US D-T-C Drug Ad Efficacy in Decline

20 October 2008

NEW YORK: A flurry of recent studies reveal that expenditure on advertising direct-to-consumer drugs within the US is in sharp decline – due, the reports suggest, to an accelerating reduction in return on investment.

Spending on Rx-listed medication (brand and generic drugs available via the internet) fell 3.9% to $2.4 billion (€1.78bn; £1.39bn) in the first six months of this year, according to TNS Media Intelligence. And data from Nielsen Monitor-Plus is even more pessimistic, estimating a 4.8%decline to $2.7 bn.

And rubbing salt into an open wound, a Harvard Medical School study has found that consumer ads have little effect on prescription drug sales.

While these are not good tidings for Big Pharma, they're even worse news for the beleaguered US media industry.

In a study published in September in the British Medical Journal, lead author Michael Law opines that direct-to-consumer ads "probably aren't as effective as widely perceived."

That perception bodes ill for the magazine, newspaper, radio and TV outlets that have benefited big-time from D-T-C ads.

As TNS svp of research Jon Swallen observes: "Throughout much of the early decade, [D-T-C spend] was growing at strong double-digit rates as pharmaceutical marketers become more comfortable and experienced with DTC advertising."

Now, however, the trend appears to be inexorably southbound, driven by fewer drug launches, fear of government regulation and draconian cuts by formerly high-spending brands.

No longer, it seems, is D-T-C drug advertising a bridge over troubled water. More a ropeway over the abyss.

Data sourced from USA Today; additional content by WARC staff