Specialty drugs will continue to push DTC ad spending as pharma clings to its ways

Drug makers are continuing to spend big money on DTC advertising even as the drugs they make have smaller patient populations.

Drugmakers' shift away from producing big blockbusters to developing specialty meds is set to continue next year, but that doesn't mean pharma companies will quit shelling out mass-market DTC dollars. They'll likely continue spending big money on DTC advertising, even as they put forth drugs for smaller patient populations. 

Conventional thinking says that fewer mainstream drugs should require less mass-market advertising, but that's not the case with pharma. Pharma ad spending reached an all-time record high of $5.4 billion this year, and industry prognosticators say future totals may go even higher.

Some of the phenomenon for next year will be about building brand awareness. As many unknown drugs come to market, even those with smaller, more specific audiences, the companies still need to draw physician and consumer attention.

The upward spiral in spending will continue to reflect the anxiety of manufacturers trying to get in front of doctors, with sales reps increasingly shut out of in-person visits with HCPs. And using DTC to allay their anxiety, in turn, reflects a bigger—and growing—problem in the industry: the unwillingness to overhaul traditional old-school marketing thinking inside pharma companies.

TV and print have always been major mass-media vehicles for pharma companies, and even though more launches are specialty drugs serving smaller populations, the go-to-market strategies stubbornly remain the same.

Part of the issue is that mass-media TV works. Even if expensive specialty drugs win only a modest number of new patients via ad campaigns, those few can make costly DTC efforts worthwhile, the Wall Street Journal has reported. The tactic can also successfully pressure insurers to cover a drug, according to the newspaper.

Consider TV ad spending on psoriasis drugs. About 7.5 million people in the U.S. have the condition, according to the American Academy of Dermatology. In the past year, five psoriasis drugmakers—Novartis, which makes Cosentyx; Taltz manufacturer Eli Lilly; Stelara maker Johnson & Johnson; Otezla producer Celgene; and AbbVie, owner of world sales leader Humira—spent $208 million on national TV ad spending alone, according to data from realtime TV tracker iSpot.tv. That’s almost $28 per person with the disease.

Bristol Myers-Squibb spent $77 million on national TV ads for cancer med Opdivo in the same time frame, Oct. 2015 through Oct. 2016, focusing on the drug's lung-cancer approval, according to iSpot. Fewer than half a million people (430,000) in the U.S. alive today have been diagnosed with lung cancer, according to the American Cancer Society. Back-of-the napkin math puts that at more than $179 per person with the disease.

But while it's certainly not true of all pharma companies and all drugs, it’s hard to deny the overall entrenched resistance to the digital and social marketing tools that many non-pharma marketers have already embraced as a growing and expensive problem.

Could 2017 wind up being a year of change? Company by company and drug by drug, new product launch teams will move more of their budgets to digital and social marketing. However, the change is likely to continue to occur at a glacial pace.

So expect more cancer, depression, Alzheimer’s disease, and, yes—even more erectile dysfunction TV ads for everyone's nightly viewing this coming year. This is one trend that’s just not going away anytime soon.