Explaining the DTC-NME disconnect
With annual approvals for NMEs at their lowest point in a decade, one would think pharma would launch fewer ad campaigns. Why does pharmaceutical DTC ad spend continue to grow despite the dearth of new products?
VP, media director
EvoLogue, part of CommonHealth
Ad campaigns are used to launch new brands as well as support existing ones. The categories that drove 1Q spend were cholesterol and insomnia, very competitive categories. The spending will likely increase in cholesterol, with so many brands, and new clinical results and combined therapies will likely be driving future news. Insomnia is a patient-driven category that will also continue to spend as the products work for share and category growth. The lack of NMEs results in a dependence on older products. We also know that DTC campaigns help patient adherence and can be used to model behavior and dialogue. The power of DTC to shape how patients and docs communicate can be a tool for brands to help patients present in a language that connects with docs for better outcomes. As we learn more about how DTC can influence this, we will see more brands being supported in this way.
As the detectives say in TV crime dramas , “Follow the money.” If a pharma company needs a steady pipeline of new products to demonstrate financial well-being, what happens when that pipeline isn't so steady? The company needs to generate as much profitability out of its existing products as it can. So blockbusters, ones that previously had a large launch budget in year one followed by diminishing DTC advertising support in years two, three and beyond, now warrant continued heavy ad budgets—because the pipeline isn't yielding a steady flow for the pharmaceutical company to bank its profits against. DTC advertising is a successful investment. What we're seeing is that that investment is being played out against fewer molecular entities. But the pharma companies still need to answer to the same bottom line.
GSW Worldwide (Columbus operations)
Fewer NMEs places more accountability on pharma marketing and sales to optimize in-line value. One way to expand market share of existing products involves reaching out to consumers/patients.
Two key factors are driving this trend:
• Information is power: Patients can drive market share for pharma. Getting these key stakeholders involved in the dialogue that leads to a prescribing decision is simply smart marketing.
• Physicians are humans first: “Consumerism” is very relevant with physician customers, especially in undifferentiated categories. Factors such as emotions, beliefs and behaviors affect the way docs view products. Some of the most eager DTC spenders are in “me-too” battles with sleep aides, ED, lipid-lowering, etc. Marketers will further stimulate brand loyalty by utilizing consumers as a connecting point to the doc's brand experience.
SVP, group account director
One could speculate that the last of the great brands have gone away. What remains are last-minute surges to sustain brands. Another might think pharma is trying to off-set cutbacks in its sales force with more advertising. After 10 years of DTC, maybe pharma finally has an understanding of ROI. Perhaps rising co-pays have forced pharma to foster stronger relationships with consumers. Or have docs finally come to accept DTC as “patient education” rather than a threat to their authority? We know product launches fuel spending. When launches slow, there is pressure to drive sales to existing drugs and, hence, spending increases. Drug companies will continue to be faced with delayed or denied launches and brands continually going off patent.