DTC is almost always used for awareness building. Pfizer is now using it to maintain current users on Lipitor. A radio spot explicitly fights back against plans trying to switch patients on Lipitor to generic statins. I admire Pfizer’s fighting spirit. They say that if you are doing well on Lipitor there is no generic equivalent.  There is tremendous pressure from plans to switch patients to generic  Zocor or Pravachol. Lipitor only has two years left on its patent and will fight to keep sales until the last day.

There are those who argue DTC has no place in medical decisions. Better, the critics say, to leave the decision entirely to doctors. If they were the only ones making decisions then I would agree. The reality in American medicine is different. Managed care and PBM’s get paid to reduce cost. They pressure doctors to prescribe cheaper drugs. Employers pressure their plan administrators to lower drug bills. Government pressures doctors to reduce Rx costs. So, is your doctor always doing what is best for you?

DTC is one of many subjective sources of information. It is biased because it is promoting a particular brand as does all advertising. DTC, however, is needed to balance the “cheaper is better” mantra from insurance companies. Doctors are caught in the middle.  Consumers want the latest, and often more expensive drugs. In some cases the new branded drugs are no better than generics or OTC alternatives. In other cases they are better. Pfizer’s retention ad is a way to balance the generic advocates.

Consumers have a right to know whether they are being cajoled to switch drugs for price reasons. As I said before, there is nothing wrong with hearing about alternative therapies that may be cheaper for patients and plans. Drug reactions and benefits are sometimes quirky so it is a big deal to switch a patient doing well on a drug to another so-called equivalent. Pfizer has every right to use DTC to alert patients to the practice of switching for cost savings that save plans money and their new spot is a good investment.

DTC spending for full year 2008 is now officially in the books. Nielsen says down 18% from $5.3 billion in 2007 to $4.3 in 2008. It is a disappointing but not an unexpected result. Need we remind ourselves that the economy imploded 4Q and spending reflects that situation. I assume some of the decline was because of cuts in media rates which allowed more GRP’s for less dollars. The actual GRP number is probably down only single digits.

The key issue is what will happen in 2009 and 2010. I assume we will see a flattening of spending declines in 2009 and my guess is down around 7% for 2009 and probably up modestly in 2010 as we see a general recovery. I get the sense we are nearing the end of the crisis so we could see strong demand for media in 2010. In the drug world, media buys will be influenced by DTC regulations and national health policies. I assume, however, that DTC will be fine, despite a lot of bluster to end or heavily control it.

There are some interesting findings in the 2008 numbers. For the pundits who annually predict the end of network television you are wrong again. Nielsen says network spending did not decline at all. What we see is that brands are maintaining network television while cutting in cable, magazines, magazine Sunday supplements, and some specialty media. Magazines were down 19%, supplements 37%, and outdoor down 26%.Another casualty of the economy was Hispanic media down 83%. Nielsen does not measure Internet or Point-of-care. My guess is Point-of-care is doing all right because of its general excellent ROI. Internet, a small part of the usual DTC budget is probably seeing declines because of its susceptibility to being victims of budget cuts.

I am sure we will have a spirited debate at the next DTC National on mass versus targeted. Of course the real debate is over allocation between the two, not in choosing one over the other. I do know that the annual call for the funeral of mass media is continually wrong. I also know that targeted opportunities must be continued for that is the eventual future of media. The critics of mass media will say pharma just does not get it and question the competence of drug marketers. They will insult the skills of marketers but they need to persuade not attack. I am only interested in what works so everyone needs to bring their facts not their emotions to the debate.

We will return to DTC growth by 2010 but in the meantime we need to do more with less. I think the clouds are beginning to part and the sun is starting to peek through. At least for this week I can smile a bit despite the 18% decline.

Ad Age recently ran a story on the growth in sleep aids despite cuts in DTC spending. Jim Edwards wrote a provocative blog on March 5 in BNET that questions the basic assumption that DTC works. Edwards uses the facts that sleep aids are up significantly to say “this data strongly suggests that patient demand is most sharply triggered by drug efficacy, not by pretty pictures flickering in a fluorescent tube.”

Jim Edwards is half right. DTC is not the driver of sales and drug success is triggered by efficacy and need, not DTC. The fact that sleep aid sales are up without significant DTC spending is not an indication of a failure of DTC. Many categories do fine without DTC and some do better when DTC is added. Edwards may be right that DTC may make no difference in certain circumstances.

I have always said DTC is the tail of marketing not the dog. If one examines blockbuster drugs, it is apparent that a $100 million of DTC may get you $200 million of incremental sales. That $200 million is a small part of blockbuster sales, generally over $2 billion these days.  I have pointed out in the past that Lipitor was a 30 share before DTC was used. DTC grew Lipitor sales and provided a nice ROI but it did not drive sales.

The Ad Age report does not prove anything about the effects of DTC. There are many reasons why sleep aid sales are up. The biggest may be fear and anxiety over the massive recession or depression we are facing. Whatever the reason, it is incorrect to tie DTC effectiveness statements to the story.

DTC success is evaluated by controlling for sales without DTC. The methods to see the additive effect of DTC are varied and complex but never are they as simplistic as looking at total spending and total sales correlations. I would trust the hundreds of DTC ROI brand cases reported by several reputable market research houses over the raw number correlation in this story. DTC works in most cases, but not all cases. In some instances DTC produces a negative return.

DTC is not going to be questioned by the industry based on sleep aid sales increases with less DTC. DTC is always under the microscope every budget period. Brand managers are annually proving it works in their budget presentations. If ROI is less than alternatives DTC deserves to be cut. Edwards’s story is provocative and does raise legitimate questions but there are many good studies to say DTC makes sense. I am sure the anti-DTC bloggers will try to make the sleep aid story a big deal but DTC will be evaluated objectively at big pharma.

Drug companies have publicly opposed re-importation from Europe and Canada on safety grounds. Their other fear, safety aside, is allowing Americans access to the same drugs at 30-50% off. The re-importation debate has gone on for years. Now, it looks like Congress will approve such a bill. A bi-partisan bill sponsored by Senators McCain, Snowe and Dorgan was introduced this week.

The drug lobby led by PhRMA issued its expected concerns on such a bill on safety grounds. They also said the drug companies have other ways to help people pay less if they cannot afford their drugs. The reality is that this bill has enormous support in both houses and Obama wants it. It is unlikely the many drug lobbyists can stop this bill.

Senator Grassley, a Republican, said “In the United States, we import everything consumers want, so why not pharmaceuticals?” That is the general sentiment of consumers as well. No one wants to pay more than their European or Canadian counterparts pay for the same thing. What Grassley forgets to say is that the reason prices are low in other countries is government price controls, not free market competition.  The idea, then, is we can tell Americans they are getting cheaper prices through free trade when in fact it is price controls.

We also should tell Americans they risk innovation in drugs. If drug companies lost more revenue and profits where is the research budget to originate? The Senators should check the stock prices of major drug companies to see these so-called fat cats are hurting. If Congress wants to destroy an industry America needs desperately, they are starting the process with this bill.

The drug industry will probably fight re-importation by producing just enough to supply those cheaper priced markets. Therefore any re-importation will mean shortages in the home markets. Then the foreign governments may ban exports to the United States. That may cause the United States to impose price controls directly.

There is also a legitimate safety issue. While the bill calls for safety monitoring, we all know that criminals can outsmart the government.  The Chinese are great at copying European packaging. That German Lipitor may actually be made in Shanghai and contain harmful additives.

This bill is short-sighted. We need a strong domestic drug industry. It is one of the few we have left. Our new government mantra seems to be to punish business. I would much rather see government and the drug industry agree on a program to expand utilization of price support programs for low and moderate income Americans. This would lower prices to perhaps less than European prices for the low income consumers while allowing higher prices for more affluent consumers.

The risk of this bill is it creates an atmosphere where drug companies are the bad guys. Americans need to understand that forcing price reductions does in fact reduce research and innovation. I fear we will force drug companies to move their research bases to China and India. Is that what we want? Congress is doing something that will be enormously popular with their constituents but is plain counter-productive long term.