Good News, Bad News

December 13, 2006
Pharmaceutical Executive

Volume 1, Issue 2

Studies show pharma has succeeded at raising disease awareness. Brand loyalty, though, has suffered.

Differentiation has long been a priority among pharmaceutical advertisers working in such heated blockbuster categories as sleep aids, statins, and allergy medications. But now, with new evidence showing that me-too advertising is creating more category demand than individual brand loyalty, marketers are trying even harder to break the mold.

"Increasingly, these drugs are in competition with each other," said Owen Shapiro, vice president at Leo J. Shapiro Associates, a market research firm. "There's an adage in consumer goods: 'It's almost more important to be different than better.'"

Takeda is one company that seems to have taken this adage to heart, creating a stir with its new commercials for insomnia drug Rozerem (ramelteon). Instead of blooming flowers and refreshed men and women contentedly stretching after a good night's rest, the ads feature Abraham Lincoln, a beaver, and an astronaut taking over some hapless fellow's kitchen--with the tagline, "Your dreams miss you."

Shapiro's latest study found that more than half of patients (54 percent) will initiate discussions with their doctors about specific drugs--yet surprisingly, they were more likely to ask about generic equivalents than the brand itself (48 percent versus 16 percent). Moreover, patients who ask for generic equivalents are more likely to request drugs "fairly often" than those who ask for branded drugs (70 percent versus 49 percent).

The numbers suggest that consumers are paying attention to pharmaceutical promotion, but they're also more sophisticated about issues like drug prices and bioequivalence.

The study is not the first to question the return on investment of direct-to-consumer advertising. In 2002, Dick Wittink, a professor of marketing and management at Yale University, found that DTC ads--because of their scattershot approach--provided the highest ROI for large brands that were recently launched. For smaller brands and those that were later in their lifecycle, medical journal advertising was the suggested approach.

More recently, 48 percent of drug marketers noted that difficulty measuring ROI from DTC campaigns was a significant concern in 2006--one of their top three, in fact, according to a study from the Medical Broadcasting Company.

Yet companies continue to spend heavily on DTC advertising: Between 2000 and 2005, spending grew 80 percent to reach $4.6 billion, according to Verispan.

Consumers are getting information about specific drugs (brand and generic) from their own independent research, particularly on the Internet. Yet pharma companies are just beginning to target this medium.

"The reality is: It's hit," said Mark Bard, president of Manhattan Research, of the trend toward online consumer health research. "This is the way people get information today."

Manhattan Research's latest consumer study found that 53 percent of adults use the Internet to find healthcare information. They're twice as likely to turn to the Web as to television, and twice as likely to be satisfied with what they find. "It's control," Bard said.

To draw consumers to brand Web sites, pharma companies need to think about tools such as search engine optimization, to make sure their sites are readily found by search engines like Yahoo and Google. In addition, once they find a site, consumers want to be able to communicate directly with the company (to request additional information, for instance)--something that 80 percent of pharma sites don't offer, according to Bard.

"Pharma for the most part, in terms of [consumer experience], is arguably behind most other industries," he said.