TV DTC Advertising Is Not Dead Yet! - Pharma Marketing Network

March 2016 Vol. 15, No. 2

• Pharma Marketing Network® www.pharmamarketingnews.com

TV DTC Advertising Is Not Dead Yet! But Lawmakers, Politicians, & FDA are Aiming for the Head Author: John Mack

Published by:

Pharma Marketing Network

PMN1502-01

Pharma Marketing News

Vol. 15, No. 2: March 2016

PMN1502-01

A

ccording to Nielsen, the pharmaceutical industry spending on direct-to-consumer (DTC) advertising in the U.S. totaled $5.2 billion in 2015 compared to $4.3 billion in 2014—a 15% increase. This is close to the high mark of $5.4 billion spent in 2006 (see Figure 1, below).

Figure 1. DTC Ad Spend v. Drug Approvals Source: Spending data from Nielsen, drug approval data from FDA (see http://bit.ly/DTCspend2015).

One Big Leap for DTC It doesn’t take a genius to realize that when FDA approves more drugs for marketing, more marketing happens. In Figure 1, the number of new drugs (New Molecular Entities plus Biologics) approved by the FDA is plotted in an overlay to DTC ad spend to see if there is a direct correlation. There seems to be one if you allow for a delay in approval until advertising begins. Other factors, however, such as patent expiration, competition, etc., also play a role in determining DTC advertising budgets. Harvoni Case Study There are many factors that determine how much money a drug brand is willing to spend on DTC advertising. Resistance by payers and physicians and the specter of completion is high on the list. Harvoni, the $1,100-a-pill hepatitis C treatment marketed by Gilead, is a good example. Harvoni is among the Top ten DTC advertised drugs (see Figure 2, right). Gilead spent $139 million on promoting Harvoni to consumers in 2015. Much of that ad spend was on TV ads hosted by the major broadcast networks (ABC, CBS, NBC, and FOX) whose older viewers between 50 and 70 are 5X more likely than other adults to suffer from hepatitis C (see http://sco.lt/91i8kD).

© 2016 Pharma Marketing Network. All rights reserved. Pharma Marketing News

Figure 2. Top 10 Advertised Drugs in 2015: All Media vs. TV. Source: Nielsen via http://bit.ly/1RJhf0m and Kantar Media via http://bit.ly/1RhNPWl

Amid all the negative publicity about the high cost of Harvoni and competition from drugs such as Viekira Pak and Zepatier, sales of Harvoni in the U.S. have slowed down in the fourth quarter of 2015 and Gilead expects the same in 2016. Why? Payers are balking at the high price and physicians are taking a waitand-see attitude. As a result, Gilead is going directly to patients, trying to “push them” into talking with their doctors and requesting the medication by name. Reports of TV’s Death are Greatly Exaggerated Since 2011, the portion of DTC spending on TV has increased from 55% to 69% (see Figure 3, page 2). This is surprising because it’s been often reported Continues…

1


Vol. 15, No. 2: March 2016

PMN1502-01

Figure 3. Annual Spending on TV DTC Ads and Percent of Total Spending (see http://bit.ly/DTCspend2015).

that Americans are watching TV. Also, pharma's media spend seems out of sync with the time consumers spend on various media (“Pharma DTC Advertising Spend vs. Time Consumers Spend in Various Media" http://bit.ly/meekpharma).

So, as Americans are getting older and as pharma focuses more and more on drugs that treat diseases of old age such as Alzheimer’s, it's to be expected that more and more of the industry's advertising budget is devoted to TV.

“People talk a lot about how television viewership is eroding, and traditional media is fading, and that is all true,” Timothy Calkins, a marketing professor at Northwestern University’s Kellogg School of Management, is quoted as saying in a recent issue of STATnews (http://sco.lt/6surHF). “But the decline is very slow, and so there are still big audiences. And if you’re a pharma company, and you want to reach a lot of people quickly … there’s really no better place to go still than the traditional networks.”

CBS Is the Favorite DTC TV Network According to Kantar Media and as reported by STATNews, “advertisers of the top 20 best-selling drugs directed two-thirds of their TV ad spending last year on just four networks—broadcast titans CBS, ABC, NBC, and FOX” (see Figure 4, page 3). The median age of viewers of CBS, which garnered 28% of the TV DTC advertising dollars last year, was nearly 59 in 2014.

Also, as baby boomers age, more and more older Americans are watching TV. This is a prime audience for many of the top 10 advertised drugs, which treat conditions such as erectile dysfunction that affect mostly older people. As proof, Pfizer, whose current and future focus seems to be on "Getting Old,” accounts for about 30% of the total DTC ad spend (read " Pfizer Continues to Dominate DTC Ad Spending"; http://bit.ly/PfizerGetOld30).

But cable TV is also getting more drug ad dollars. The top 8 best-selling Rx drugs spent $380 million on cable TV in 2015 according to Kantar Media. The History Channel, Food Network, and Animal Planet were among the top recipients of pharma ad dollars. But pharma is not just buying 30 and 60 second commercial time on cable TV. Some drug companies are also integrating messages within programs. Such sponsorships are probably not included in the reported spend data. Branded product placements are Continues…


2


Vol. 15, No. 2: March 2016

probably rare, but disease awareness messages within story plots are being sponsored by pharma companies such as Boehringer Ingelheim, which has teamed up with Univison in a new campaign to drive awareness for Type 2 Diabetes through storyline integrations in the original production, “Bajo el Mismo Cielo” (Under the Same Sky).

PMN1502-01

integrations will be supported by a custom vignette airing in conjunction with the storyline and hosted by actor Juan Cepero in character as Cabrera, who will encourage viewers to visit www.cuidatudon.com for more information about Type 2 Diabetes. Is TV DTC Advertising Effective? Richard Meyer, a consultant and author of DTC Marketing Blog, contends that TV DTC ads are not cost effective in driving prescribing behavior. To succeed, says Meyer, DTC marketers need to focus more on an integrated approach that allocates more to digital marketing. In a recent Pharma Marketing Talk interview (http://bit/ly/PMT246), Meyer summarized the preliminary results of a study he performed that surveyed over 3300 people.

Figure 4. TV Ad Spend by Top 20 Drugs in 2015 by Network. Total Spend = $1.79 Billion. Source: Kantar Health via http://bit.ly/1RhNPWl

Listen here: http://bit/ly/PMT246

The FDA is also interested in determining the effectiveness of DTC advertising on TV and via other media. The Agency is proposing a "National Directto-Consumer Advertising Survey" of 1765 people and is currently soliciting comments on its plan in the Federal Register [Docket No. FDA-2016-N-0544; http://bit.ly/FDA-2016-N-0544].

BI Supports Undocumented Immigrants & Sides with Latino TV vs. Donald Trump. Bravo! See http://bit.ly/BIvTrump.

The plot of the follows Carlos Martínez, an undocumented immigrant living in Los Angeles. Carlos is a good, hardworking man who wants to give a good future and better opportunities to his children. According to the press release, storyline integrations will follow Andrés Cabrera, a character suffering from Type 2 Diabetes, as he manages his disease. The © 2016 Pharma Marketing Network. All rights reserved. Pharma Marketing News

FDA last surveyed patients about their attitudes toward DTC advertising in 2002 (read “Results from FDA Physicians Survey on DTC Marketing”; http://bit.ly/pmn2102p). Results from the 1999 and 2002 patient surveys on this topic indicate a number of areas for follow-up including: • the percentage of patients who are likely to receive a prescription when they ask for a specific brand, • the influence of DTC ads in prompting further information search about the product or the medical condition, Continues… 3


Vol. 15, No. 2: March 2016

• patients’ perceptions about the amount of information about the products’ risks versus benefits, and • patients’ perceptions that the ads sometimes make the products seem better than they really are. "Numerous changes have affected the DTC landscape since 2002," said FDA, "including declines in print readership, the rise in online prescription drug promotion, and self-imposed industry guidelines for DTC advertising. These changes may have affected consumers' exposure to different kinds of DTC advertising and its influence on their attitudes and behaviors. The purpose of the National Direct-toConsumer Advertising Survey is to collect updated insights on consumer experiences with and attitudes towards DTC promotion of prescription drugs. This study will build on previous research by recruiting a wider range of respondents, weighting the data to make it nationally representative, and ask a wider range of questions about DTC promotion, including in online formats." FDA's survey contains questions about respondents’ knowledge of FDA's authority with respect to prescripttion drug advertising, their exposure to DTC advertising, their beliefs and attitudes about DTC advertising, and the influence of DTC advertising on further information search and patient-physician interactions. FDA Plans More DTC Studies FDA recently proposed a study of the Effect of Superimposed Text in TV DTC ads. See the announcement in the Federal Register on March 9, 2016 [Docket No. FDA-2016-N-0735; http://bit.ly/FDA-2016-N-0735].

PMN1502-01

This study seeks to extend previous research on the effects of supers in general print and television advertising to today's modern DTC pharmaceutical promotion. Although earlier research on the effects of supers in other consumer settings suggests that altering text size can influence consumer comprehension of information, it is unclear if these findings extend to DTC promotion of prescription drugs and are applicable over 20 years later when viewing promotional materials using today's modern technologies (e.g., tablets). FDA will examine reactions to supers in a fictitious DTC prescription drug promotional video on two types of viewing devices—TV and digital tablets— with a general population sample. Other DTC research in progress at the FDA includes (see http://bit.ly/FDADTCstudies): Animation in DTC Advertising: This research will provide information on whether ani-mation influences the recall and perceptions of risk and benefit information in DTC ads. Comparative Price Information in DTC Advertising: FDA will study the impact of price comparison information and additional contextual information on prescription drug product perceptions. Consumer and Healthcare Professional Identification of and Responses to Deceptive Prescription Drug Advertising: This project will examine the ability of consumers and HCPs to identify deceptive prescription drug adver-tising, and the influence of such advertising on their attitudes and intentions toward the advertised drug. Disclosure Regarding Additional Risks in DTC Prescription Drug TV Ads: FDA plans to investigate the effectiveness of a “limited risks plus disclosure” strategy (see http://bit.ly/fdadtcstudy). Study of DTC Advertising Directed at Adolescents: FDA proposes to explore differences in effects of the ad manipulations across these three age groups on a variety of outcomes, including benefit and risk recall, benefit and risk perceptions, and behavioral intentions (see http://bit.ly/pmn131002). Hearing, Aging, and DTC Television Ads: This study will explore how hearing and cognitive de-clines in older adults affect comprehension of DTC television ads in general and of the major statement of risks in particular. Impact of Ad Exposure Frequency on Perception and Mental Processing of Risk and Benefit Information in DTC Prescription Drug Ads: FDA plans to examine the effects of variation in ad exposure frequency on perception and mental processing of risk and benefit information in DTC prescription drug ads (see http://bit.ly/FDAtorture).

Continues… © 2016 Pharma Marketing Network. All rights reserved. Pharma Marketing News

4


Vol. 15, No. 2: March 2016

Major Statement Content Analysis: FDA plans to capture characteristics of risk presen-tations, including speed of presentation, complexity of the language, and the voice frequency of the statement. Market Claims in DTC Prescription Drug Print Ads: This project will examine market claims in the context of a DTC print ad with and without product efficacy information. Quantitative Information in Direct-to-Consumer Television Advertisements: The studies in this project are designed to address the question of whether consumers can take more com-plicated information into account when assessing prescription drug information in television DTC ads.

One study—“Spousal Influence on Consumer Understanding of, and Response to, DTC Prescription Drug Advertisements” (read “Does Your Spouse Influence Your DTC Viewing Experience?”; http://bit.ly/pmn131003p)—was not completed. According to the FDA, some components were withdrawn “due to concerns about their practical utility.” Consider a Partial DTC Ban With higher drug prices and the resurgence of DTC advertising, it is no wonder that there are several proposals out there to ban DTC altogether (read

PMN1502-01

“Anti-DTC Resurgence”; http://bit.ly/pmn140701p) or to hobble it by eliminating the business tax deduction for DTC advertising (read “Senators Beat Hilary to the Punch: Propose Ending #Pharma Advertising Tax Deduction”; http://sco.lt/4hOsIz). Pharma Marketing News readers were surveyed on the tax issue in 2009. 39% agreed that the tax deduction should be eliminated and another 30% said maybe (see http://bit.ly/1QVMxCB for more details). As for banning DTC advertising, I once said that would be about as likely as Donald Trump being elected president. You know where that’s going! What I propose is an experiment. Most of the criticism of DTC advertising is focused on TV ads, which may not be as effective as the drug industry claims. I suggest that the industry adopt guidelines that eliminate TV broadcast DTC advertising of brand name drugs (new or old), but allow print and Internet-based DTC advertising. Disease awareness TV ads, which generally are not a target of DTC critics in Congress and elsewhere, can continue. Drug companies could pocket the money saved or spend it on more effective print and Web promotions or on additional disease awareness TV ads. Pharma Marketing News

Click here to take the survey, get summary of results afterward. https://www.surveymonkey.com/r/HF8M7R9


5