Latest News

No, the above is not a movie title. It is referring to an op-ed in the 4/17 Washington Examiner defending DTC by former FDA official Peter Pitts. The op-ed lays out the case why the attacks on DTC are flat out wrong or fake news as Mr. Pitts calls it in the title. Mr. Pitts correctly debunks the argument that drug companies spend more on marketing than R&D. He points out that the drug industry spent $70 billion on pre-approval R&D versus $5.6 billion on consumer advertising. He says you have to add a lot of detailing, sampling, written communications to physicians, administrative expenses, and other expenses that would not be considered marketing by most of us to exceed R&D spending. Based on several sources I found it is really about $20-25 billion spent on true marketing activities including consumer/physician advertising, physician education and sampling.

The news media and drug industry critics like to make DTC the fall guy for high prices. Mr. Pitts correctly points out there is no evidence of that. I have said in the past that actual DTC spending is much less than reported spending at about 70% because drug companies pay less as volume buyers of ads. So that $5.6 is really about $3.9. IMS reports U.S. drug spending of $310 after discounts in 2015. How much can $3.9 drive price in a $310 billion market. Very little. While it is true DTC does raise awareness for new branded drugs, DTC is also the raising of awareness of competitive drugs. Payers play one DTC drug against another to get lower prices.

Mr. Pitts reminds critics that DTC has many benefits of raising awareness of diseases, and in 6% of DTC inspired doctor visits a previously undiagnosed condition is found. He also says only 7% of doctors report feeling pressure to prescribe an advertised drug. Mr. Pitts admits drug makers do DTC ads to sell more product. That does not make it bad or hurt public health.

As I have said in many previous columns, the world of prescription drugs has numerous constituencies. There are no truly objective ones despite a widespread belief that the doctor is always prescribing what is best. Doctors prescribe what they are experienced writing, and some are reluctant to adopt newer drugs. They may not be current on the newest treatments because of time constraints. Insurers obviously want to pay as little as possible on their drug bill and resist branded drugs. Government also is not anxious to pay for expensive drugs given the budgetary issues faced. DTC is just one more subjective constituent making a case for patients, doctors, payers, and government to consider a new brand.

So, thanks Mr. Pitts for warning the public not to fall for convenient sound bites against DTC ads.

The basic problem in American politics today is we are asked choose a side. Either we are supposed love Obamacare or hate it depending on our political affiliation. That we somehow must think Obamacare has been either a savior or villain is the fault of our self serving politicians. Both sides are equally to blame. Democrats seem to love government based solutions and Republicans like to think that if we could just get government out of the way all our problems would disappear. The older and hopefully wiser I get the less convinced I am that either side is right espousing ideological purity.

Here are the problems we face no matter what side you are on. Obamacare greatly expanded coverage but premiums and deductibles rose significantly particularly for those making a middle class salary. While most of us get coverage through employers that doesn’t mean we are unaffected by Obamacare. Employers have held premium increases somewhat in check but have done that by increasing deductibles.
Obamacare did not achieve the promise of lowering premiums for the average family. That certainly did not happen for most of us covered by employers. On the other hand it did allow many lower income people to get basic coverage through Medicaid and the exchanges. That is a good outcome for them, but we all subsidize that through higher taxes and increasing costs for our healthcare.
Like it or not we are now a country that has shifted much more of the healthcare cost burden to the consumer. This is mostly through those higher deductibles. They rose 12% in 2016 for the average employer based plan to $1478. That is cheap compared to people buying plans on healthcare exchanges where the family deductible will be over $12,000 in 2017 for the Bronze plan. With that kind of deductible most families are just getting a plan which they can use when serious illness hits.
So why are deductibles so high? First we added a lot of people with pre-existing conditions. Second we capped the cost of coverage to older folks while charging young people more than their fair share. Not enough young people are signing up so we are seeing insurers raising deductibles to lower their exposure.
Republicans and Democrats must get around the war of ideology and actually work the problem. A dose of competition across state lines is an option to consider to increase the number of insurers in the market. So is a reduction in mandated benefits to lower the cost to the younger age population. There are better ways to provide health services at lower cost such as reducing regulation to allow more physician assistants and nurses to do what physicians do.
There is no shortage of good ideas. The barrier is we have this ridiculous idea that you must love Obamacare or think it is the end of civilization. Republicans shout for all out repeal and Democrats blindly call for expansion to single payer. How about we meet in the middle? There is no shame in admitting Obamacare has some good points and bad points. There is also nothing wrong in thinking HHS boss Dr. Tom Price has some solid ideas to lower costs. Instead Nancy Pelosi and Chuck Schumer have continually vilified him as someone who wants to take away your coverage.

President Trump has shown little desire or aptitude for getting into the policy weeds here. He ran on Obamacare being a disaster but beyond a few talking points I doubt he understands the realities of reform. It will take political courage to compromise and blend free market reforms with Obamacare. Right now the war in Washington will prevent that. Dems want to pander to the progressive wing and Republicans are unsure how far right to go trying to appease the Freedom caucus.
Unless we fix the underlying issues deductibles will keep rising and all of us will be essentially self insured except for a catastrophe. That is not all bad since spending our own money will make us more cautious consumers. We will demand less testing and negotiate harder with providers. More services will be developed to help us evaluate price/quality of physicians and hospitals. That will make providers focus on value based marketing.
It is not surprising why Congress’ approval rating is so low. And healthcare is a perfect example of the failure to help the American people because of pig headed ideological positions not based on facts. They deserve the criticism and they are on a path to zero approval. Sad indeed but here we are unless moderates re-emerge on both sides to actually solve problems. That is something that will take guts, and guts are in short supply right now on Capitol Hill.

We all know about patient support forums. I am sure most of us check one forum or another about a condition we or a loved one have. Only recently did I have an occasion to see how powerful patient to patient sites are in influencing treatment and thought about how important it is to integrate DTC strategies with these groups.

My story involves the male nemesis called the prostate. At my advancing age I get tested annually for PSA levels which have been rising the last few years to a borderline level. My internist was reassuring but suggested that I can see a urologist if I felt concerned. I like to be a well versed patient so the research began which led me to read everything on high PSA levels. I found much information on how so many men get unnecessary treatment which starts with high PSA levels to needle biopsy to removal of the gland. Many of those men have lifelong urinary incontinence and erectile dysfunction from treatment for something that would never have killed them had it been left alone.

I also found new methods to further evaluate high PSA levels without a biopsy. The patient forum approach led me to find these alternatives and the leading edge providers. I discovered that urologists do what they know best and that is recommend an often painful biopsy which is a random sampling of tissue. Armed with alternatives such as a Multiparameter MRI I visited the said urologist. After checking my urine stream with an ultrasound which was fine and had nothing to do with my complaint, he recommended a biopsy. Now this was before he even examined me. No way I replied would I do a blind biopsy without an MRI first. He said those are inaccurate but my research and forum buddies led me to the latest findings which showed they are much more accurate than a blind biopsy.

So I finally cajoled the MRI script from the urologist. I then used these patient forums to find an expert who specializes in reading prostate MRI images. I found one a few hours drive and went. I also saw that insurance would not cover it so I shopped around. The self pay quotes varied from $695 to $2500. Sometimes you get what you pay for but it turned out the lower price provider was the best.

My result was that there was nothing to biopsy and my PSA was rising along with the size of the gland. Long story but the lesson learned is patients talking to patients saved me 12 needle shots to my little walnut sized prostate gland and potential infection. By the way those biopsies miss 30% of actual cancers because they sample only 1% of the tissue. The MRI catches 93% of any significant cancer. Since the percent of men who have microscopic cancer in the prostate is equal to their age, you do not want to find those tiny indolent cancers that will never do you harm.

Doctors probably hate patients like me who read medical journals and discuss options with other patients. Too bad. This is the future of medicine particularly as we self fund our treatments more and more. The idea that doctors and patients have a strong bond of trust is declining. I trust my primary care doctor but have a lot less faith in the specialists who do what they know how to do.

How should drug companies interact with patients on these sites? Given regulatory issues it may be difficult to actively participate. Certainly by monitoring them, however, you learn so much about patient concerns, and how they talk about their issues. At least it gives you a good feel how to develop the right approach to discuss your drug with them. I know providers actively engage and respond to misconceptions about treatments and side effects. So doctors and patients do interact on these sites.

In my case I have become a fan of the patient to patient sites and now help others in my same position. Doctor, get ready for the super patient who takes charge of their care because that is your future.

The final 2016 spending was released recently showing $5.66 billion versus $5.18 in 2015. DTC Perspectives has received some detail on these numbers and we ran some analysis explaining the growth. In 2014 spending was $4.33 billion so the last two years has seen growth of 31%. The 2016 number was a record and we expect $6.0 billion to be reached in 2017.

DTC spending has grown historically when new brands launched DTC programs.  That certainly happened in 2016. Total spending rose about $500 million in 2016. That rise can be largely explained by new brand spending. There were 12 new brands that launched significant DTC efforts in 2016 accounting for about $730 million in media. That is about 13% of the total. There were some huge spenders among new brands. Cosentyx, Entresto, Rexulti, Taltz, Tresiba, Viberzi, Trintellix, and Entyvio all spent more than $50 million in their launch year.

Adding to the new brands were brands in their second year adding to their spending. Trulicity and Breo Ellipta each added over $100 million to their 2015 total. Adding new brands and newer brands increasing spending resulted in an increase of over $1.2 billion versus 2015. With a net rise of $500 million that means some brands must have reduced or cut spending entirely.

Several key spenders withdrew entirely from DTC advertising. Tanzeum, Auvi Q, Spiriva, Duavee, Levemir and Afrezza withdrew entirely accounting for $210 million in reduced media. Large cuts in budgets were seen in Cialis, Latuda, Jublia, Onexton, Belsomra, Crestor, Anoro Ellipta, Kerydin, and Osphena. These cuts reduced spending by $500 million.

There is a diverse portfolio of brands advertising. There are 58 brands with significant budgets of more than $25 million. The top 20 brands dominated and spent 55% of total media. While most DTC brands do both television and print there are many that have small budgets used for print, point of care and internet. There are 84 brands with budgets large enough to do at least print and some targeted web and point of care.

On a company basis Pfizer is the dominant spender at $1.2 billion up about 10%. Notable was Novartis spending $250 million up from less than a million in 2015 from new entries Entresto and Cosentyx. Diabetes drug Trulicity gave Lilly a 40% rise. Opdivo powered BMS to a 15% rise in spending.

We do not have the data yet on splits by media type but sources tell us that there is no significant change in the share by medium. That means television remains dominant and no major brand launches a DTC effort without using television as a large share of the media plan. Nielsen does not report on point of care but the industry remains a growth driver.

While we are seeing record $ 5.6 billion spending numbers for DTC for 2016, we are also seeing a populist tide raging against drug companies. At the upcoming DTC National a few weeks from now we will be spending a lot of time on the forces that may affect the health of DTC in the future.

Most of us practicing the art and science of DTC have no control over political decisions on drug pricing and drug approval. That being said, it is imperative DTC marketers understand the popular sentiment consumers are exhibiting towards drug companies. The Trump movement and the Democrats are aligned in the rage against drug prices. The two sides rarely agree on anything but here they are of one mind.

The presentations we are planning on DTC are not theoretical exercises. Our goal is to educate the DTC community on what you can do to make advertising decisions in the context of this populist movement. We need to read the tea leaves that pricey drugs must be cost justified versus the cheaper alternatives. While few DTC ads address price, we all know that eventually consumers may react with sticker shock when they take their script in to be filled. We must recognize as marketers that every DTC program needs to have an element that addresses price/value.

That element may not necessarily be part of a mass media campaign because it is a complex discussion. Somewhere in the consumer campaign, however, drug companies need to discuss price. Maybe every web site needs a section on price justification. While most drug companies work the coverage angle only with payers, consumers are going to increasingly be partial payers of drug bills.

While the industry does campaigns to portray its research efforts, political forces instead focus on price versus other developed countries. I am afraid this issue is at a tipping point and DTC marketers need to figure out how to deal with it. Many price support programs are part of DTC ads, and that is a good step. Unfortunately, price subsidies address only part of the problem. Eventually, these drug company price support programs end after a year or so and then what?

I am not arguing that DTC television or print ads should directly discuss the drug price. I am, however, advocating that every brand team must understand consumer reaction to drug prices and anticipate how their DTC affects the perception of price/value. We must remember that consumers have no idea from a drug ad whether the cost is $2 a pill versus $2000. What other industry advertising its products is such a mystery to consumers? Consumers have a good feel what a car brand will cost, and they know the range of most advertised consumer goods. Drugs are different and sticker shock is likely for many new advertised drugs.

Most drug DTC marketers have no involvement in pricing their drugs. That is a top management call. What we can do is study the impact of price on consumers and try to study their attitudes in the context of proposed DTC ads. Does our ad get differing reactions based on the price pre and post consumers being told the price? Would their reactions change our creative approach? One thing is certain is that Trumpcare will not forget about lowering drug prices. That is a new reality drug makers will have to adapt to, and DTC programs will need to address it as well.

Every year I seem to need to rebut a critic of DTC who proposes a ban. Google DTC advertising and every month there will be call for a ban in the media. These DTC Hunters think that by making it extinct great things will happen. First, they believe prices for drugs would drop dramatically if only drug companies stopped buying expensive ads. Second, the DTC Hunters believe that by killing ads, doctors would prescribe what is best for patients without wasting time explaining the advertised drugs. Third, they believe that by keeping consumers unaware of new drugs, those good old fashioned generics would become more widely used thus lowering consumer and payer cost.

First let me admit drug ads are designed to sell more pills. The drug industry likes to say drug ads are meant to educate and they shy away from admitting they use DTC to increase sales. We all can agree that DTC is done only to grow the bottom line. So what? Prescription drugs are a good thing and promoting drug solutions should not embarrass drug companies. The Drug Hunters want to expose these evil folks for wanting to sell more of what they make.

So do DTC ads raise prices? That must be answered as maybe. If you mean, do branded drugs cost more than generic alternatives? Then, yes, DTC can raise drug spending. If a patient asks a doctor for a new drug that is no better than an old cheap alternative then I can agree. The reality is quite different in many cases. New drugs generally are improved from older versions or new drugs do not yet have any generic alternatives. I buy store brands if I believe they are equivalent. It is up to the drug maker to make their case to consumers to justify a branded premium. Consumers are not stupid and do not automatically assume this DTC drug is better.

Drug ads are in reality a small cost as a percentage of revenue. These multibillion dollar drugs spend $50-200 million annually. As a percent of sales that might be 2-5% so DTC costs is not a significant factor in drug pricing. Cutting ad spending will not cause drug companies to lower prices. In fact, that money would be redirected to physician promotion or to some other promotion. Since DTC increases sales, one would have to think banning it would reduce sales. Would we expect drug makers to cut prices if they saw sales decline from withdrawing DTC ads? The answer is no.

Let’s ask what would happen if consumers no longer saw DTC. Would physicians really spend more time with patients if they no longer were asked by pesky patients about new drugs? Would they now make their drug selection totally objectively? No. They would instead write drugs that they are used to using thus delaying adoption of new products. They would be detailed by drug reps, or be influenced by journal ads. They would be directed by insurance companies what their patients will get reimbursed on their drug bill.

Drug ads serve many positive purposes. Most importantly, consumers are getting information on what is available for their disease. They become more knowledgeable albeit imperfectly through DTC. They may not fully understand the drug’s pros and cons from the DTC but it is a start of a discussion. The ads incentivize doctors to stay current with new drugs because no doctor wants to appear uninformed with patients. The ads provide leverage to get covered by insurance companies who obviously would rather treat with cheaper generics.

Consumers understand that drug ads are designed to sell them on a product. They are not naïve in believing that the advertised drug is a wonder cure. They know there is wealth of additional information on pros and cons on the Internet. DTC is but one source of subjective information that balances what alternative constituencies are saying. Government payers, private insurers, consumer advocates, competing drug companies, and doctors all have an opinion on the value of the advertised drug. In this subjective world consumers face conflicting opinions. Taking away DTC will not lead to a utopia where patients always get the best drug from the benevolent payers and providers.

Advertising helps build competition. It promotes new products. We may not like it but we would not like a world where consumer choice is censored. DTC is not perfect but serves its role of letting consumers know what is available in a health care world where patients cannot assume objectivity from insurers or providers.

I was shocked to see media stories saying DTC may expand to cover off label use. What! This erroneous idea came from an FDA open meeting held 11/16 to discuss off label use based on court cases allowing drug companies the right to discuss them. FDA has been under pressure on first amendment grounds to liberalize their restrictions on drug companies educating doctors and other learned players on off label studies.

As far as I know no one at FDA is seriously thinking of allowing drug companies to advertise off label use to the public through DTC. I know we are in an era of fake news but seriously folks. FDA goes nuts when the background music is too loud on DTC ads. Does anyone think they will allow drug companies to tout off label uses to consumers? No, they will not. Not even under free marketer Trump

The whole debate over off label is because courts have ruled drug companies can use commercial free speech to discuss studies reflecting off label uses. FDA is trying to figure out how to deal with the first amendment in regulating such uses. They have been strictly using approved label claims as the standard but drug companies want the right to tell the medical world about legitimate off label studies.

I do not think drug companies expect to carry this free speech argument to DTC. All they want is to be able to do is discuss such uses with medical professionals who would want to know that information. Can a detail rep tell a doctor about a study involving off label use? Can a drug company tout such off label uses in discussions with stock analysts? FDA has been quick to pounce on drug companies promoting off label studies to anyone. They fear misinterpretation and incorrect use. They might be justified in their concerns but also need to allow business speech that is fact based even if not yet approved in the label.

The lay press thinks that FDA might open the floodgates of off label use in DTC. A publication as reputable as Consumer Reports had a story 11/9/16 titled “FDA Considers Allowing Drug Ads for Unapproved Treatments.” I am not sure why Consumer Reports made the leap from possibly loosening the regulations for discussions with doctors all the way to DTC. That story seemed to be picked up by many news organizations who said drug ads may increase because of off label uses.

I think the FDA will take years to study this issue and not do more than the courts push them to do. They are just figuring out how drug companies can use the Internet about 20 years late. They are worried consumers will get confused figuring out how to click on the fair balance. So, I do not think off label use is on their list of DTC to do projects, not for a decade or two.