Pharma sought safe havens for DTC in '09
Pharma marketers mimicked a savvy Wall Street investor for much of this year, placing safe bets and seeking value. That's likely to be the year's defining pattern, says one DTC media expert.
Through the first nine months of the year, the top 10 pharmaceutical advertisers—which included heavyweights Pfizer, Merck, GlaxoSmithKline, Eli Lilly and AstraZeneca—displayed more conservatism when marketing to consumers, decreasing spend from $955 million to $865 million, according to Nielsen figures.
The roughly 9% decline was due in large part to companies lessening use of pricey network TV, taking a harder look at which brands should be supported by DTC, as well as considering how to measure the medium's effectiveness, said Deborah Dick-Rath, SVP and healthcare practice leader at FactorTG, a technology company which measures marketing effectiveness.
With few events likely to trigger a significant fourth-quarter upswing, Dick-Rath said she expects that trend to be borne out in full-year figures. “There have been a few new launches in the fourth quarter, but none are at the spend levels that we have seen in the past,” she said. “There have also been some revised campaigns and change-ups for established brands, but, again not at heavy spend level.”
As the year started, controversy swirled over the DTC medium, a new administration bent on healthcare reform took hold in Washington, and the economy was reeling from one the biggest recessions in its history. Not to mention that in 2008, only 21 new drugs were approved by the FDA.
In light of this, companies put most of their marketing resources behind blockbusters. “Overall, for most companies, there has been realignment behind brands that show pay-out and less willingness to risk expenditure if significant ROI is not predicted,” Dick-Rath observed.
Pfizer placed heavy support behind cholesterol drug Lipitor—$155 million through the first three quarters, according to TNS Media Intelligence, making Lipitor the top DTC advertised brand during that period. The company's other DTC advertising—for neurology treatment Lyrica, stop-smoking pill Chantix, as well as COPD treatment Spiriva (with Boehringer Ingelheim)—kept Pfizer in first place with $704 million spent on DTC, according to the nine-month Nielsen figures.
Otsuka Pharmaceuticals, which co-markets depression med Abilify with Bristol-Myers Squibb, exemplified the blockbuster mindset. The company spent $150 million through the first nine months on DTC, a 75% increase compared to the first nine months of 2008. Not coincidentally, Abilify was the number-two DTC brand during that time frame, with $150 million spent on consumer advertising, TNS figures show.
Companies lessening their overall expenditure included GlaxoSmithKline, which reduced DTC outlays by about 40% as of September, in line with predictions CEO Andrew Witty had made earlier in the year that the company would do less TV advertising in 2009 than it had in the past.
Merck also reduced spend by nearly 17%, the nine-month data show, reflecting decreased outlay behind its cardio franchise (Vytorin and Zetia) and the HPV vaccine Gardasil, as well as its merger with Schering-Plough. Eli Lilly's 24% decrease, meanwhile, was due to a pull-back in areas like diabetes, as the firm concentrated efforts behind depression med Cymbalta ($141 million) and ED pill Cialis ($122 million), the number-three and -five DTC brands, respectively, per TNS September 2009 data.
“Because 2009 was such a transitional year economically, many companies were more conservative in their spending, and more eager to look for less expensive marketing channels to reach consumers,” Dick-Rath said.
One example: pharma more than tripled its online spend to $221 million during the year's first three quarters, from $63 million during the prior year's first nine months, according to TNS.
Commenting on the greater use of cable TV, national magazines and Sunday supplements, Dick-Rath added, “As [companies] evaluate the mix, return and impact of those channels, ‘DTC' itself will continue to be less of a blunt instrument, but continue to evolve and to become an important part of pharmaceutical communication planning."