Where has all the Big Pharma marketing money gone? Emerging markets

The bad news is that drugmakers didn't increase their spending on marketing last year. The good news is that companies didn't cut that spending, either. According to a report from Cegedim Strategic Data, pharma companies spent just under $85 billion on their sales forces and various marketing channels in 2013, about equal to 2012 spending levels.

But more bad news: That overall spending tab disguises some declines at the world's biggest drugmakers. The top 10 multinational drugmakers all cut their investments in marketing last year.

The reasons for those cuts are well known by now: Patent-cliff losses are forcing cost cuts as drugmakers fight to maintain their profit margins. An industry shift toward specialty drugs means huge primary-care sales forces are no longer needed.

Christopher Wooden

Rules and enforcement are also affecting pharma marketing, Cegedim's Christopher Wooden said in a statement. "[R]egulatory scrutiny and clearer compliance guidelines are putting pressure on the use of traditional, personal promotional channels," Wooden said. Translation: The tried-and-true doc-detailing approach is withering.

The upshot of all this? "[F]ewer reps are needed," Wooden said. Indeed, Cegedim said last month that the pharma sales force in North America slid by 7.4% last year, and fell about the same amount in Europe, to 66,000 and 72,000, respectively.

Overall marketing shifts varied widely country-by-country. Pharma has been zeroing in on emerging markets, ramping up spending and recruiting thousands of reps there as the industry consolidates and cuts costs in mature markets. So, pharma's big hopes boosted marketing spending in the the usual suspects--China by 9%, Brazil by 11%, and Russia by 16%--but also in second-tier emerging markets like Mexico, where spending grew by 9%.

Offsetting all those increases were big cuts in some mature countries. Marketing investments in the U.K. slid by 13%, for instance. And in the U.S., where pharma's biggest marketing budgets live, spending took a 4% hit.

We'll leave you with a bright spot: Digital. E-detailing, emails, and e-meetings grew; together, spending on these channels jumped by 14% year-over-year to $1.9 billion. Even more impressive, in absolute terms, were the gains in spending on pharma websites, social media, banner advertising and mobile apps. Drugmakers plowed nearly $2.5 billion into these avenues, an increase of about 6%.

As Wooden suggests, the rise of digital may help offset the decline in face-to-face physician promos. "In absolute terms, digital marketing investment is still a relatively small portion of the mix," Wooden said. "However, we expect the use of these channels will only continue to advance as marketers seek to maintain reach through ease of access while delivering a high level of information quality to HCPs."

- see the release from Cegedim

Special Reports: Top 10 pharma companies in social media | Top 10 drugmakers in emerging markets