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December 2001
Vol. 4, No. 12, pp 41–42.
money matters: corporate
Have I got a drug for you!
Pharmaceutical firms have doubled direct-to-consumer marketing budgets since 1997.

opening artEarlier this year, the drug firm AstraZeneca assembled a team of 2700 sales representatives and sent them on a promotional blitz for “the purple pill”. What’s the purple pill do? Don’t look to the company’s commercials for an answer, as the ad dialogue is steeped in mystery and intrigue: Radio spots feature a pleasant female voice, cooing, “I didn’t know there was a new purple pill until I asked my doctor.” In the final pitch, a male voice boldly proclaims, “It’s new, it’s purple, and maybe you need to know about it!”

It turns out the purple pill is Nexium: a forward-sounding combination of “next” and “millennium”. It is intended to relieve heartburn, and AstraZeneca executives, quite possibly, are also self-administering it: The cost for marketing the drug currently exceeds $500 million—a figure some analysts predict will eventually reach $1 billion. Thus, if Nexium fails, it could take AstraZeneca down with it.

A marketing boom
The marketing strategy for Nexium typifies a new era for the pharmaceutical industry: In addition to merely targeting prescribers, drug companies are taking their message to the street and focusing their efforts on the consumer. The Washington, DC-based National Institute for Health Care Management (NICHM), a nonprofit group, reports that the industry spent $2.5 billion solely on direct-to-consumer advertising in 2000 (the latest year for which figures are available), an increase of 60% over 1999 and more than double the amount spent in 1997—the year the FDA began allowing the industry to advertise on the airwaves without having to mention all side effects.

The FDA’s relaxed advertising standards coincided auspiciously with the start of a worrisome industry trend: The number of new drugs released to the market annually is falling steadily, from a high of 53 in 1996 to only 38 in 2000. Attributed by experts to a slower, more cautious FDA approval process, the decline in new drugs has stung the industry and forced it to expand markets for approved products. Meanwhile, competition in allergy, heartburn, skin disorder, and other heavily advertised categories is steadily growing and pressuring drug companies to increase product visibility. “A lot of the drugs on the market these days are comparable to one another,” says Thani Jambulingam, assistant professor of pharmaceutical marketing at St. Joseph’s University in Philadelphia, PA. “With so many similar products, it’s imperative that a drug stand out in the crowd.”

The marketing effort seems to be paying off. According to the NICHM’s director of research, Stephen Findlay, the 50 most heavily advertised drugs in 2000 showed a 32% increase in sales, compared with 14% for all other drugs. Consider the marketing effect on just one drug: Sales of Vioxx, an antiarthritis treatment produced by Merck & Co., rose from $330 million in 1999 (the year it was released) to $1.5 billion in 2000. In launching Nexium, AstraZeneca hopes to retain the vast market share of its predecessor Prilosec, which had retail sales of $4.1 billion in 2000 but is currently threatened by a looming patent expiration and subsequent generic competition.

Appearance counts
Experts say that an ordinary, round white pill will not survive in such a fiercely competitive environment. Unique colors and shapes can serve a practical purpose, such as helping older patients on multiple medications to distinguish one pill from another. But appearance can also influence consumer preference. For this reason, drug companies probe the consumer’s subconscious mind when they select a drug’s appearance. Glossy, two-tone capsules, for example, have a sophisticated look thought to appeal to younger buyers. Color is particularly important: Blue is masculine (Viagra is blue), red is bold and stimulating, pink is feminine, and AstraZeneca representatives describe purple as an “attractive yet dignified” shade. Prilosec was also heavily marketed as the “purple pill”, which explains why the Nexium ad campaign had such a mysterious emphasis on color. The intent in this case is to bridge consumer loyalty to the new brand in the event that Prilosec falters in the market.

Celebrity endorsements are also on the rise. Consider the odd spectacle of ex-presidential candidate Bob Dole—apparently a model of the successful, older male—hawking Viagra as a treatment for erectile dysfunction. Using celebrities to sell products is not unusual, but in a recent, somewhat controversial trend, drug companies have begun paying them to talk to reporters about their struggles with various illnesses and the drugs they use for treatment. For example, Bruce Jenner and Dorothy Hamill were paid by Merck to give interviews about arthritis while making passing references to their own treatments with Vioxx. Unlike traditional advertisements, these marketing campaigns are pitched as news stories—often with little indication that celebrities are being paid for their efforts.

Mounting concerns
While direct-to-consumer advertising clearly benefits the industry, some stakeholders find the trend worrisome. The ads are so short—generally no more than 30 seconds—that important treatment information is omitted by necessity. The task of explaining the details falls to doctors, and, not surprisingly, many in the medical profession resent the intrusion. “All the direct-to-consumer ads I’ve seen leave patients with false expectations of what a drug can or cannot do,” said J. Edward Hill, M.D., chair-elect of the board of trustees at the American Medical Association. “We spend a lot of time explaining to our patients why a particular advertised drug may not be appropriate for their condition.”

The FDA is busy monitoring direct-to-consumer drug ads for misleading information, although Nancy Ostrove, deputy director of the agency’s Division of Drug Marketing, Advertising, and Communications (DDMAC) downplays the notion that FDA actions against these kinds of overzealous marketing campaigns are on the rise. Since 1997, the agency has issued 30 Notice of Violation letters to drug companies because their advertisements either overstated a product’s efficacy, inappropriately expanded the approved indication for treatment, or minimized product risks. Several more serious warning letters, which request remedial campaigns to correct false public impressions, have also been issued.

A number of doctors say that direct-to-consumer ads serve the public by creating awareness about underdiagnosed illnesses such as depression and high blood pressure. Richard Dolinar, an endocrinologist in Phoenix, AZ, says, “Direct-to-consumer advertising of prescription medicines is getting patients into my office sooner, so they can be treated with effective medicines and avoid the complications of this [underdiagnosed] disease.”

Studies conducted by the DDMAC appear to support Dolinar’s anecdotal findings. A significant number of adults in the United States queried in a recent survey admitted to asking their doctor about a medical condition that they had first heard of in a direct-to-consumer ad. Most respondents said that doctors replied positively to advertising-induced questions and took the time to explain whether a requested drug might be an appropriate remedy. But those surveyed also said that less expensive alternatives were often recommended.

The issue of cost—and how much of the marketing budget is passed on to the consumer as higher drug prices—has emerged as a major concern. On July 24, 2001, Senator Byron L. Dorgan (D-ND) chaired a Commerce Consumer Affairs Subcommittee hearing on the issue, although conclusions resulting from the congressional testimony have yet to be released. In a press statement issued the day of the hearing, however, Senator Dorgan noted that prescription drug spending had gone up 19% in the preceding two years. This caused him to question how advertising costs were affecting the drug prices that consumers ultimately pay.

The answer to this critical question is elusive, largely because of a lack of data. For example, no one is sure how big the total industry marketing tab is. Jon Schommer, a professor at the University of Minnesota College of Pharmacy, describes the task of identifying marketing expenses as “an accounting nightmare”. “Oftentimes, what’s included as marketing in an annual report will include overhead costs like administration, legal, and finance,” he says. Industry analysts also point out that approximately half of marketing expenses comprise free prescription drug samples dispensed to physicians and clinics. Jambulingam says that free samples are often handed out to needy patients through a variety of assistance programs.

Ultimately, the influence of marketing on increased consumer drug spending hinges on the extent to which advertising correlates with unnecessary or inappropriate prescriptions.

The FDA’s Ostrove says that the agency is currently investigating the issue. “We don’t really know whether advertising has increased the number of inappropriate prescriptions,” she says. “We’re evaluating the issue, both by looking at the available evidence in the public domain and by conducting our own surveys as well.”

If the correlation is minimal, direct-to-consumer advertising could be helping to create a healthier population without unacceptable cost burdens. If the opposite is true, Findlay says, “We may have to conclude we have a problem.”

Charles W. Schmidt is a freelance writer based in Portland, ME. Send your comments or questions regarding this article to mdd@acs.org or the Editorial Office by fax at 202-776-8166 or by post at 1155 16th Street, NW; Washington, DC 20036.

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