analyzing rOI's for rx drugs to increase revenues

Results show reallocating funds to advertising in medical publications can improve revenues and ROIs

Arthur M. Mahoney
Bay Head Consulting Group

Prescription pharmaceutical marketers have a number of promotional tactics available to help generate brand awareness and prescriptions. Four primary promotional tactics alone accounted for an estimated $11 billion in promotional expenditures during 2000. Detailing, or sales calls (excluding samples), accounted for $6 billion of that amount, $2.5 billion was spent on direct-to-consumer advertising, just over $0.5 billion was allocated to advertising in medical publications, and $1.9 billion was for physician meetings & events. Detailing expenditures and those for advertising in medical publications grew at an average annual growth rate of about 7 percent from 19952000, while expenditures for direct-to-consumer advertising and physician meetings and events increased 44 percent and 22 percent, respectively. These four tactics, plus other available promotional tactics, make developing the appropriate promotional mix a challenge.

A Wealth of Secondary Market Research Data Is Available to Pharmaceutical Marketers