Biomedical Engineering Reference
In-Depth Information
Total DTC Advertising Spend (billion $)
6
4.9 4.91
5
4.43
4.36
4.24
4.07
4.02
4
3.28
2.68
2.64
3
2.47
1.85
2
1.32
1.07
0.79
1
0.38
0.27
0
Fig. 21.2
Total direct-to-consumer (DTC) advertising spend in the USA.
Sources
: (1) 2005-2010
data are from IMS Health:
http://www.imshealth.com/portal/site/imshealth/menuitem.a953aef4d7
(2) 1994-2004 data are from Frank et al. (
2002
) and Donohue et al. (
2007
), both of which cite IMS
Health
decline in overall promotional spending of pharmaceutical products. The share of
DTCA in overall promotional spending of pharmaceutical products has been rising
over the years and has reached as much as 40 % in 2010. Detailing by the sales force
to physicians remains the dominant form of marketing spending, but is losing ground
to DTCA (see Fig.
21.3
). Figures
21.4
and
21.5
show that TV and print media account
for over 95 % of the total spending on DTCA. Another characteristic of DTCA
spending is its highly concentrated nature, in terms of a few companies accounting
for a large share of overall spending (see Table
21.1
). This is in part because DTCA
is largely used to promote brands in a few therapeutic categories only (see
Table
21.2
). Iizuka (
2004
) examines this phenomenon and fi nds that drugs that are
new, of high quality, and for under-treated diseases are advertised more frequently.
He also fi nds that fi rms advertise more when the number of potential patients, rather
than the number of current patients, is large. Donohue et al. (
2007
) similarly note that
drugs that are advertised tend to be new and those used to treat chronic diseases.
In recent years there has been tremendous growth in online DTCA expenditures
by US fi rms, especially utilizing Web 2.0 technology. This form of marketing occurs
via Facebook pages, Twitter feeds, blogs or RSS feeds, dedicated You Tube channels,
and so forth. The size of the expenditure on online DTCA is not readily available.
One estimate (
http://adage.com/article/news/pharma-online-spending-hit-1-billion-
year/146223/
)
puts the total spending on online advertising by the US pharmaceuti-
cal and the healthcare industry in 2010 at $1 billion.
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