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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.

There are several candidates talking about the high costs of drugs. The Republican front-runner, Donald Trump, has said in his town halls that we could save $300 billion a year by negotiating pricing through competitive bidding. Bernie says drug companies make outrageous profits and through a single payer system, he would dramatically lower costs. Hillary says there will be a monthly cap on what Americans will pay for drugs, and she will institute Medicare price controls, and end tax deductions for DTC.

Mr. Trump has greatly exaggerated the potential savings. Medicare spent about $85 billion on prescription drugs through its Part D program in 2015. Total spending for drugs in the United States was $374 billion in 2014. Assuming price negotiation through Medicare can match Canadian prices, Medicare could save about 30% or $25-26 billion. Assuming private insurers would use these new Medicare prices to help negotiate harder, maybe they can squeeze another 10% out of drug makers. That would add another $28-30 billion.

Let’s say the public and private sector savings add to $53-56 billion annually. And for sake of argument let’s assume both Bernie and Hillary plans get the same. What happens to the drug industry losing $53-56 billion in revenue? About 85-90% of the lost revenue would be profit. That means about $45 billion. Total drug industry profits are in the $100 billion range.

What would happen to an industry that loses 45% of its annual profit? Massive layoffs in all areas of operations, relocation of jobs that remain to China and India, slashing of research budgets, and a focus on less risky drugs would occur. Bernie may think drug companies make outrageous profits but he has no experience how businesses work since he never had a regular private sector job. High risk industries need large incentives to take risks. Many drug companies fail in their research efforts and lose billions doing so.

Assuming Mr. Trump or Hillary succeed in price controls, they will turn the drug industry into a quasi government contractor. New drugs will be those that government agrees to subsidize. That means many smaller disease categories will be ignored as government will focus on the diseases that impact broad populations.

Expect drug marketing to disappear under a government dominated system. Medicare under its price negotiation authority would discourage, if not outright ban drug advertising. After all they do not want Americans to use expensive drugs. All of us in DTC will need to find other work.

There may be private innovators who still develop breakthrough drugs. It will be harder under reduced pricing and I suspect fewer small drug companies will get venture capital. Government will have an increased role in basic research and drug companies will be secondary. Nationalizing R&D sounds great to socialists, but how many new drugs came out of the Soviet Union?

An electorate hostile to drug companies may actually buy into the narrative that price controls work. Our total health expenditures are about $3 trillion in the United States. It would be shame to gut the vital drug industry for a $50 billion saving. Next time we see an Ebola outbreak, a Zika like virus, a new flu, or a drug resistant bacteria, we will want a vibrant drug industry to give us cures. While politically popular to rail against drug companies, the American people need to understand the unintended consequences from a punitive approach to drug profitability.

Rosa Delauro, a Democrat congresswoman from Connecticut, introduced bill H.R 4565 on 2/12/16 that bans DTC ads in the first three years from approval. It also allows the Secretary of Health and Human Services to continue the ban if the drug has had significant adverse events during those three years.

The drug companies can apply to do DTC and the Secretary can approve if it is a positive for public health. Obviously this bill is meant to permanently kill DTC since the adverse event standard is so vague the Secretary can point to them as an excuse to continue bans after three years.

I doubt this bill has any chance to get voted on. First, it is unconstitutional to ban commercial speech without proving the ban is the only way to protect public health. Second, the bill is so vaguely written as to allow such broad and arbitrary authority to the Secretary as to make it clearly a ban of speech. Third, the idea that commercial speech must first apply for that right and prove public interest in advance is unconstitutional.

This bill is merely a political statement from a hard core Liberal democrat. It is the type of nonsensical response from a politician who has no interest in understanding the real cost of drug development. Ms. Delauro prefers to blame advertising for drug prices being high. Somehow, she believes, that if only drugs could be prohibited from advertising, prices would drop dramatically. This is absolutely false and has no basis in fact.

While this bill will go nowhere it does show there is an appetite among Democrats to make drug companies a campaign cause this year. We can expect more bills to end DTC tax deductions, allow foreign drug imports, force drug companies to disclose promotion spending, give Medicare price negotiation authority, and limit patent life.

Any bill introduced in Congress that limits DTC is serious and sets a dangerous tone. The drug companies, media suppliers, and advertising agencies need to call their representatives to voice their opposition. The drug industry employs over 800,000 people directly in the United States and over 3 million indirectly rely on it for jobs. Those jobs can only survive with a profitable drug industry not singled out for punitive treatment. China and India would love to have those jobs and politicians need to be careful vilifying our vitally important drug business.

Novartis has just started a non branded disease education campaign called “Keep it Pumping.” You can see the television ad on the Novartis web site: www.keepitpumping.com. This Novartis web site discusses the serious condition of heart failure which has only a 50% survival rate after five years from diagnosis.

The ad is very memorable, showing a man sitting in his living room as it fills with water, a metaphor for the rising danger of a heart not pumping well. I have read some physicians are concerned the ad is alarmist. They think the ad will stoke unnecessary fears among patients. Obviously Novartis thinks the serious tone is appropriate.

Like all drug companies that do disease education ads, Novartis is running the campaign because it has a new drug to treat heart failure. The drug was approved mid-last year. It is called Entresto, a combination of an old drug, valsartan and a new drug sacubitril. Novartis clinical studies show it is significantly better at reducing mortality versus ACE inhibitor enalapril.

While the ad apparently annoys some doctors, it is certainly memorable. The visual of a flood in a man’s living room while he seems oblivious to it is a good way to show the hidden symptoms and dangers of heart failure. The appropriateness of running an ad that may alarm patients is a legitimate issue. On the other hand, any disease that causes death in 50% of those who have it, is cause for alarm and therefore having an impactful campaign is warranted.

Like all these newer premium priced drugs, the advertisers will face sticker shock from those patients who have problems getting reimbursement or have high co-pays. The recent trend for drug makers has been to advertise drugs regardless of price. They want to create demand as this helps push reluctant payers to cover the drug. Most insurance companies would prefer patients use much cheaper, albeit, less effective old line treatments. DTC for newer drugs is trying to create patient awareness that there are very effective treatments now available. Cost/benefit will be debated by the payers and patient demand has been an important dynamic in pushing payers to cover the newer treatments.

I doubt many Americans who see this ad will suffer undue alarm. Basically, it is designed to get people to be aware that heart failure happens to many of us as we age. The incidence is about 20% over our lifetime. Novartis clearly benefits from encouraging discussions on heart failure because their new drug is premium priced.

I definitely disagree that the ad creates undue fear. Heart failure is not acne, or toe fungus and perhaps a sense of urgency is needed in the creative approach. People who see the ad who might be at risk for heart failure should discuss it with their doctor. Whether he will suggest Entresto or something else is between patient and doctor. Calls for pulling the ad are extreme as there is zero evidence consumers will panic or quake with fear. When I saw it, I paid attention and looked up the web site, not out of fear but out of interest in my health.

Novartis certainly will have to take seriously the opinions of its prescribers and I am sure is tracking physician attitudes. Drug companies should test disease awareness DTC in advance with both consumers and physicians. No ad should be pulled, however, based on a few negative comments. Impactful ads need to be attention getting. Keep It Pumping succeeds and I would keep pumping it out to consumers.

Yes I make my living on the back of DTC ads. That is one good reason I like them. But a more important reason is I learn what treatments might be available. I suffer from chronic sinusitis which makes me feel miserable much of the time. Having had two surgeries with no lasting effect, I learned through advertising about a new technique called balloon sinusplasty. It is the same thing they use to open up arteries, and it is done in a physician’s office under local anesthesia. Sinus openings get widened and better drainage prevents blockages.

I consider myself knowledgeable about new health treatments as I scan the Internet for medical news daily. I discuss my sinus condition regularly with my internist. Despite this I discovered this new treatment through a television ad. It may change my quality of life. Maybe it is not right for me but seeing the ad gives me the chance to investigate its usefulness fully.

While we like to think all relevant health treatments will be raised to us by our doctors, this is just not true. My internist never raised this despite prescribing antibiotics numerous times for sinus problems. When I mentioned it to him recently, he said he was thinking of having it done himself. So, only through seeing the TV ad did I get awareness of balloon sinusplasty.

Now consider the average American who is not employed in the medical field. They need the opportunity to learn of new treatment options in the media they use regularly. For many older Americans it is still through television and print. Seeing an ad for a new drug might be their first or only source of the information. Those who want to ban drug ads would be denying that information to the patient and relying on a doctor to raise it.

In a perfect world our doctor would be up on all new drugs, tests and procedures. We know that these over-stressed physicians are not always informed on new products. All the mass media ad is doing is promoting a discussion. Critics are concerned patients overstate advertised benefits, underplay risks, and ask for expensive drugs they really do not need. There is some of that happening. On the flip side, patients like to know what their options are for treatment. In my case that discussion with my doctor happened only because I saw an ad.

Information is not inherently good or bad. Consumers need to be skeptical about any advertising. Banning information which is reviewed for accuracy by FDA is bad public policy and a DTC ban would cause many patients to remain uninformed of treatment options. In my case I am very happy to have seen an ad for a potentially life altering alternative.

Yes, that is the name of a new documentary that hit theaters Friday, January 22. It is by a documentary film maker Chris Bell. While I doubt it has a wide release, the media will enjoy reviewing it and telling us it is a must see. The only preview I could get was a two minute trailer on You Tube. It may be an entertaining film and I did see Mr. Bell’s first film on steroids which was very good.

In that two minute trailer, the direction of Prescription Thugs was clear and unsurprising. The drug industry makes tons of money preying on naïve consumers. The pharmaceutical industry does not care about preventing or curing disease but likes to manage our diseases with expensive pills. We have become a society addicted to painkillers, anti-depressants, ADD drugs sold to us by big Pharma using advertising and high pressure sales tactics. Sounds like a familiar theme already done by Michael Moore and others.

Maybe all of us should find work in an industry that is more loved. It is getting tiring hearing how evil we are peddling expensive and unnecessary treatments. The media hates us but loves our ad dollars. The left wing politicians cannot wait to punish us for the crime of providing lower cholesterol, lower blood pressure, normalized blood sugar, cures for hepatitis, management of HIV, etc. Somehow drug makers deserve to get their due for years of screwing the public. Bernie or Hilary will make us pay for the years of thuggery. Iranian missiles, North Korean nukes, and ISIS seem to be less of a threat than drug ads and high prices.

Calling us thugs and enemies is sure to solve the cancer cure mission that President Obama just highlighted in the state of the union. I am sure in some Hollywood fantasy Matt Damon will play a government scientist who finds the cure for cancer. In the real world, Hilary and Bernie will have to count on their enemies in the profit making drug world to develop cures.

Documentaries like Prescription Thugs will be seen by few regular Americans, but cited by many industry critics for its revelations. Given the political focus on drug prices, DTC, and rising insurance premiums, we are sure to get a black eye from the negative publicity. I can see the film maker appearing before Congress, along with the usual drug industry haters to testify how the profit hungry corporations must be subjected to price controls and shorter patents.

If you are getting tired of getting hammered by the politicians, the AMA, the mainstream press, consumer activists, insurers, and your friends and relatives; then maybe we can all do something better for society. After all curing disease may be over rated. Maybe we should just let someone else do it, and hope it plays out like a Hollywood screenwriters’ fantasy.

Welcome back to Pradaxa, a drug to prevent stroke, with a new ad campaign. The new television ad is quite unique. It is entirely a simulation of what happens in a blood clot caused by atrial fibrillation. What is really interesting is the use of swimming fish to represent blood cells.

The competition Eliquis and Xarelto have been big DTC spenders since launch. Pradaxa appears to have stopped a heavy DTC television effort in 2014. It seems they decided to return with a heavy television media buy and completely new creative this month. The three heavy spending brands now have very different creative approaches. Eliquis has the very common theme of a patient telling a story of why they chose Eliquis. Xarelto has gone celebrity with golf legend Arnold Palmer actor Kevin Nealon, race car driver Brian Vickers, and basketball star Chris Bosh. All three ads can be seen on Ispot.tv.

Pradaxa decided to leave its past approaches of doctor testimonial and father and daughter conversation. Instead it changed to a very engaging, but simple visual of the red fish (blood cells) swimming through the circulatory vessels and showing how they can clump together to form a clot that can travel to the brain. I have to say I paid attention to this ad. Somehow the little fish were hypnotic and I could not stop watching.

I am sure the marketing team tested the ad and got very good recall of the visual and the message of how Pradaxa helps prevent the clot. What I like is that Pradaxa developed a unique look that gives it a competitive difference. All three commercials work and I cannot comment on which is actually best at generating sales increases. What I can say is Pradaxa needed something different and could not re-enter using standard vignettes or doctor testimonials. Using a memorable device allows potential customers to discuss the Pradaxa ad with doctors using either the brand name or saying the ad with the fish. I assume the Pradaxa detail force let doctors know about the new campaign in advance or as it aired.

The stroke category spends over $200 million a year and the re-entry of Pradaxa will add to that level. Whether this new ad is just a test by Pradaxa or a major full year campaign remains to be seen. If they are to get competitive share of voice they will need to spend at least $50 million as both Eliquis and Xarelto are saturating the airwaves with $75-100 million each. Usually an ad campaign needs at least three months to measure effectiveness and that means I expect to see Pradaxa ads at least through the spring.

Twenty years of DTC advertising has not seemed to be enough time to gain acceptance by physicians, consumer advocates, and politicians. In fact the anti-DTC sentiment seems to be reaching a frenzy this election cycle. I have discussed before why this is happening. In brief, it is because of the false assumptions that DTC raises drug prices, creates demand for over treatment, sets false expectations of efficacy, wastes physician time discussing drug requests, and discourages non drug alternatives.

The drug industry has largely failed to change attitudes among consumers about its image. Surveys show a lot of anti-drug company sentiment and a feeling that there is a problem in drug advertising. Despite the anti-drug company sentiment, consumers seem to rely on drug advertising for their awareness of new treatments. There is no doubt for most brands DTC is a successful investment.

The reason drug companies have PR problems is because of the fundamental issue that Americans do pay more for branded drugs than Canadians and Europeans. American prices fund drug company research budgets. It is hard to explain to Americans that they subsidize drug development for other developed countries. It is difficult to get politicians to stop bashing drug companies even though most are smart enough to recognize what would happen if the United States imposed price controls. Research would decline and government would not pick up the slack. Politicians on the left take the easy route and use prices as a campaign issue.

This PR nightmare is here to stay and drug companies are battling DTC critics as best they can. Mostly they are using tremendous lobbying clout to prevent price controls, tax penalties for DTC, and punitive patent policy.The media and advertising agency trade groups are also fighting any DTC restrictions through intense lobbying.

My recommendation for DTC marketers is to unapologetically market your products through advertising. I am convinced that DTC works because consumers learn important news through DTC and in many cases follow up with their doctors. Consumers may say they have issues with drug ads, but they act on them anyway. DTC is just the start of a consumer initiated process, and there are many opportunities to learn of alternatives to advertised drugs.

The best thing drug companies can do to blunt criticism is to make truly added value solutions that cure or control disease. Ask a Hep C sufferer if Harvoni is a miracle drug. Ask the people with HIV who now live a relatively normal life if drug companies changed their lives. Those drugs would not likely be here without the strong profit motive. DTC is not perfect and does lead to some issues for payers and doctors. On balance, DTC is a net positive and although Hilary and Bernie will disagree, DTC marketers should be proud of what they do.

I expect 2016 to be a strong year for DTC spending and could top $5 billion again. There are numerous media opportunities to improve DTC effectiveness and efficiency across mass and targeted media. These opportunities are in creating better ads and in optimizing media selection. Technology has created opportunities to do deep dives in how consumers digest DTC ads. All DTC advertisers have opportunities to get better ROI if they use the many tools suppliers have developed.

While we have gotten good at creating the basic DTC ad, can we say they are the best we can do? DTC is 20 years old but health care is changing so fast that the learning curve on what motivates consumers is still at its infancy. That makes being a consumer marketer of health products an exciting place to be despite the criticisms.