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DTC in Perspective: DTC Spending Remains Strong in 2015

Judging by the first three quarters spending numbers from Nielsen, DTC should continue to grow in 2015 and 2016 versus the strong 2014 showing. Last year was the strongest spending in five years. DTC will probably grow more modestly in 2015 off a much higher base of $4.5 billion in 2014. DTC grew to $3.8 in 2013 from a disastrous $3.5 in 2012.

DTC spending could return to above the $5 billion level in 2016. The golden years were 2006 and 2007 with spending of $5.4 and $5.3 respectively. The financial crisis of 2008 and numerous patent expirations started a steep decline from 2009 through 2012. In fact, in 2012, some critics were predicting that DTC was in a long term decline as a promotional tactic.

Bob Ehrlich

“DTC should continue to grow…”
-Bob Ehrlich

What is interesting is to see television remain the dominant medium despite media gurus predicting its demise each year. I recognize the drug industry has an older demographic and that other industries are using television less than in the past. For drugs, however, television continues to take over 60% of the ad budget. There is no reason to think this proportion will change significantly in the next few years.

We know other targeted media are doing well based on other sources. Point of Care is exploding and estimated to be about $500 million, but is not measured by Nielsen. Internet is growing as well but is still a small slice of the pie at about 2% of spending. The world of DTC as media has not changed much over the last decade. Media gurus love to talk about the end of television, but drug marketers are still convinced it is where they should allocate 60-70% of their budget.

In fact we are now seeing television used for drugs that never would have considered it a few years ago. Highly targeted disease states are now using television. Cancer, Hepatitis, and Insomnia for the blind, are just a few now using television. High cost drugs like Opdivo for lung cancer recognize that the payback is there using a broad awareness medium.

With rising DTC spending comes renewed criticism that DTC is causing high consumer prices and over use. Critics were happiest when they though DTC would die a slow death. Now that it is growing again, the spending data will be used as political ammunition. The DTC Industry needs to keep close watch on the calls for a ban, or severe restrictions. The spending numbers show drug makers know using DTC has become critical to create a blockbuster drug. It is nice to see DTC recognized by drug marketers as a must do component of a large drug launch. While DTC may not be appropriate for all branded drugs, it certainly is right for most.

Those of us involved in DTC need a thick skin to deal with constant criticism from politicians, consumerists, physicians, news media, and insurance payers. At least the rising spending makes it easier to take and that uptrend should continue.

Bob Ehrlich
Chairman & Chief Executive Officer at DTC Perspectives
Bob Ehrlich has over 20 years marketing experience in pharmaceutical and consumer products. Bob is the CEO of DTC Perspectives, Inc., a DTC services company founded in 2000. DTC Perspectives, Inc. developed the DTC National Conference, the largest DTC conference in the industry. DTC Perspectives, Inc. also publishes DTC Perspectives, a quarterly journal dedicated to DTC issues and practices. In addition DTC Perspectives, Inc. does DTC consulting for established and emerging companies, and provides DTC marketing plans for pharmaceutical companies.
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