Record Year: Pharma Outlay Could Reach $5 Billion

Support for Lunesta and Ambien Drives Spending Up 9% in First Half of 2006

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NEW YORK ( -- So much new marketing guidelines and political and public pressure: Pharmaceutical companies increased their direct-to-consumer spending nearly 10% through the first six months of 2006 compared to the same time period in 2005, putting DTC on pace to spend a record $5 billion this year.

Thanks in part to large expenditures on insomnia medications Lunesta and Ambien CR, drug manufacturers spent $2.47 billion on DTC from January through June of 2006, according to TNS Media Intelligence, with the largest spending increases registered by print and local radio.

Spending overall was up 9% from the $2.26 billion spent during same period in 2005, a particularly good omen for the industry, which adopted a code of conduct Jan. 1 for marketing as instituted by its umbrella group, the Pharmaceutical Research and Manufacturers of America.

"Essentially what's happened is, the industry has figured out how to do good advertising even under the constraints of the PhRMA guidelines," said John Kamp, executive director of the Washington-based Coalition for Healthcare Communication. "It's turned out to be good business because consumers seem to be more receptive to this new advertising as opposed to the hard sell of DTC."

Stemming backlash

Adhering to the PhRMA guidelines seems to have helped the industry stem some of the public and political backlash it suffered since late 2004, when Merck's Vioxx-one of the most heavily advertised drugs-was taken off the market after a clinical trial showed the drug increased the risk of heart attack in some patients.

Ironically, Merck is one of the reasons why spending has increased in 2006. The Whitehouse Station, N.J., company spent $67 million during the first half of this year on corporate branding, an increase of 438% over the $12.5 million it spent in 2005. Merck also upped its outlay on Singulair by 26%.

But the biggest increases came from sleep aids Lunesta and Ambien. Sepracor spent $162 million through June of this year to market Lunesta, a 289% jump over last year, and Sanofi-Aventis committed $114 million on Ambien, more than double the $56.2 million it spent in the first six months of 2005.

Pfizer also increased spending on Lipitor by 86% to $62 million, while GlaxoSmithKline upped its outlay on corporate branding by 25%.

Drug companies did shuffle some of their spending among the media. Network TV spending was up slightly in the first half of 2006, from $855 million to $887.2 million, but overall TV spending was down 5%. Magazine spending, on the other hand, was up 17%; newspaper spending was up 13%; and local radio increased 44%.

"I'm not surprised print got a good bump," Mr. Kamp said. "The PhRMA guidelines call for an increased focus on risk information, and print is the place where that's done."
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