As the average age of U.S. consumers continues to increase, pharma companies are rolling out new drugs and therapeutic solutions. Jacob Bell, writing for Biopharmadive.com, reports that 70 drug companies have spent about $2.8 billion on advertising this year.
“As the nation’s health system continues to move from fee-for-service to a value-based model, community pharmacy will continue to move steadily from just a dispenser of prescriptions to more of a retail health care model, with a growing focus on pharmacy service and a growing reliance on the front-end of the store to drive profitability.”
Pharmaceutical firms and other healthcare vendors are often mentioned as rising stars for the ad industry. But are these marketers missing the digital media boat? New research from eMarketer shows that healthcare marketers are proceeding cautiously with their digital media outlay.
In a post last month, I mentioned that big drug companies have been cutting their direct-to-consumer (DTC) ad spending. In 2012, total spending was $3.4 billion which was a 14% drop from the previous year. Drug company executives say part of the decrease was the result of fewer big drugs entering the pipeline but the shift was also made because these marketers are realizing that the ‘easy’ DTC approach may not be the most effective in terms of increasing sales.
Large pharmaceutical firms pulled back on their DTC marketing last year, spending about $3.1 billion. This year, the biggest firms in this sector have told researchers that they intend to explore more multichannel marketing initiatives. In doing so, they will likely outsource a portion of this activity to agencies and services.
With $27 billion spent on promotions in 2012, the pharmaceutical industry is going strong. Spending remains steady for top categories. While direct-to-consumer (DTC) ad spending dropped last year, analysts are looking for an increase this year because a new category of drugs, SGLT-2 inhibitors, is expected to come into the market and it will require a heavy educational advertising component.
Earlier this year, PricewaterhouseCoopers predicted that increases in online ad spending would be driven by activity in the tech sector as well as retail. As we move through 2012, with online ad revenue growing a solid 14% over last year, pharma and healthcare appears to be the most active vertical. And, marketers preferences for specific formats show that we can expect more interest in performance-based pricing.
The direct-to-consumer marketing trend in the pharma industry is going strong. But TV advertising is an expensive proposition for many of the major companies who plan to introduce their latest products. A recently published article in Medical Marketing & Media indicates that pharma marketers are looking at some new options for their TV promotions.
When the economy began to climb out of recession, publishers of medical professional journals thought they were seeing a bit of a recovery. But since the start of this year, pharma companies have been pulling back on their print outlay. Some experts point to the lack of blockbuster drugs as the leading cause, but other industry watchers fear the long slow decline that has taken effect in most print sectors is occurring in the field of medical journals as well.
After spending over a decade on research and investing $1 billion to develop a successful prescription drug, some firms discover that they may have a second solid candidate to go to market for treatment of the same medical problem. This dilemma puts a marketer in the unenviable position of having to avoid product cannibalization, the erosion of the existing product’s sales. Some marketers have found that specific strategies will help prop up sales of an existing drug while they introduce the new one.
Pharmaceutical marketers acknowledge there are changes afoot regardless of the outcome of the current case before the Supreme Court regarding nationalized health care. The results of recent high-profile studies in this sector indicate that pharma companies intend to change who they are marketing to and how they carry out these programs on the professional advertising front.
Pharmaceutical companies have been stepping slowly and carefully into the world of online marketing. With their direct-to-consumer advertising efforts being closely monitored by the Food & Drug Administration (FDA), many pharma companies have been content to spend a large portion of their ad budgets on TV. But more consumers are looking online for prescription drug information which means that pharma companies need to improve the way they’ve been handling one of the most basic online marketing tools – search engine optimization (SEO).