The latest from DTC Perspectives

The New Realities 2009

As we approach an election with a seemingly forgone conclusion of an Obama victory, it is time to take stock of some new realities. Some are good for our industry, others may be bad. They are realities, however, and we all need to deal with them.

First, Obama is probably no worse for pharmaceutical companies than McCain. Both blame big drug companies for high prices and reduced innovation. Both would try to significantly change the health insurance industry. In either case we should expect more price negotiation and re-importation.

On the positive side is Obama's commitment to prevention and earlier treatment. This means more drug therapy because more people will be diagnosed. Lower prices for existing me-too drugs means more incentive to find new innovative classes of drugs. While this is a more difficult challenge than producing me-too brands it is a good incentive to find winning compounds.

The second reality for us is that DTC will be more regulated. It will not be banned. It means more involvement of the FDA in deciding what is acceptable in terms of claims and risks. I expect mandatory pre-clearance to be part of new regulation which may be challenged by the advertising industry on First Amendment grounds. I expect more risks required to be disclosed and earlier in the broadcast ads.

The increased vigilance of the FDA may make it more appealing to use vehicles where adding information is cheap such as Internet, print, direct and point of care. It may make television ads more difficult to execute. A more risk laden television ad is going to require more creative expertise from agencies. I do expect television to remain more than 50% of a major brand's media plan.

The third reality is we have come to expect government help when things go bad. The stock market and Main Street problems have fostered an acceptance of government interference in the free market. It is only a matter of time before we have government single payer care. As I said last week we do have a health care bubble that will burst. That will lead to our electorate accepting European style care. The free marketers have lost. It may take another 10 years but expect it.

Is this a good time to be a drug marketer? Surprisingly, yes. Drug companies need expertise in marketing now more than ever. Consumers will demand, and rightfully so, that higher priced drugs show a reason to justify the branded price. That is a challenge for all DTC marketers. I know it may be depressing to see stock options worthless and layoffs affecting colleagues. It is likely that things will not get worse, but over the next few years get significantly better.