Donald Trump’s surprise presidential win has many industry executives taking a wait-and-see approach, including those in advertising. However, pharma company advertisers may not have as much to be wary about, according to industry executives interviewed by FiercePharma.
One key reason is the ongoing steady flow of FDA drug approvals, which means pharma companies will need to market and advertise at a similarly steady pace to get the word out about new drugs and indications.
“While pharmaceutical companies may have a wait-and-see approach in some areas, such as pending healthcare legislation, I just don’t see ad spending slowing,” Wendy Blackburn, executive VP at Intouch Solutions, told FiercePharma. On the contrary, "it’s likely safe to say the general consensus is that Trump’s election is a positive for this industry," she said, noting that "our clients’ product patent clocks are still ticking, and patients and professionals still need to know about treatment options.”
The larger advertising industry doesn't share that feeling, however. In a recent Wall Street Journal article, global CEO Kelly Clark of WPP’s GroupM, which is the largest ad buyer in the world, said he now expects a decline of a few percentage points in U.S. advertising spending over the next six months. The group had been predicting annual growth of 3% for 2017 to reach $184 billion.
John Kamp, executive director at the Coalition for Healthcare Communication, agreed with Blackburn that the pace of FDA approvals at current “optimum efficiency” should continue and keep ad spending levels stable. Kamp added that while Trump has talked about reforming the FDA, he doesn’t anticipate significant changes there.
Bob Ehrlich, chairman-CEO of DTC Perspectives, said via email, “The only thing that would negatively affect spending is if Trump had Medicare negotiate directly on lowering drug prices." And while Ehrlich believes that's "certainly possible," he also thinks Trump will sympathize with pharma's position on the matter, which is that "price controls hurt innovation." Ehrlich figures that Trump will also probably appoint a less regulatory-minded FDA head, which "should speed up drug approvals."
But Doug Weinbrenner, VP and engagement strategy director at Area 23, said via email that an FDA top leadership change could have other unwanted effects for pharma.
"Under (Commissioner Robert) Califf, the FDA has taken an increasingly more patient-centric posture, embracing real-world evidence in addition to quantitative evidence to make policy decisions. If there is a significant governing culture shift, and more specifically an FDA leadership change, there will probably be a parallel pharma industry shift becoming more insulated than ever," he said.
Another reason pharma likely won't be as affected as consumer marketing companies by the political change is that the industry is just less reactive in general.
As Weinbrenner noted, compared with the pharmaceutical industry, "most consumer goods industries operate at a more nimble, responsive and at times knee-jerk marketing pace. At times, the lack of ability to be agile—caused by both internal culture and external regulations—can be an Achilles' heel for pharma marketing. However, during times like national/federal political change, that pace can provide valuable resource continuity, especially for patient support programs and disease education efforts. Right or wrong, good or bad; pharma is mostly immune from political and policy shifts."
One issue still on the table, however, is the ad tax deduction question, with a tax bill likely from the majority Republican Congress and presidency.
“There will very likely be some kind of corporate tax change and the possibility of all advertising taxes no longer being deductible is alive and well,” Kamp said, adding that due to the Republican majority, “It’s frankly more likely that we’ll have a tax bill this year with Trump than we would have with Hillary Clinton.”
At least one industry executive is waiting to draw any conclusions, though. Lori Grant, president of Klick Health, explained that she doesn’t want to add to the speculation about what may happen under Trump until he takes office and begins to affect policy.
Grant said, “I think we have to take a little bit of a wait-and-see approach to what will happen because the policies and perspective are not really clear nor are they laid out. So it would be very dangerous to add to the speculation that’s already in the marketplace. … I’m not sure that’s helpful to anyone. I would want to see what the policies are and then comment accordingly.”