US drug makers cut adspend

20 April 2009

NORWALK, Connecticut: Drug manufacturers in the US decreased their spending on consumer advertising by 8% last year to $4.4 billion (€3.4bn; £3.0bn), the first such decline this decade, says IMS Health, the market research firm.

Drug makers consumer-focused advertising expenditure reached a record value of $4.8bn in 2007, compared with under $1bn in 1997, the year when the Food and Drug Administration relaxed restrictions on direct-to-consumer communications.

Their TV adspend fell by 4% in 2008, and print revenues were also down by 18% over the course of the year, according to estimates from IMS.

Reasons for this decline were said to include a lower number of new product launches, and a greater degree of governmental scrutiny of pharmaceutical marketing practice.

One example of this was Merck & Co and Schering-Plough's anti-cholesterol product Vytorin, adspend for which fell from $114m to $47m last year.

A study which found Vytorin was no more effective than some cheaper brands was mentioned in Congress, and Merck thus went on to argue that the reduction in marketing support was "appropriate in light of the news coverage".

The Takeda Pharmaceutical Company also cut adspend for its sleeping aid Rozerem by around 90% to $14 million, although Pfizer almost doubled its outlay for Viagra to $121 million.

Direct-to-consumer ads typically take around a 40% share of drug manufacturers' ad revenues, with the rest normally being aimed at medical professionals.

Data sourced from Wall Street Journal; additional content by WARC staff