Pharma advertising in 2018: TV, midterms and specialty drugs
Advertising spend is reaching record highs in the U.S., with the pharmaceutical industry being one of the largest contributors.
This year alone has seen Eli Lilly and Pfizer push out commercials for their breast cancer therapies, Regeneron Pharmaceuticals launch a direct-to-consumer campaign for its blockbuster eye treatment and a host of drug companies dive deeper into the world of virtual reality marketing.
The numbers behind those decisions are quite staggering. Just considering television, 187 commercials for about 70 prescription medications have collectively aired almost half a million times since the start of 2018. And to do that, drug companies shelled out $2.8 billion, according to marketing analytics provider iSpot.tv.
In a report issued last week, media advisory firm Magna Global explained that the healthy U.S. economy is partly to credit for the greater ad spending both in and outside pharma. "Consumer confidence is high, the stock market is high, median household income is up and personal consumption is up — people are out spending instead of saving," Michael Leszega, a manager of market intelligence at Magna, told BioPharma Dive in an interview.
The spending doesn't look poised to slow down either. Pharma, along with the finance and tech sectors, drove a 6% increase in U.S. ad spend during the first half of this year — a figure that Magna expects will grow to 6.9% before December closes out and reach $207 billion overall.
Pharma sticking with TV, mostly
The U.S. is one of only two countries that permit drugmakers to promote themselves and their products directly to consumers, and a favorite way to do that has been through TV.
"It is hard to talk about national television nowadays without pharma," Leszega said. "If you look at the day-part mixes, if you look at syndication or early morning or things like that, pharma now consists of at least a substantial minority of total advertising spend within those day parts."
Television checks many of the boxes for pharma marketers. It's engaging and it provides enough time to tell both the story behind a drug and the safety and efficacy information required by regulators. Like print media, TV has also proven effective in reaching the elderly, a population segment that often has greater therapeutic needs.
To that point, specialty drugmakers have poured money into TV advertising for cancer and immunology treatments.
There are some caveats, though.
"Brands that are targeting these older generations are sticking to traditional, broad-reach media," said Sharon Suchotliff of consultancy firm ZS Associates. "However, brands in HIV are focusing a larger percentage of their spend on digital."
In fact, market research conducted by ZS found 20% of the advertising spend on HIV drugs is heading to digital channels — a large chunk compared to other therapeutic areas.
Election not on the radar
Looking to the rest of 2018, the expectation is that pharma ad spending stays robust, though maybe not for the reasons people might think.
Drug pricing, for instance, has been a point of contention between industry and lawmakers. In one recent battle, several congressional leaders pushed for pharma companies to have to disclose drug prices in DTC ads — an idea that was met with strong opposition from the well-funded industry lobbying group PhRMA.
Against that backdrop, one theory has been that pharma might increase ad spend in conjunction with the midterm elections in November. Yet market research has largely shut that idea down.
In conversations with pharma clients that took place early this year, Leszega said that issues like the upcoming election, uncertainty around the Affordable Care Act and pushback on drug pricing weren't really top of mind — at least from a marketing perspective.
"They had the drugs that they want to market to consumers that they could raise through national television, and these political ramifications were not on the radar the last time we spoke," he said.
Suchotliff said she's heard similar sentiments. And on a larger scale, ZS has found little correlation between pharma ad spend and major events like elections or the Olympics.
Rather, she argued market dynamics such as major brands losing patent protection, innovative neurological treatments for illnesses like migraine and Parkinson's disease, and increased competition in the HIV and cancer markets could drive ad spending both this year and for years to come.
"I think we're entering a period of big shift," she said, "and it'll be really interesting to watch how loss of exclusivity plus these new types of brands and these novel therapies have an impact on DTC."
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