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There are no doubt some very expensive prescription drugs that have industry critics upset. Gilead has launched a hep C cure with pills costing one thousand dollars a pill for a three month daily treatment. Some cancer drugs cost $100,000 or more that extend life by a few months.

Critics are pushing for government action to dig into why these drugs are so expensive. The drug industry says these prices reflect the high cost of development, including the many drugs that fail to make it past the clinical phase. The cost to get to a successful FDA approved drug can cost billions. Critics say consumers should be able to see the costs of development and marketing.

Several states have introduced legislation to require such disclosure. The idea is to make public the real cost of development and marketing. I assume the goal here is to outrage the public if those costs are low and the price to the public is high.

The issues on pricing are complex. Drug companies need to make lots of money on their success to fund the much higher number that fail. The public needs to be able to have access to these expensive drugs. Insurance companies feel enormous pressure to cover these expensive drugs. The solution may be to better understand the development costs of the high priced drugs. Obviously the drug maker wants to charge the highest price it can and optimize its profits. Is there such thing as a fair profit margin? Should drug companies be told what that level should be?

One has to think that Gilead spent years finding a cure for the horrible disease that is Hep C. They should be greatly rewarded for that breakthrough. We want drug companies to look for quantum leaps in treatments and society needs to reward such innovation. Critics say that me-too branded drugs waste R&D resources. So when a drug company goes for breakthrough drugs, these same critics say the price is unfair.

I do not know what is a fair price for a cancer, HIV, or hep C drug. Is it what the market will bear or some government formula for what they think is a fair return? Other countries use the latter approach. The question is without a market like the U.S. with free market pricing, will those drugs ever be developed?

This is the age old question of why Americans are subsidizing drug development for other markets. The drug industry does need to justify its prices but not through legislation on its cost structure. The insurance companies and drug competitors are the best chances of keeping prices lower. Insurers will evaluate the cost of the drug versus other treatments or versus the cost of non-treatment hospitalizations. A drug that commands a high price provides incentives to competitors to enter. Over time that $1000 a pill will drop to $100.

Do we want to allow drug companies to hit home runs with breakthrough drugs? I think the public wants them working on R&D programs to stop pandemics and cure cancer. While a thousand per pill may seem obscene, what is more obscene is not giving drug companies the financial incentive to succeed on their high risk research programs.

I kid you not. Kim Kardashian is the subject of an FDA warning letter to a drug company. OMG, and LOL! WTF! Kim decided to post on Instagram how great this morning sickness pill worked. It is called Diclegis from Duchesnay. Kim is paid to promote the drug but is not quite up to speed on fair balance requirements.

Kim, inexplicably to this old writer, has over 42 million followers. I am embarrassed to say I can name all the Kardashians and watched the first episode of Cait. So their spell has power over all of us.

The FDA does not like a celebrity paid by the drug company touting a brand’s benefits without discussing risks and side effects. Kim neglected to mention those in her glowing post and thus FDA, who is likely filled with Kardashian fans, caught wind of it. In what must be their most bizarre warning letter, they told the powers at Duchesnay that even Kim must have boundaries. Americans depend on Kim for advice on many matters. A person with such gravitas is expected to tell American women all the risks and side effects when she discuses a morning sickness pill.

So Kim may be expected to do a corrective post. She most likely will have to hold the risks page up for a selfie. Kanye may have to write a rap song with the most common side effects. Who knows what FDA will require to undo the damage Kim has done.

This is not the first celebrity to violate fair balance rules. It might be the first doing it on Twitter and Instagram. What it should teach drug companies is that celebrities may not be the easiest folks to train to stick to FDA regulations. Paying Kim to promote a drug has more risks than paying her to appear at a night club.

Of course the irony here is that FDA, by making a stink out of this, has had Kim’s errant post appear in every news feed this week from every major media outlet. I was interviewed by the Washington Post yesterday on this subject. I am not saying the warning letter was wrong, just that when it involves a Kardashian it gets airtime. So the drug maker gets massive publicity on the brand. I never heard of the drug until I saw the story.

FDA should recognize that social media is very hard to regulate. Their glacial response to the existence of new media has created a problem. While they should expect consumers to receive fair balance they cannot really demand the same level of detail as in print. If they overly restrict communication they prevent consumers from getting good information. I know they will try to be restrictive but they need to adapt their regulations to new realities.

Yes, Kim messed up and so did the drug company. But let’s be candid here. If Kim had added all the fair balance as required would it make any difference to her audience? Would they read past her first line? Maybe in these type of social media promos FDA should require a one line catchall warning that says all drugs have side effects and risks and a link can take the reader to those. That might get more attention than a litany of risks no one would read.

Our colleague Marker Weigand passed away last week. Marker was a DTC colleague at Amgen who was stricken with ALS. He will be remembered by all who knew him as a wonderful person and loving family man. I am always shocked when someone so young passes prematurely. I knew Marker as a Facebook friend and as a DTC colleague. I used to see him regularly at the DTC National along with many other friends from Amgen.

His passing reminds me of how important our role is in developing cures for these horrible diseases. We usually see these diseases from afar and when a friend gets a rare life ending disease it hits hard. I remember Marker as one of the nicest people I met through my DTC experience. We honored Marker in 2010 as a top 25 DTC marketer. He was a well recognized industry leader.

When someone like Marker dies it reinforces the belief that what we all do is so important. We are part of an industry that is trying to cure disease made up of dedicated people just like Marker. His passing should remind us all that our role is not about market share but about saving lives. We sometimes get caught up in business metrics that are really not all that important. I am shocked and saddened that a young man like Marker was a victim of an insidious affliction like ALS.

I was not aware of Marker’s struggle until I was notified of his death this week. I am honored to have known him. His passing certainly gives me perspective on what is important in life. To my Amgen friends I express my condolences and will always have fond memories of Marker.
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The FDA is interested in researching how drug ads are perceived when viewed alone versus with a spouse. They feel that when viewed with a spouse, drug benefit and risk may be interpreted differently. I think the study could yield interesting information. Does viewing with another person cause different benefit/risk takeaways? The FDA has a comment period ending 6/25/15.

Of course, the question is how FDA would regulate differently based on what is found. If viewing together causes increased risk concern, what changes would FDA make? The same goes for benefits. One would assume that two people viewing might remember more of the risk discussion since that is generally more complex than benefits. On the other hand, how would that change what is mandated by FDA?

Since FDA cannot regulate who watches an ad and with whom they watch, then how actionable is the data collected? Assuming joint viewing changes the perception, so what? My guess is that viewing with a spouse changes perception differently by drug category. A man with ED watching with his wife is probably going to have different results than for an allergy drug.

I think drug companies themselves are very interested in spousal influence on drug awareness and doctor inquiries. Clearly drug companies know spouses impact these decisions and create ads that mirror real life spousal discussions. Many DTC ads use husband and wife discussion to advertise drugs.

I am unclear what FDA will do with the results. I put this study in the nice to know category but far less important than risk communication studies they are also doing. We can assume that ads are viewed differently when watched together versus alone. Unless FDA can mandate how an ad is watched, then this study seems to be unnecessary. I expect FDA has a rationale for what would be done with the results in terms of guidance changes or other regulatory considerations. It would be interesting to hear what they say would be done with the results. In the comment section of the proposal they mention this study will benefit public health understanding. That, however, is such a broad answer that it has no practical interpretation regarding regulation.

The drug companies are skeptical based on comments already received. Lilly and Abbvie question the practical impact of this study. So do I. Interesting study but not likely useful in regulating advertising. This seems to be more of a study that a university or health think tank might do since they do not need to have a practical outcome. FDA, however, should only do studies that might change how they regulate advertising..

I asked noted advertising critic Bob Garfield to speak at the DTC National last week. As usual Bob basically said media as we know it is dead and we are all missing the radical shift from mass to targeted advertising. In the Q&A, I told Bob that for our Industry the reality is that DTC shifts have been very gradual and television and print still dominate the media budgets.

He is absolutely correct that my grandchildren will view media much differently than I do or did growing up. The issue here is the time frame and the impact on drug and device marketers over their planning horizon. While all drug marketers need to recognize the power of big data, social media, web search, and other growing health media opportunities, we still need to acknowledge that mass is where DTC marketers spend 60-80% of their media money.

The media gurus try to make drug marketers feel like they are missing the boat on targeting. They are right to point out the opportunities but wrong in the assumption that drug marketers somehow are blind to those changes. The drug marketers absolutely recognize that more targeting is a key goal and a preferred use of media dollars. They also know that mass media delivers a good ROI and that these media observers really do not know how to optimize DTC spending.

We do have emerging techniques to make television more effective. Some of those were presented last week and well received. Our target group is generally older, less reliant on newer technologies, and watches lots of television. They still read magazines and newspapers. While the next generation will behave very differently, most product managers are working in a two-three year horizon. That means a very gradual decline in mass media reliance.

So gurus like Bob earn their living making marketers feel uncomfortable and inadequate. That is why they get invited. They are there to make us self critical. Even when they are wrong, the idea of having them speak is to force us to question our marketing approach. Are we moving fast enough? Are we demanding enough from our agencies and media partners? Are we set up organizationally to capture customer data and insights?

Eventually folks like Bob Garfield will be right. Oil will one day be back to $100 a barrel, gold will hit $3000 an ounce, and mass television and print will be radically altered. Should drug marketers feel they are too slow in adapting? Are we so conservative that we are blinded to the new realities? The answer is no. Drug marketers are just as smart as fashion, auto, electronics and soft drink marketers. The difference is recognizing that pace of change varies considerably by industry. Drug marketers should embrace change if and only if it gets the job done in terms of motivating patients to use their drugs.
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The idea that each DTC media budget allocate money to experimentation makes sense. That does not mean, however, that we should rush into a dramatic shift towards the hottest technique. Mass media may not be sexy any more, but as marketers we do what works, and that is what counts.

We have an impending health care cost crisis facing many Americans. Anyone with employer subsidized insurance has seen their share of the cost rise over the years. My personal premiums as a Pfizer retiree have risen every year and now approach $5000 a year plus my deductible. So before I see much reimbursement I pay close to $7000. I know this is still a good plan and much better than what I would pay on the exchange.

On those state and federal exchanges, my premiums would run about $8000 and a deductible of $6000 would be normal. So most health insurance is really for an unexpected serious illness beyond what we would expect in a typical year. Most years I do not reach my deductible, and that is a good thing because it means I am relatively healthy.

So whether one has employer or exchange-based insurance we still are paying our own way much of the time. I know we get that free check-up once a year and a couple of other freebies under the ACA. The fact is, however, that anytime a doctor wants to do a procedure, test, or write a prescription we are paying for all or much of it out of pocket.

I have been getting used to that with my dentist for years since I have no dental insurance. As most of you know teeth somehow are extremely expensive to repair. That tiny porcelain crown costs $2000. My tiny little titanium implant cost around $4000. Lacking dental insurance makes one very attentive when the dentist recommends a procedure. I have lost all reluctance to push back on price and actively explore cost of the procedure. I also negotiate. I am no longer reluctant to show emotion and skepticism when told that little tooth somehow needs work.

We can certainly expect patients to react to this cost shift by engaging in traditional consumer behavior. The idea that patients accept whatever the doctor suggests will be affected by cost. As unseemly as it is, patients will be challenging their provider on price/value. They will demand in advance understandable explanations as to cost and the alternatives.

Drug companies have for years been the recipient of tougher negotiations by insurance companies. Insurance companies have increasingly passed on the cost of branded drugs to their patients. So, the bottom line is drug companies are faced with a marketing problem. How do they convince patients to pay higher fees for their drugs? While tiered formulary has been a fact for years, it is getting worse.
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As patients start demanding value for their money, drug companies need to change their engagement strategies. Added value can be achieved in many ways. That can be through pill size, dose, frequency, side effects, packaging, efficacy, multi-indications, and follow up service.

While patient engagement has always been a goal of drug marketers, it will be more of a company survival imperative in the future. The new patient, driven by cost pressures, will demand value for premium priced drugs. Drug companies may not yet be ready to deal with the empowered patient armed with information and angry at their rising health expenditures. I would hope drug executives are acutely aware of this new consumer power. Successful drug companies will be those who stress price value and respect the rising power of the patient.