX ADVERTISING IS NO PASSING FAD: GRAYING OF SOCIETY FUELS CONSUMER DESIRE FOR HEALTH INFO

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