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How Will DTC Advertising Change in the New Millennium?

As we head into the new millennium, it’s fascinating to reflect on the evolution of direct-to-consumer advertising of prescription drugs.

DTC advertising began with nonbranded, help-seeking ads in the mid-1980s, to the branded print ads of the late 1980s, to the branded broadcast ads of the 1990s. So, where is DTC going in the new millennium?

While no one knows for sure how it will continue to evolve, the immediate answer was given in August with the release of the long-awaited, final FDA guidance regarding DTC advertising. Since the guidance was issued, expenditures have continued to rise as DTC is viewed by many companies as a key driver of total prescriptions.

The market research conducted during the past two years, including the FDA’s own study, has concluded that the overall effect of these communications is positive. Additionally, many manufacturers have conducted rigorous ROI analyses, which show positive financial benefit for some of the campaigns running during the past two years.

The next evolutionary stage in DTC advertising appears to be the increasing use of traditional direct response techniques in many of the ads that are currently running in print and broadcast media. These ads are relationship marketing-focused and take a significant step beyond standard awareness advertising.

Some marketers see capturing relevant patient data as critical. With this data, manufacturers are able to communicate with patients on an individual basis and build long-term loyalty via ongoing communications. Relationship marketing allows manufacturers to focus their efforts on the most receptive consumers.

Although relationship marketing is on the rise, most efforts are still acquisition-oriented – building awareness for a product with the hope that patients will go see their doctors and ask about the advertised product. Little or no attention is placed on retaining patients for as long as possible, which experts believe can be up to five times less expensive than acquisition initiatives. This approach, although appropriate in some circumstances, does not allow the marketer to communicate relevant information to patients on a one-to-one basis.

There also is a continuing debate concerning the most cost-effective or fertile therapeutic areas for DTC advertising. While some companies are seeing great ROI from their DTC efforts with certain products and some companies are not, there seems to be a consensus that all products are not suited for DTC advertising. Questions are still being raised regarding which of the following therapeutic areas are most appropriate for DTC initiatives: chronic symptomatic, chronic asymptomatic and acute lifestyle drugs such as Propecia and Viagra.

There are other outstanding questions, such as:

• What is the optimum balance between print and broadcast media?

• Is the major statement in broadcast ads frightening patients?

• Should nonbranded messages be interwoven with branded ads?

• What is the role of the Internet in DTC communications.

• How can e-pharmacies be used to reinforce compliance?

There are several emerging trends that will affect the way products are promoted to both physicians and consumers in the future. These trends will reinforce the need to build an ongoing relationship with patients to convince them to see their physicians and ask about the appropriateness of these products. Advertising in this category is unique because the target of the advertising is not the ultimate decision maker. Some of these new compounds are expensive new chemical entities, which, in some cases, are not in managed care preferred formularies and have several therapeutic alternatives. The challenge is, “How can manufacturers of these products convince patients that the incremental cost is worth it, especially when they do not feel the difference?”

Some of these trends include:

Patent expirations. About $35 million in brand sales is expected to come off patent between now and 2005. Many of these products have patent-protected dosage forms – such as sustained release or once-a-day formulations – but the innovator manufacturer’s challenge is to convince both physicians and consumers that the incremental cost is worth it.

Medicare drug benefit. If this comes to pass, Medicare recipients with limited incomes and multiple prescriptions will be making some difficult trade-off decisions regarding medications.

Rising co-pays. Co-pays continue to rise for innovator products, especially those that do not have preferred status. The low co-pays of generic alternatives will be quite tempting.

Pill splitting/self-imposed drug holidays. Patients will need to be educated regarding the dangers and pitfalls of these actions.

Industry consolidation/co-promotion agreements. There will be increasing confusion in the marketplace regarding who manufacturers specific products. Some experts argue that corporate branding will become increasingly more important as a result.

Noncompliance. Lack of adherence to the recommended dosage schedule presents a major problem for the industry and the healthcare system. Some patients are not taking the prescribed product as directed for as long as they’re supposed to take it. In fact, some patients never have their prescriptions filled.

As we prepare to welcome the 21st Century, all signs point to the continued growth of DTC spending and continued improvement in the creative product. Other trends to look for are infomercials, DTC e-mail, seminars for consumers on the Internet, cross-selling across product databases housed in corporate data warehouses, customer relationship management and more sophisticated compliance and loyalty programs.

With all the current products awaiting FDA approval and those in the clinical research stage, the future of medicine couldn’t be more exciting for both the healthcare industry and, ultimately, the patient. Most of these products appear to be major advances in drug therapy. An increased focus and investment in Genomics and personalized medicine also deserve close attention.

It’s a very exciting time in the history of medicine. Improved consumer communications can only help to raise awareness of specific medical conditions and prepare patients to have more meaningful and knowledgeable discussions with their physicians. This will result in better-educated patients who take their medications as directed and in the end, benefit the healthcare system at large.

Julian M. Parreño is vice president of marketing for pharmaceuticals at Harte-Hanks Direct Marketing, Shawnee, KS.

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