Sales and marketing

Schering CEO sees drag on Euro sales

Tracy Staton — Fri, 03 Oct 2008 10:43:50 -0400

For evidence that the economic squeeze isn't contained within U.S. borders, just listen to Schering-Plough CEO Fred Hassan (photo). With 70 percent of its sales derived internationally, Schering is sensitive to the market pressures in other countries--and Hassan says Europe is especially feeling the pain. And those governments are passing along that pain to pharma firms, he says.

"When governments come under stress... they really have to do drastic things," Hassan told the Wall Street Journal Health Blog. And because local docs and hospitals have political pull that multinational pharmas don't, "there's a tendency to squeeze drugs a little harder." In Italy, for instance, the economic troubles have slammed sales of the arthritis med Remicade, which Schering licenses from J&J outside the U.S.

The upshot? Europe's weakness may force Schering to cut growth projections for 2009 and even beyond, Hassan said. But emerging markets could help make up some of the difference.

- read the Health Blog post

U.S. drug spending tops the globe

Tracy Staton — Thu, 25 Sep 2008 10:36:43 -0400

Quick now: Which country's consumers spend the most money on prescription drugs? You got it. U.S. patients shelled out an average of $792 each for their meds in 2005, almost double the overall average among all industrialized countries.

That average was $401, a number that not only depends on drug prices, but on per capita consumption of them. So while France and Spain paid below-average prices, their drug spending came in at third and fourth place--with $515 and $509, respectively--because their citizens use more meds. And though the U.S. posted the highest per capita spending, the highest actual prices were found in Iceland and Switzerland, where the price tags beat the average by almost 50 percent.

The rest of the countries' rankings--and tons more data--can be found in a 200-page report, Pharmaceutical Pricing Policies in a Global Market, from the Organization for Economic Co-operation and Development (OECD).

Interestingly, it wasn't the countries with pricing regulation that boasted the lowest prices, OECD found. Some price regulators tend to balance cost concerns with public health policies and so forth, which can hold prices higher than in other places where the market sets the price. So, OECD concludes, there's room for governments to drive a harder bargain for the pharmaceuticals they regulate.

- read the OECD release
- see the article at Seeking Alpha

Big Pharma's Top 13 Advertising Budgets

Wed, 24 Sep 2008 08:54:03 -0400

By Maureen Martino and Tracy Staton

When it comes to the bottom line, marketing can be every bit as important as R&D. A company may develop a great drug, but that drug could become either a blockbuster with the right advertising approach--or wither from lack of marketing support. From TV and radio spots to newspaper and Internet ads, Big Pharma now has a variety of ways to let the public know about their latest and greatest drugs. The key to success is crafting a memorable and effective message, finding the right media outlet, and spending the appropriate amount of money to get results.

Below are thirteen Big Pharma companies ranked by their 2007 advertising budgets. These drugmakers made it into Advertising Age's 2008 list of 100 National Advertisers, and the Pharma Marketing Blog identified the thirteen drug companies on it, slicing and dicing some of the trends. The pharma numbers include spending on "measured media"--19 media types tracked by TNS Media Intelligence. The "unmeasured media" numbers are generated by Ad Age, and they include direct marketing, product placement, certain types of online spending, and more.

1. GlaxoSmithKline
2. Johnson & Johnson
3. Pfizer
4. Schering-Plough
5. Wyeth
6. Bayer
7. Bristol-Myers Squibb
8. Eli Lilly
9. Merck
10. AstraZeneca
11. Novartis
12. Boehringer Ingelheim
13. Sanofi-Aventis

We analyzed that data, plus company financial documents and press releases, past FiercePharma and FierceBiotech articles, and other media coverage. The result: A quick look at each of these companies' recent ad strategies--and the results they achieved.

One trend you'll notice is that several companies cut their ad budgets in 2007: GlaxoSmithKline, Merck, and AstraZeneca, to name a few. But for every Novartis (down 30 percent) there was an Eli Lilly (up 51.5 percent). And then came Boehringer Ingelheim, which boosted spending by a whopping 163 percent.

You'll also see that while all of the pharma sector focused the bulk of its "measured media" spending on magazines and television, online spending varied widely, from just $1 million (Reckitt Benckiser) to $49.2 million (Johnson & Johnson). But lurking in the "unmeasured media" numbers--which amounts to about half of pharma's total budget--is internet-search spending. And as John Mack at the Pharma Marketing Blog notes, some analysts peg those search buys at 40 percent of all drugmakers' ad money. So the low "measured" Internet numbers don't accurately reflect what Pharma is doing online (see the Pharma Marketing Blog for more).

For much more detail and number-crunching on these 13 companies (and the other 87 on Ad Age's list), check out this link. And for a regular look at pharma's marketing strategies, visit the Pharma Marketing Blog.

Boehringer Ingelheim - Top 13 Advertising Budgets

Tracy Staton — Tue, 23 Sep 2008 16:39:10 -0400

Company: Boehringer Ingelheim
2007 Ad Spending: $505.3 million
2006 Ad Spending: $191.8 million

Breakdown

Magazines: $63.4M
Newspaper: $900,000
Outdoor: $100,000
TV: $228.8M
Radio: $2.2M
Internet: $7.8M

Where Boehringer is spending money: As one of the few drugmakers to boost U.S. ad spending in 2007, Boehringer Ingelheim pumped up its budgets for several products. Its prostate drug Flomax got a 65 percent boost in spending to $87.3 million, and heartburn treatment Zantac saw a 29.9 percent hike to $41.9 million. But the biggest leaps came in spending on chronic obstructive pulmonary disease drug Spiriva and restless legs-slash-Parkinson's treatment Mirapex. Spending on Spiriva grew to $81 million from $22.9 million, and Mirapex got $60.9 million for its first big campaign.

Those big investments paid off: Spiriva "led the way" in boosting Boehringer's revenues, the company said in announcing its 2007 results. The COPD drug delivered a 35 percent boost in global sales to €1.8 billion. Mirapex sales grew 26 percent to 644 million euros. And Flomax posted a 19 percent rise to €1.02 billion.

Where Boehringer isn't spending money: Boehringer didn't push one of its biggest drugs via U.S. measured media: Micardis, a blood-pressure drug. The product nevertheless grew sales by 23 percent to $1.12 billion.

Eli Lilly - Top 13 Advertising Budgets

Tracy Staton — Tue, 23 Sep 2008 16:32:45 -0400

Company: Eli Lilly
2007 Ad Spending: $774.2 million
2006 Ad Spending: $511.1 million

Breakdown

Magazines: $47.2 million
Newspaper: $1 million
Outdoor: $100,000
TV: $291.2 million
Radio: $3.2 million
Internet: $5.7 million

Where Lilly is spending money: Eli Lilly pumped up its media push on its antidepressant Cymbalta by a decent 17.5 percent to $184 million. Percentage-wise, Byetta scored the biggest increase-to $31.7 million from $773,000. And while spending on Cialis grew to $126.5 million from $45 million, that boost came in part from Lilly's buyout of its partner on the drug.

Results? Well, industry watchers liked Lilly's "Depression Hurts" campaign for Cymbalta; Medical Marketing & Media deemed it the best overall consumer campaign. And Cymbalta sales growth reached a whopping 60 percent, giving Lilly a $2.1 billion infusion to the top line, $1.8 billion of that in the U.S. alone.

Meanwhile, Cialis chalked up a 20 percent hike in U.S. sales to $485 million. But the Byetta push was more successful, yielding a 48 percent boost in U.S. sales to $636 million; worldwide sales were slightly higher at $650 million. Lilly's share of that amounted to $330 million, because it sells the drug in partnership with Amylin Pharmaceuticals.

Where Lilly isn't spending money: Lilly backed off on advertising its number-one seller, the antipsychotic med Zyprexa. Concerns that the drug caused excessive weight gain in some patients-even leading to diabetes-were expected to depress sales. Plus, the company was fighting lawsuits from patients and state governments over its marketing of the drug. Lilly still managed to grow Zyprexa's U.S. revenue, though: the drug brought in $2.2 billion in the U.S., a 6 percent increase. The company offset falling demand by increasing prices.

Merck - Top 13 Advertising budgets.

Tracy Staton — Tue, 23 Sep 2008 16:27:51 -0400

Company: Merck
2007 Ad Spending: $751.8 million
2006 Ad Spending: $1.02 billion

Breakdown:

Magazines: $125.4 million
Newspaper: $13.6 million
Outdoor: N/A
TV: $212.2 million
Radio: $300,000
Internet: $24.5 million

Where Merck is spending money: The company slashed its ad spending by about $250 million in 2007. But it still managed to increase media support for the cholesterol drug Zetia to $105.9 million from $93.64 million, a 13 percent hike. The company's biggest ad push was for Gardasil, its vaccine for human papillomavirus, which causes cervical cancer and genital warts. Merck allocated $101.4 million to the shot, up 137 percent from the previous year's $42,740.

That's one reason Gardasil led a big increase in Merck's vaccine division's revenue. The HPV vaccine brought in $1.5 billion worldwide, up from $234.8 million in 2006, when the shot was first approved in the U.S.

Global sales of Zetia grew by 25 percent to $2.4 billion. But Merck doesn't get all that revenue; the drug is part of a joint venture with Schering-Plough, along with a sister product, Vytorin, that combines Zetia with the Merck statin Zocor. The entire Merck/Schering-Plough joint venture added $1.83 billion to Merck's revenues, according to financial statements.

Where Merck isn't spending money: Merck almost got out of the image-advertising business, slashing its corporate brand budget by 78 percent, from $172 million to $38.6 million. And the company cut back its spending on the allergy and asthma med Singulair by 27.5 percent, to $82 million. Osteoporosis treatment Fosamax also saw the knife, with a 49 percent cut to $32.7 million. Singular still managed $4.3 billion in global sales, up from $3.6 billion the previous year. Fosamax, on the other hand, saw its sales drop slightly to $3.05 billion.

Wyeth - Top 13 Ad Budgets

Maureen Martino — Tue, 23 Sep 2008 16:24:13 -0400

Company: Wyeth
2007 Ad Spending: $1.078 billion
2006 Ad Spending: $1.051 billion

Breakdown

Magazines: $94.7 million
Newspaper: $9.1 million
Outdoor: $400,000
TV: $296.4 million
Radio: $19.8 million
Internet: $14.7 million

Where Wyeth is spending money: While other companies spent big on direct to consumer advertising, Wyeth took the more indirect approach. The company spent $16.7 million promoting KnowMenopause.com, a website educating women about menopause and the company's HRT drug. It also shelled out $13.7 million on Yourtimeforchange.com, a website that discusses depression and treatment options (Yourtimforchange.com is no longer on the web).

Web aside, $59.6 million was spent on promoting Wyeth's biologic Enbrel, which treats rheumatoid arthritis, among other ailments. The most money by far ($114M) went to Advil advertising. Wyeth also boosted the vitamin brand Centrum's budget 44.5 percent. The biggest jump, however, was for the hormone replacement therapy Prempro, which saw a spending increase of 249 percent.

Where Wyeth isn't spending money: Enbrel advertising dropped 14.7 percent in 2007. Like many other drugmakers, Wyeth's image advertising dropped significantly, falling 63 percent.

Johnson & Johnson - Top 13 Ad Budgets

Maureen Martino — Tue, 23 Sep 2008 16:20:16 -0400

Company: Johnson & Johnson
2007 Ad Spending: $2.409 billion
2006 Ad Spending: $2.401 billion

Breakdown

Magazines: $ 402.1 million
Newspaper: $ 50.9 million
Outdoor: $ 4.8 million
TV: $ 879.4 million
Radio: $ 34.8 million
Internet: $ 49.2 million

Where J&J is spending money: J&J spent $50.2 million promoting its epilepsy drug Topamax. The drug--which was originally scheduled to go off-patent in September--won extended market exclusivity for one year based on a new pediatric indication for the med. The multi-purpose biologic Remicade saw $14.3 in advertising spending. Overall, J&J spent $49.2M on Internet advertising--far more than any other drug company.

Though J&J spent a substantial amount on prescription drugs, consumer product advertising was the name of the game in 2007. Neutrogena ($165 million), Tylenol ($152 million), Aveeno ($126 million), and Listerine ($111 million) made up the company's top four ad campaigns. J&J also spent $80 million on image advertising, though that was down from $100 million in 2006.

J&J boosted it's Internet advertising budget 41 percent in 2007 to 49.1 million. The company also embraced outdoor advertising--that budget increased 470 percent to $4.8 million. National radio spots were up 71.9 percent to 9.2 million. Overall, company sales rose 14.6 percent to $61 million.

Where J&J isn't spending money: None of J&J's top five ad campaigns included spending on prescription drug advertising. Remicade was the only prescription drug that had an increased budget in 2007 (there was no budget for the biologic in 2007). Topamax dropped 16.2 percent and Zyrtec dropped 17.8 percent. Newspaper advertising fell a whopping 98 percent to a paltry $149,000 from 7.4 million.

GlaxoSmithKline - Top 13 Ad Budgets

Maureen Martino — Tue, 23 Sep 2008 16:17:50 -0400

Company: GlaxoSmithKline
2007 Ad Spending: $2.457 billion
2006 Ad Spending: $2.505 billion

Breakdown

Magazines: $387 million
Newspaper: 13 million
Outdoor: $900,000
TV: $742.4 million
Radio: $14.2 million
Internet: $29.4 million

Where GSK is spending money: The biggest advertising price tag was attached to Advair, GSK's blockbuster asthma medication, which rung up $127M in advertising spending (photo). The company spent $107.8M on advertising for the osteoporosis med Boniva, which features celebrity spokesperson Sally Field (video). That's a 7.4 percent increase from 2006. Other big campaigns included Requip for restless leg syndrome and Parkinson's, Avodart for enlarged prostate and Valtrex for genital herpes.

On the consumer products side of things the company ramped up advertising for the OTC diet drug Alli to $90 million (the drug was not approved for OTC use in 2006). Spending on the Aquafresh brand soared 213 percent, from $19.4 million to $61 million.

Overall, GSK's sales grew 6.9 percent to $45.5 billion and earnings increased 5.6 percent to $10.6 billion.

Where GSK isn't spending money: GSK spent 1.9 percent less on advertising in 2007 than it did in 2006. And although Advair still topped the company's budget, spending on the drug dropped 34 percent, from $194 million to $127 million. The company significantally cut back on ad budgets for Imitrex (down 50 percent), Vesicare (down 42 percent) and Coreg (down 68 percent). GSK also cut its image advertising budget by almost 68 percent in 2007. Ad spending was cut in most media categories, with the exception of Spanish language media, radio spots and Internet advertising.

Bristol-Myers Squibb - Top 13 Ad Budgets

Maureen Martino — Tue, 23 Sep 2008 16:14:17 -0400

Company: Bristol-Myers Squibb
2007 Ad Spending: $796.3 million
2006 Ad Spending: $690.6 million

Breakdown

Magazines: $158.3 million
Newspaper: $6.8 million
Outdoor: $1 million
TV: $201.4 million
Radio: $200,000
Internet: $7.8 million

Where BMS is spending money: By far, BMS spent the most money on advertising Plavix ($174.8 million), the company's blockbuster anti-clotting drug, which was up 16.7 percent from 2007. Spending on company image advertising ($51M) and and the recently-approved rheumatoid arthritis drug Orencia ($35M) rounded out BMS's top campaigns.

The company focused on a key media area in 2007. Television ad spending was up in all categories: network TV (11.8 percent) spot TV (320 percent), syndicated TV (48 percent) and network TV (206 percent). In addition, B-to-B magazine ad spending was up 863 percent. BMS's ad budget grew 15.3 percent in total, and sales were up 12 percent to $19.3 billion.

Where BMS isn't spending money: The ad budget for psychiatric drug Abilify was down slightly from $101 million to $98 million. And the money that BMS dedicated to television commercials was taken from newspaper, radio and internet advertising budgets, all of which fell in 2007.