The latest from DTC Perspectives

Growth in New Categories

While the traditional definition of DTC advertising is for pills, inhalers, devices and injections to treat medical condition or illness; the growth drivers may come from other DTC categories. One of the major growth areas will be in aesthetic products. A new report from Global Markets Direct predicts solid annual growth from cosmetic procedures forecast at 6.5% per year through 2016.

Obviously, this category thrives on DTC advertising because demand creation is critical for an elective treatment not covered by insurance. Our aging population seems to demand perfection. Look at the shows from the Real Housewives series as examples of a society driven to look good. Most of the women profiled are proud to talk about their numerous enhancements. Men are also increasingly using Botox and getting facelifts and hair transplants.

What is interesting is that there is a huge potential international market long term as developing countries will increasingly be able to have enough discretionary income to support enhancements. Currently 60% of cosmetic enhancements come from the United States. That means long term opportunity in the emerging middle class markets. I am sure Real Housewives of Beijing will want to emulate Orange County in breast size and smooth skin.

Another potential boom category for DTC is preventive testing. Early diagnoses and treatment will grow as government puts more effort into cost effective treatments at early stages of disease. This means genetic testing companies will see a boom in sales as they get better at identifying subsets of the population that will benefit most from Rx and medical device treatments.

I still see a healthy DTC market for traditional pills for existing categories. Our society is still getting fatter and more prone to diabetes, high blood pressure, heart disease, impotence and other diseases. Major drug companies will see price pressure from government and other payers. Therefore market expansion will be crucial to success and DTC is great at creating awareness. More users, even at lower prices, will keep drug company profits strong and society will be healthier.

So whether in traditional DTC categories or new or expanding ones, it is highly likely DTC advertising will grow significantly over this decade. It is also likely other countries will be more liberal in allowing health ads from drug companies, although in the disease prevention and treatment area, not in branded ads.