Drug companies spent $5.0 billion on marketing prescription drugs directly to consumers last year and, as I have written in the past, these ads have paid off. Studies have found that every dollar spent on DTC ads generates up to four dollars in additional sales of new drugs that are often only marginally better than far cheaper, generic versions or older drugs.
But as companies cut advertising budgets and introduce drugs that command smaller markets, there are signs that the days of $100 million-plus DTC ad campaigns might be over. A recent report by TNS Media, (a company that tracks media ads) found that DTC drug advertising was down 8% last year. Another survey of pharmaceutical industry marketers found that 58% of them plan to decrease DTC advertising this year, up from 28% in 2008.
One reason for the slowdown, according to the TNS report, is that companies are introducing fewer blockbuster drugs; the newest entries are approved for narrower uses with fewer potential patients and weaker sales projections. The report doesn’t mention that consumers also appear to be fed up with incessant advertising for erectile dysfunction, sleep problems and overactive bladder, and might be tuning out many of these mass-market missives. Drug companies also are facing keener oversight from policy makers who question the educational benefit of some DTC advertising and are examining their roll in increasing health care costs.
So where do drug companies go next to market their drugs? It turns out that many companies are refocusing their marketing efforts on an old, familiar target—physicians and their prescription pads.
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