DTC spending continued its strong comeback in 2015, following a strong 2014. Spending was $5.17 billion in 2015 according to Nielsen, the best performance since 2007 when $5.33 billion was spent. Fueled by many new product launches, DTC advertisers spent heavily in 2015. Some of the biggest newer spenders were Xifaxan, Toujeo, Belsomra, Breo Ellipta, Harvoni, Trulicity, Jardiance, Namzaric, and Brilinta.
The new spenders are across a wide array of categories including irritable bowel, diabetes, insomnia, COPD, Hep C, Alzheimer’s, and blood thinners. Returning to the $5 billion level is a strong recovery from $3.47 billion in 2012. In 2013, the DTC recovery began with $3.8 billion followed by $4.53 billion in 2014 and $5.17 billion in 2015.
The recovery has been fueled by both new products and a realization by drug companies that DTC is essential to drug success. DTC has largely been used for large incidence categories like cholesterol, depression, and diabetes. What has been a new trend is use for more limited incidence diseases like advanced stage cancer, Hep C, binge eating, sleep disruption for the blind, and advanced heart failure.
Many drugs with high annual price tags have started to use DTC heavily. Provenge, Harvoni, and Opdivo are a few of the drugs, costing up to $100,000 a year, to begin using DTC in the past few years. DTC is now seen as a way to raise awareness of premium price drugs which are harder to get on formularies. Ads create demand and put pressure on insurers to cover those premium priced drugs.
DTC spending should continue to grow in 2016 but likely will slow its growth rate. It is entirely possible we will see the 2006 record of $5.4 billion eclipsed. This is welcome news to media companies who have counted on DTC as a key revenue contributor. With higher spending comes more criticism from the army of drug company bashers. Despite the constant criticism, drug companies are eager to advertise because DTC works in creating consumer awareness and eventual higher sales.
In 2012, some industry observers and a few pharma executives were saying DTC was dying. That pronouncement was obviously premature given spending increases in 2013, 2014, and 2015. We who work in DTC have to continue to defend the use of consumer advertising. Critics will try to take away the right to advertise and our industry must provide the positives of advertising to politicians, the media, regulators, and consumers. Clearly drug companies have shown the desire to allocate more resources to DTC and should continue to do so in 2016 and beyond.