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e-Journal

 

Direct-to-Consumer Advertising of Pharmaceuticals
(Released March 2008)

 
  by Amy Shaw  

Review

Key Citations

Resources

Glossary

Editor
 
Trends in DTC Advertising Spending

Contents

An Astra-Zeneca advertisement for its cholesterol-fighting drug shows a trim woman jogging down a street. "She took medication. She ate right. And ran. Yet it wasn't enough." Her doctor advises her to switch to Crestor.

In 2004, Astra-Zeneca spent $216 million promoting Crestor, almost matching the $212 million spent on Pepsi for that year (Huh and Langteau, 2007). The greatest amount of advertising money spent on pharmaceuticals in 2005 was for 10 drugs in the following seven categories: 1) heartburn, 2) insomnia, 3) cholesterol, 4) asthma and allergy, 5) nail fungus, 6) blood clots and 7) erectile dysfunction (Heinrichs, 2007). According to the Government Accountability Office (GAO), DTC drugs are often among the best-selling drugs (United States, 2002).

Pharmaceutical companies spend nearly twice as much on marketing in the U.S. as they do on research and development (R&D) (Gagnon and Lexchin, 2008). There has been an upward and accelerating trend in spending on DTC advertising. In 2005, $4.2 billion was spent on DTC advertising (United States, 2006), compared with $1 billion in 1997 (Huh and Langteau, 2007). Yet drug companies spend more promoting prescription drugs to physicians, according to the GAO, $3 billion more than to consumers in 2005 (United States, 2006).

graph of spending going up
Spending on Direct-to-Consumer Advertising

Television advertising takes up the bulk of DTC pharmaceutical marketing expenditures, but drug marketers have increased their marketing efforts on the Internet (Sheehan, 2007) as searching for health-related information has become the third most common activity for online users (Choi and Lee, 2007). In 2003, the pharmaceutical industry spent $59 million on DTC promotion on the Internet (Choi and Lee, 2007). A Cegedim Dendrite Survey reveals that as pharmaceutical industries increase their presence on the Internet, spending on traditional mass marketing advertising-such as television, radio and direct mail-will decrease (DTC, 2007).

Advertising spending positively correlates with increases in the number of prescriptions written for DTC drugs (Spake and Joseph, 2007). A study reviewed by the GAO found a median increase in sales of more than $2 for every $1 spent on advertising (United States, 2006). Another study found that each dollar spent on advertising in 2000 generated additional sales of $4.20 (Henry J. Kaiser, 2003). In 2000, DTC advertising raised drug sales 12%, costing patients and insurers an additional $2.6 billion (Healy, 2007).

While the pharmaceutical industry is profiting from DTC advertising, it generates more money marketing to physicians. In 2005, compared with the $4.2 billion spent on DTC advertising, pharmaceutical companies spent $7.2 billion on promotion to physicians (United States, 2006). According to a 2001 study by Dartmouth College marketing professor Scott Neslin, every additional dollar spent on advertising in medical journals generated $5 worth of sales, and an extra dollar spent to sponsor continuing medical education and professional meetings yielded approximately $3.56 in sales (Healy, 2007). In addition, every dollar spent on physician-detailing generated sales worth approximately $1.72, except for the most aggressively marketed drugs, which generated sales of more than $10 (Healy, 2007).

Go To DTC Regulation

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