Wednesday, August 31, 2005

Saving Public Merck

Kevin Hassett, director of economic policy studies at the conservative American Enterprise Institute and sometimes economic adviser to Republicans, suggested in a commentary that "Instead of piling on with populist rhetoric and economically illiterate reimportation bills, Congress should seek ways to shelter firms from excessive litigation. Protections such as those in place to guard against vaccination lawsuits should be extended to all FDA-approved drugs." (See "The Misguided Assault on the U.S. Drug Industry: Kevin Hassett").
[Hassett also said: "Since foreign governments often dictate low prices to U.S. firms, reimportation is akin to allowing the French government to set prices in the U.S." While you're at it Kevin, why not also accuse the British? They also "dictate low prices to U.S. firms." C'est la vie!]

[BTW, I love it when these "free market" guys instinctively turn to the federal government to bailout corporations in trouble!]
Hassett's remarks, of course, were focused on Merck's woes in the wake of the first Vioxx liability case defeat. Analysts have estimated that Merck could end up paying $50 to $80 million in Vioxx-related damages and that as many as 48,000 people could sue the company. (See, for example, "Merck's Vioxx bill could hit $50 billion").

Members of the
PHARMA-MKTING online discussion group discussed Merck's fate and what could be done to save the company not long after the infamous Texas verdict was announced. I suggested that Merck might seek a government bailout. Here's the discussion thread: Peter C. asked:
" will Merck be able to survive the fall out here? Surely their future is just not viable after this judgment? How do you see the future game being fought? No one would buy Merck in this situation - is the future only going out of business when your assets are totally stripped, or is there an alternative scenario? Interesting to see your comments."
John Mack responded:
"One possibility is legislative action or government bailout a la Chrysler. Merck develops a lot of vaccines -- remember Bioshield and the War On Terror (sorry, global struggle against the enemies of freedom)? Not that there's anything right with that! It wouldn't be in the spirit of free enterprise or a market-driven society, would it? "
Terry N. retorted:
"I can't imagine the government bailing out Merck There are plenty of viable
companies out there, no national security implications, bailouts are out of
fashion (they watched Anderson crash and burn, in fact they practically
orchestrated it), ad pharma is even more so."
Paul M. rejoined:
"There are plenty of other companies that can make vaccines. Merck would stand a better chance of government bailout money it they were an airline or OIL company. I'm pretty sure the current administration has a 'simpatico' for oil companies."
David O. wasn't worried about Merck's fate in the long run. He wrote:
"Large settlements, whether it's the tobacco industry or state lottery winnings are seldom paid out in cash on the day of the award. The CFO is not going to write out a check, paid in full. Settlements will paid out over time and/or financed. Stretch the payments out long enough and it will feel like a bond. It will certainly be a drag on earnings for a long time, but it will get factored into the stock price and the company will move on. The NYT on Saturday even discussed the new and improved Cox-2s that are in the pipeline from GSK, Novartis, and even Merck. There are enough doctors and patients who need the class."
Rebecca O. offered Merck stockholders some advice:
"Perhaps we have only to look at past companies facing such large liabilities to see what may happen to Merck. Does anyone remember that IUD that bankrupted a company or how about the breast implants that were later found to be "safe". I don't think Merck will be filing for bankruptcy based on one verdict but that has to be in the equation now that they have one verdict against them. You can bet they will continue to fight not just to overturn this verdict but to get not guilty verdicts in other marginal cases. At a party over the weekend the subject came up in conversation with a group of non pharma people and to my surprise they were still holding on to their stock.

"My company has a War Game offering which attempts to prepare companies for something like this. We have a "model" which we've developed that is based on stock valuation and critical events. Regardless of the product there are some very important events which are predictive of the future course. Unfortunately for Merck, a guilty verdict in the first case is not a positive outcome for predicting future stock value. Based on our research there will be a downward slide for a few weeks of the stock and then with the news dying off, the stock will stabilize until the next big piece of news. My bet will be the next big piece of news will be not the trial in NJ but rather the filing of more law suits increasing the potential liability. I say this because the guilty verdict will simply redouble the efforts of attorneys to accept patients with marginal claims into class action suits.

"Having said all of this, I think anyone would be foolish to count Merck down and out. They have a powerful lobbying machine and have friends in very high places. So who knows what the future will bring for Merck, but I advised my party friend to sell Merck or short Merck ASAP. How about you guys? Still holding on?"
Tom B. managed to link Vioxx to Vietnam!:
"The preliminary decision is likely to be dramatically reduced, to around
$2 million, and then Merck will push for a class action set up. They are
unlikely to liquidate, though bankruptcy is a real possibility. They do
have good assets, so once the legal risk exposure gets nailed down, they
will make a nice addition to Pfizer or Novartis, etc.

"Irrespective of how you feel about tort reform and large jury awards,
let us not lose sight of the fact that Merck's decision to suppress this
information may have killed as many people at the U.S. lost in nearly 20
years in Vietnam. That is unconscionable."
Terry wasn't having any of that and bolstered his case with some numbers:
"Things being bad enough as they are, Vioxx isn't comparable to Vietnam.
According to David Graham, MD, of FDA, statistically estimated excess
incidence of Acute Myocardial Infarction (AMI) and Sudden Cardiac Death
(SCD) attributable to Vioxx at just over 27,000. Vietnam deaths were
over twice that (around 58,000.)"
Tom shifted gears a bit, but stayed on point:
"Fair enough. But 27,000 exceeds the 23,615 KIA (Killed In Action) in the
Korean Conflict.

"The point is that the number of people affected by Merck's decision is
significant, and should not be forgotten in the context of discussions
about tort reform or corporate survival."
I think that's a fitting place to end the debate!

Tuesday, August 30, 2005

Ethical Pharma Marketing: Oxymoronic?

The Industry Veteran (a pseudonym) over at The Health Care Blog yesterday wrote a piece that criticized pharmaceutical marketing and concluded that "Pharma has switched from a research-driven industry to one that is driven by bad and unethical marketing." (see "The Industry Veteran, on what the Vioxx verdict means," posted 8/29/2005).

This leads me to ask, can ethics can be applied to marketing in general and pharmaceutical marketing in particular? I ask this because the public generally accepts that marketing "stretches the truth" and needs to be taken with a grain of salt as it were. In fact, marketers have been called "bullshit artists" more or less as a term of endearment or at least one that signals tolerance. I discussed the "bullshit" nature of marketing before and even invented the "bullshit meter" to measure the level of bullshit in pharmaceutical marketing. See "Is Pharmaceutical Marketing a Lot of BS?" for more on this subject.

In the book "All Marketers Are Liars" the author, Seth Godin, makes this case: "Successful marketers are just the providers of stories that consumers choose to believe. ...the only way your idea will spread is if your tell the truth. And you are telling the truth when you live the story you are telling--when it's
authentic. This is what makes it all work: a complete dedication to and embrace of your story."

For Godin and many other marketers "truth" becomes "a complete dedication to and embrace of your story." This is the essence of a bullshitter. A bullshitter has no regard for what is literally true and cannot possibly "prove" his claims based on evidence. This is why Merck lost its first Vioxx trial -- the evidence was irrelevant because the marketers told consumers a story they wanted to believe: Vioxx worked and was safe (even Dorothy Hamill used it; would we hurt Dorothy?).

Ethics involves more than telling the truth or being authentic. "Truthful" or "authentic" marketing communications can be unethical. Advertising never "tells the truth, the whole truth, and nothing but the truth" as required by testimony before a court of law. Marketers can tell only part of the truth; i.e., dodge side effect issues revealed only at higher than recommended doses for a drug ("Doctor, there are no proven cardiovascular side effects at the 20 mg dosage level."). And even though there are laws and regulations governing pharmaceutical and other forms of advertising, unethical advertising can be completely legal.

Ethics is about making tough decisions based upon a person's moral principles and values. These decisions are not made in a vacuum. When you work for a large public company that puts pressure on its managers to "make the numbers," it's difficult to do the right thing unless there is strong support from the top down. That top-down support seemed to be missing at Merck, which has lost its venerable moral compass
(see Corporate "Moral Values" Anyone?).

The answer to the question I put at the beginning is "yes," we can apply ethics to pharmaceutical marketing and "ethical pharmaceutical marketing" is not oxymoronic! You can't, however, expect marketing managers to lead the way. This is a job for the CEO and top management.

I suggest that pharma companies can win a lot more public trust by dusting off their corporate codes of ethics -- I'm not talking about the new DTC advertising principles, which were designed more for public relations than for defining ethical behavior -- and clearly defining where the limits are for employees. If you don't already have one, create a corporate ethics officer that reports directly to the CEO. And, please, do NOT give this job to a lawyer! (Only one in five corporations have an ethics officer.) Top management should make it clear that they live by the code and expect the same from all employees.

Monday, August 29, 2005

Pharma Image Makeover Tactics Unconvincing

Last week, the Wall Street Journal reported that "the pharmaceutical industry is undertaking a makeover of its public image." (See "Stung by Public Distrust, Drug Makers Seek to Heal Image"; 8/26/2005)

The recent decision against Merck in the first Vioxx liability case in Texas has made a makeover a high priority among pharma execs. Arthur Higgins, chairman of Bayer Healthcare, for example, admitted "The decision against a clear statement that despite all the good our industry is doing, we're losing the battle for consumer trust."

The industry's strategy to win public trust seems to be all about spin and damage control and nothing about transparency (see "Transparency: A New Voice for Pharma") or making fundamental changes in how it conducts business and markets its products..

I suggest that the pharma industry needs to make over more than its image. The first thing it should do, in my humble opinion, is to "kill" their lawyers! Of course, I don't mean literally kill them or even downsize them. They are a necessary evil, I know. But pharma companies should not, for example, have their lawyers write consumer communications like brief summaries! (See "Labeling / TV DTC Revisited.") Merck's trial lawyers also did not do such a great job explaining Merck's scientific evidence (see "Merck Science like 'wah, wah, wah' ").

Pharma might also include some lobbyists in their hit list.

"Our industry has been successful in lobbying efforts, avoiding bad legislation and getting good legislation to pass," says Eli Lilly & Co.'s chief executive, Sidney Taurel. "But we did that at the expense of our image. In fact, as our lobbying grew more successful, our image suffered."
There definitely is an inverse relationship between lobbying and pharma's public image. Last week, Arizona Sen. John McCain, for example, said U.S. pharmaceutical companies have gone from revered to "reviled" because of their opposition to prescription drug imports and lobbying during the establishment of the Medicare drug benefit in 2003. (See "McCain critical of U.S. pharmaceutical industry"; American City Business Journals/Phoenix (free registration) (8/25))

Moreover, the image-improving tactics being employed -- curbs on consumer ads, expanding access to low-cost drugs for the poor, and open disclosure for clinical trial data -- may not go far enough or even as far as promised by the industry.

Take the promise to provide more clinical trial information. A June 2005 NYT Editorial expressed dismay at a government report that Merck, GlaxoSmithKline and Pfizer have effectively reneged on their pledges to list clinical trials of their drugs in a federal database. The editorial also said that this "deplorable intransigence" also extends to voluntary industry databases, where Merck and Pfizer are most prominent withholders of data.

While the industry has made promises to reform DTC advertising and deliver more education, it is still too early to determine if the Pharma marketing aircraft carrier has made a turn yet (see "Pfizer DTC Pledge: ED is Litmus Test").
Some critics have also said that the new DTC guidelines do not call for substantial changes. Scott Hemsley, a financial reporter at the Wall Street Journal contends that the "Industry's Voluntary Principles May Not Be Bold Enough To Restore Consumers' Faith" (see "Drug Makers Seek To Transform Advertising"; 8/29/2005).

Pharma's program to provide low-cost drugs for the poor is a good PR move designed to deflect criticism of high drug prices. Much of the flak against high drug prices, however, has come from the elderly, fixed income segment of the population. These people have political clout, especially with Republicans like Frist and McCain.
Pharma is currently shifting -- through promotion and education -- these people away from patient assistance programs to the Medicare Rx benefit, which is a public, not private, assistance program and a windfall to the drug industry. After the elderly are signed up there will be few people left with any political clout to sign up for pharma's drug assistance programs, which will then be marginalized.

Friday, August 26, 2005

Merck Changes Tactics, Lawyers Too

In the wake of last week's verdict in the first Vioxx liability case (see Merck Found Negligent!, Jury as Focus Group, and Merck science "like wah, wah, wah"), Merck is now defending its legal strategy as well as its Vioxx marketing practices.

In an article in today's New Your Times (see "
Maker of Vioxx Says Some Suits May Be Settled"), Merck's general counsel, Kenneth Frazier, "said in an interview yesterday that Merck would consider settling suits brought by people who took Vioxx for long periods of time and had few other risk factors for heart disease. Nearly 5,000 Vioxx suits have already been filed, and tens of thousands more are expected."

However, Mr. Frazier said Merck would settle only a "small fraction" of cases. Perhaps a trickle of settlements will become a floodgate if Merck loses more cases in the future.

Speaking of future cases, Merck seems a little gun shy and has asked for a delay in the next trial -- in New Jersey -- citing publicity over last week's verdict in Texas. They don't want to lose a case in the pharmaceutical capital of the world! Think of the publicity that would generate!

In the midst of all this, "Merck has already designated lawyers from other firms to handle the New Jersey and New Orleans cases."

Merck is Learning, But Are They Learning the Right Things?
In a Wall Street Article (Merck Eases Stance on Vioxx Suits), Mr. Frazier is quoted as saying: "Each time we do this, we learn and hope to sharpen our approaches" and "We are learning as we go along about how best to present evidence to juries composed of lay people."

Of course, this is the lawyer speaking, not the scientists and marketers. The latter need to learn about how best to present side effects and efficacy evidence to the general public from which juries are selected. See "Jury as Focus Group" for more lessons Merck and the entire Pharma industry should learn from the Texas trial.

Agreement from a Counterpart
Bob Erhlich, Chairman and CEO of DTC Perspectives, agrees that the industry needs to learn more about communicating risk and educating the public about the proper use of its products. Erhlich said:
For the half of you marketers out there who still have medical brief summaries, the Merck jury should scare you. The drug company lawyers who want the kitchen sink of side effects written in medical terminology so you are “protected” from liability litigation are dead wrong. A reasonable jury will want to punish companies that advertise (yes the brief summary is advertising) terms consumers cannot possibly understand.
I have alscriticizeded the package insert and "brief summary" (see "Future of Drug Print Ads") and I am happy to see that Erhlich agrees with me that "There is no excuse for being captive to company lawyers who are wrong."

Wednesday, August 24, 2005

Are Pharma Ad $ Moving Online?

Tris Hussey over at Rx Market Share Blog sees an upward trend in pharmaceutical marketing and advertising online (see "Pharma looks online for relief"). He cites an eMarketer report ("Pharma Ads Moving Online") for his optimistic point of view.

There are good reasons why pharma SHOULD be spending more money on online advertising and these reasons are pointed out by Hussey and eMarketer. I also have written on this subject (see, for example,"
Internet Marketing: Risks Ahead") in which I cite data from surveys, etc.

The cause for this optimism is the new guidelines for DTC, which call for more disease awareness advertising (see "
PhRMA Finalizes DTC Principles" and "Pfizer DTC Pledge: ED is Litmus Test") and specifically exclude the Internet from limitations imposed on DTC advertising. Because we all feel that the Internet is best suited for the type of in-depth communication required for disease awareness, we all feel optimistic that more money WILL be flowing into Internet marketing (see, for example "Alternative to DTC: cDetailing," for an example of how pharma may be using the Internet for DTC in the future).

However, the numbers just are not there YET. "Most pharma companies spent less than 1.5% of their entire advertising budgets online in 2004," said eMarketer. "AstraZeneca was the most committed online advertiser, devoting 5.7% of its ad dollars to the Internet."

This is an issue that has come up many times before among members of the
Pharma Marketing Online Discussion Group and I have also editorialized on the subject (see "What Stands in the Way of the Mainstream Use of the Internet by Pharmaceutical Companies?").

A response to this question from Sanjay Virmani, a member of the Pharma Marketing Online Discussion Group, was:
ONLINE Ads: Like what? Banners, google keyword searches, blog posts? I wonder how effective these might be to make folks aware of undiagnosed disease states and potential treatment options. Click-thru rates are limited even for things we buy online like computers and electronics. What might one expect for Rx drugs and health conditions? And now in the post Vioxx environment, how much would consumers really want to get their information from clicks on banners and keywords? Ask yourself if you would.

ONLINE Communication like disease awareness, communication of risks/side-effects: YES. I think pharma should and will focus on this kind of online activity. Of course a bit of this has been going on already. One thing that is missing though is getting physicians to themselves guide consumers to go online and get detailed info on the drug and the disease. And creating the kind of content that gives them (the physicians) the reasons to. If properly executed, this would benefit the consumers and the physicians much more than current practices which seem to be antagonizing both.
If anyone has pharma online ad spending numbers for 2005, please let me know. You can e-mail me at

Tuesday, August 23, 2005

Merck science "like wah, wah, wah"

As reported in yesterday's Wall Street Journal ("Merck Loss Jolts Drug Giant, Industry"; 8/22/2005). the jurors in the first Vioxx liability case dismissed the scientific evidence presented by Merck in short order:
Jurors who voted against Merck said much of the science sailed right over their heads. "Whenever Merck was up there, it was like wah, wah, wah," said juror John Ostrom, imitating the sounds Charlie Brown's teacher makes in the television cartoon. "We didn't know what the heck they were talking about."
Matthew Holt over at The Health Care Blog, quotes extensively from this article (WSJ on how Merck lost).

In a previous post ("Jury as Focus Group"), I listed 3 messages from the Texas jury that the pharmaceutical industry should get and listen to. Today, I add one more:

Message #4: Don't bury us in scientific/medical jargon. Make it easy for consumers to understand the facts.

But, as I pointed out above, the science was actually beside the point as far as this jury was concerned. They felt that Merck lied or held back important information and did so to protect sales (Merck was incriminated by its own memos!). Someone has to be held accountable for that -- this is the main takeaway.

Merck will base its appeal on the science (see "Merck to Appeal Verdict in Texas VIOXX Product Liability Case") and may even win the appeal. The appeal, I assume, is made before a judge, not a jury of citizens or customers of Merck. Judges are more easily convinced by the facts, but not too representative of the public at large.

Pharma Taking Its Marbles Elsewhere?
In light of the judgment against Merck, Pharma execs are beginning to complain that developing drugs for primary care may be too risky. At first, I thought they were listening to their lawyers, but now I believe this is a veiled threat to every patient out there: "Just remember, vote against us and we'll take our marbles elsewhere. Then where will you be?"

This issue is currently under discussion on the Pharma Marketing Online Discussion Forum and I'd like to quote from a post by Terry Nugent, VP of marketing at a medical marketing agency, who offers another viewpoint:
Vioxx is a tragedy that exposes the dangers of the conflicting pressures on health care professionals in pharma and elsewhere between profits and patients. One can argue that the benefit in this case did not outweigh the risk, particularly in the patient population not at risk for GI bleed from aspirin and especially in the subset thereof with CV risk.

As you say, John what killed Merck here was recalcitrance in disclosing the CV risk. However, in the real world companies are faced with hard choices on this every day. No one wants a black box if they can avoid it because it's a tombstone for the product. The nightmare scenario is that lack of same can be a tombstone for patients and in this case possibly for the company itself.

In the airline industry they use the term graveyard engineering, meaning that known safety risks become priorities only after fatal crashes. The same is true in many fields, e.g., homeland security post 9/11. I think Vioxx is one of those watershed events. Companies will shy away from primary care blockbusters to focus on specialty areas where the rewards of innovation clearly outweigh the risks. Ethics have replaced marketing prowess as the most admired company characteristic according to Pharmaceutical Executive magazine. In the end, the industry may be better for it, but it will certainly be much different than the one we have known for the past 20 years or so.
I would say in response that the Pharmaceutical/health industry is DIFFERENT than these other industries. I can choose not to fly, but it is more difficult to choose not to treat my medical conditions. It's practically a maxim that marketing drugs is different than marketing toothpaste or vacations.

Remember Merck's former CEO George W. Merck who said: "We try never to forget that medicine is for the people. Not for the profits. The profits follow, and if we have remembered that, they have never failed to appear."

Monday, August 22, 2005

Jury as Focus Group

While Merck is pre-occupied planning its appeal of last week's judgment against the company in the first Vioxx liability case, it is hoped that Merck's CEO and other pharmaceutical executives correctly interpret and learn from the jury's messages.

As reported in the Wall Street Journal ("
Jury Finds Merck Liable in Vioxx Death"; 8/20/2005), Mark Lanier, attorney for Carol Ernst, the plaintiff, "told reporters, referring to the jury: 'These people are good, solid people. They know right and they know wrong. It sends the message that the drug companies must tell us the good the bad and the ugly.' "

The industry should consider this jury as an
independent focus group. Focus groups are often used by the industry to do market research. The difference is, this group was presented both sides of the case and had access to a lot of information, including the good, the bad, and the ugly.

Message #1: Merck did NOT put patients first
Matthew Pallardy, a 24-year-old juror from Alvin, Texas, said his vote was a message to Merck: "You did wrong. You dropped the ball. We rely on Merck. We're hoping that they would protect us and not keep stuff from us."
In a new TV ad campaign costing $20 million, Merck proclaims a new slogan: "Merck. Where patients come first." As I said in a June post to this blog ("Patients Come First?"): "Not so long ago, when Merck was trying its best to hide evidence that Vioxx could cause serious heart problems, it seemed that patients came last at Merck." The jury in the Texas case agreed and said that Merck hid important information not only from the public, but also from physicians.

Message #2: Warnings were delayed to protect sales

A Reuters story ("
Texas Jury awards $253 mln in Vioxx trial"; 8/19/2005) reported:
"Juror Derick Chizer, 43, said the jury, which deliberated almost two days, knew their award would probably be cut, but felt Merck needed a jolt to change its ways.

"That ($229 million award) was a message to them," he said.
The $229 million in punitive damages awarded to the plaintiff -- as opposed to the additional $24 million in actual damages -- is, according to Lanier and at least one juror, the exact amount of money "Merck made and saved by putting off their product label changes."

Message #3: Warnings were hidden in the labeling

In an MSN News interview of jurors immediately after the decision, the jury foreperson said the jury was "alarmed" that the
revised, post-VIGOR Vioxx labeling had a "small warning [which] wasn't something that would catch your attention or catch the doctor's attention." This information appeared in a small paragraph on page 7 of the labeling copy.

Another juror remarked that the information was not, as claimed in court, "naked to the gross eye. You had to dig for it."

Not only did Merck hide important side effect information in the labeling to physicians, it is also accused of training its sales reps to "dodge" direct questions about cardiovascular side effects from physicians:
According to company documents, representatives known as ''detailers" were told by superiors to sidestep questions about heart risks. If a doctor expressed concern, they were told to produce a pamphlet written by the Merck marketing department that said Vioxx was eight times safer for hearts than similar painkillers. The pamphlet did not include details from the Merck study that showed a fivefold increase in heart attack and stroke risk with Vioxx compared with naproxen, another painkiller. ("Merck told sellers to avoid talk of Vioxx heart risks"; Boston Globe, 5/6/2005)
"Kill all the Lawyers"?
Characters plotting a revolution in Shakespeare's play Henry VI vowed to get rid of all the lawyers as the first benefit of their new regime. Less reliance on lawyers may be good for the drug industry as well.

The package insert figured prominently in the first Vioxx trail. I have criticized the typical package insert language in a previous post to this blog (see "
Future of Drug Print Ads") and noted that lawyers, not clinicians or specialists in medical communications, are primarily responsible for the wording of drug labels (see "Labeling / TV DTC Revisited").

We now have the spectacle of lawyers getting pharmaceutical companies into trouble, but unable to get them out of it! Either way, they get paid!
The pharmaceutical industry is in the midst of a revolution thrust upon it by the failure to "put patients first." The industry has come up with new DTC guidelines that promise to lead the way in this revolution. But the course of the revolution is in danger of being hobbled at every turn by an over-reliance on advice from lawyers rather than on advice from the industry's customers: the public (patients) and physicians.

Message to Pfizer

Pfizer is the pharmaceutical company we now all expect to lead the way as America's pre-eminent and most trusted pharmaceutical company. Pfizer also has a Cox-2 inhibitor product, Celebrex, which is very similar to Vioxx. So it's natural to think of Pfizer as the company that can best learn from Merck's mistakes. It may be too late for Merck, but not for Pfizer.

Pfizer and many other pharmaceutical companies recently have pledged to educate physicians about new drugs before initiating DTC advertising campaigns (see "
Pfizer DTC Pledge: ED is Litmus Test"). This commitment should extend throughout the product lifecycle. In addition, pharma's communications with physicians need to be transparent about risks as well as benefits. No more dodging questions and no more hiding side effects in legalese mouse-sized print on labeling!

Pfizer also pledged to improve risk communications:
Pfizer will fund research to find ways to further improve risk communication in DTC TV advertising. We will conduct this research with input from the FDA and third parties and will adjust Pfizer's communications based on the results. (See "Pfizer Announces Improvements to Consumer Advertising for Prescription Medicines.")
Forget going to the FDA! Pfizer and the entire drug industry would benefit more by assembling into focus groups the hundreds of jurors that will be generated from current and future Vioxx trials. These people will have a lot to say.

Are you listening?

Friday, August 19, 2005

Merck Found Negligent!

As reported by the Wall Street Journal: "Merck & Co. was found negligent in the death of a 59-year-old triathlete who used Vioxx, a prescription painkiller used by more than 20 million Americans before it was linked to heart attacks. The jury awarded the man's widow $24 million in actual damages, plus $229 million in "exemplary," or punitive damages, for a total of about $253 million." See "Jury Finds Merck Liable in Vioxx Death".

On question #1 of the
judge's charge to the court, the jury answered "yes" that there was a "marketing defect" meaning that Merck failed to give adequate warning of the product's danger, which resulted in the product being "unreasonably dangerous as marketed."

More next week. Hope you have a great weekend Merck!

Pharma Marketing Newspeak

Although I am willing to forgive a little bit of pharma marketing BS (see "Is pharmaceutical Marketing BS?"), I am queasy about out-and-out deception, which seems to be what Sepracor's DTC ads for Lunesta, a new anti-insomnia drug, are practicing.

The Boston Globe reported that several "high-profile psychiatrists" say that Sepracor is misrepresenting the new sleeping pill (see "
Doctors criticize sleeping-pill ads").
One print ad says Lunesta is "the first and only prescription sleep aid approved for long-term use." Similar phrases appear on Sepracor's website for the drug,, and in television ads.
The problem is that the labeling does not indicate how long the drug can safely be taken. The FDA merely did not require the label to specify that the drug is for "short-term" use, as it has for other insomnia drugs.

Ordinarily, I might let this slide, as the FDA seems to be doing. However, DTC ads are now under close scrutiny by the public and, obviously, by physicians. The industry has promised that they will consult with physicians before running DTC ads for new products. Obviously, Lunesta was launched before the new PhRMA DTC guidelines were endorsed by Sepracor. The guidelines don't go into effect until 2006 anyway. The Lunesta ads do not, therefore, violate the letter of the guidelines, but they bend the spirit.

I grew more suspicious that deception was actually intended after I listened to the December, 2004 investor conference call announcing the Lunesta launch. In this call, Timothy J. Barberich, Chairman of the Board and Chief Executive Officer of Sepracor, was careful NOT to say that Lunesta was "the first and only prescription sleep aid approved for long-term use." What he said was: "Lunesta does not have a short-term restriction in its product label..."

Corporate executives can go to jail if they misrepresent facts, especially to investors. I am sure Barberich had this in mind when he made his presentation to investors immediately following the forward-looking statement. Marketers, on the other hand, are free to misrepresent facts, but only at the risk of being convicted in the court of public and physician opinion. Sepracor and Lunesta may already have been convicted in this court.

Thursday, August 18, 2005

Alternative to DTC: cDetailing

Last week I posted what I hoped would be the beginning of a series of ideas about alternatives to DTC (see "Alternatives to DTC, Part 1"). Today I'd like to expand upon that with a specific idea for an alternative to DTC, which may or may not be new.

The idea is Consumer Detailing or "cDetailing."

In June, Medsite announced an agreement with Yahoo! to launch its first Consumer Detailing product, an online, sponsored educational program that will provide the latest drug information -- previously only available to physicians -- to Yahoo! users.

The interesting thing about this concept or product, which I will describe and illustrate in more detail in the September issue of
Pharma Marketing News, is that it can do what TV DTC cannot do -- deliver in-depth information, target a specific audience, interact with the audience, and personalize the message. A very large audience -- upwards of 70 million people -- can be reached through Yahoo! and the other major Internet portal sites and millions of ad "impressions" can be delivered within a matter of days. And it is probably cheaper to do this on the Internet than on TV!

Is the Timing Right?
In previous posts to this blog, I have pointed out several forces that are aligning, which suggests that the time is right for using the Internet to deliver DTC advertising and education:

  1. Consumers are spending more time online and less time on TV
  2. New DTC guidelines call for ads that are more informative, especially about side effects, lifestyle alternatives, and disease awareness. Pharma CEOs are calling for DTC that is more educational (see, for example, "DTC straight Talk"). The general consensus is that TV is not up to the task.
  3. The new DTC guidelines from PhRMA and specific drug companies do not include restriction of DTC on the Internet.
  4. Pharma may be cutting back spending on TV and focusing more on the Internet than they ever did before (see, for example, "DTC in 2005: Old Dogs, New Tricks?" and "Pull Back from DTC on TV?").
  5. Studies are demonstrating that the return on investment (ROI) of Internet promotions are higher than ROI from DTC (see, for example,"eDetailing ROI Better Than DTC?").
I am still skeptical that these trends actually will translate into significantly more spending by pharma on Internet marketing and education (see, for example, "Pharma eMarketing at the Tipping Point?"). There are several obstacles to overcome. I'm just going to focus on a couple here.

The Reach Problem

Pharma marketers are concerned about building awareness through reach. They believe that the Internet is a poor awareness tool -- it's nearly impossible, they say, to reach a big enough audience of a particular segment online without a massive ad campaign across multiple sites (see "
What Stands in the Way of the Mainstream Use of the Internet by Pharmaceutical Companies?").

Jack Barrette, Category Development Officer, Health and Medicine, at Yahoo! begs to differ. I spoke with Jack recently and he cited some numbers that convinced me that Yahoo! has significant reach among Internet users if not the general population.

Barrette, however, concedes that the "instantaneous mass reach of TV is a fairly unique proposition that you have with television. Yahoo! has a huge reach among online users, but our goal is to catch the folks that get interested from TV and continue the conversation. " In other words, a full marketing program should include TV
and the Internet.
But NOT your father's Internet! What Medsite and Yahoo! envision with their cDetailing product is not a web site, per se. It uses the latest technology and educational/motivational methodologies to achieve a very high "rate of engagement." Again, I will have more to say about this in the September issue of Pharma Marketing News.
If it worked before, why change it?
The second obstacle to pharma spending more money on Internet marketing is that many product managers feel that "what worked for my predecessor will work for me." They take their predecessor's budget and tweak the allocation buckets without changing the percentages: so much percent for TV, for print, for detailing, for samples, and for "other." This last category includes the Internet.

However, what worked before is clearly not working now and pharma is beginning to realize this -- being forced to realize it! The formula is broken and they need to fix it. The pharmaceutical marketing juggernaut, however, is like an aircraft carrier -- it may take time to turn it around.

Wednesday, August 17, 2005

Movies and Drugs: Same Blockbuster Mentality

You are probably aware of certain connections between Hollywood and Raritan (the nexus of Pharma's heartland); i.e., between the movie industry and the drug industry.

For example: Brand name drugs are often mentioned in movies such as Viagra in "Somethings Gotta Give." Actor celebrities like Lorraine Bracco (Tony Soprano's psychiatrist in the HBO series "The Sopranos") are often used in drug ads as spokepersons -- a practice I think needs to be curtailed (see "Pfizer DTC Pledge: ED is Litmus Test"). And some actors abuse or put down prescription drugs -- think Tom Cruise.

But maybe the most important connection -- analogy actually -- between these two industries is the blockbuster marketing and sales model that both the Hollywood movies industry and drug industry rigidly adhere to.

I was reminded of this analogy while reading the Financial Page in the August 8&15, 2005 issue of The New Yorker magazine. The author summarized Hollywood's basic strategy: "invest a lot of money in films that have the potential to be blockbusters, target teen-agers as a core audience, and spend enormous amounts of energy and money trying to get people to the theater on the first weekend."

Sound familiar? Except (?) for targeting teen-agers, this is the same strategy followed by the drug industry. Maybe the drug industry does not yet target teen-agers, but it does target a more affluent audience with discretionary income or likely to have good prescription drug coverage.

It's fair to say the drug companies, like Hollywood, invest a lot of money in products that have the potential to be blockbusters. Much less effort and money, on the other hand, are spent on products with less money-making potential such as vaccines (despite the recent ad from Merck, which touted its role in developing vaccines against childhood diseases).

The drug industry's equivalent to "getting people to the theatre" is getting people to the doctor. The industry clearly positions this as the main goal of DTC advertising and says it is a major benefit to consumers who otherwise might not seek medical attention. They fail to mention that if the consumer does not go to the doctor, the drug company does not make money. Same with movies, although I have a much better experience going to the movie theater than to my doctor's office.

The author of The New Yorker article also points out that Hollywood should pay more attention to DVD sales after the movie is released, because this is where the profit really is for the movie industry.

Generics are to the drug industry what DVDs are to the movie industry. After the movie runs its course in the theaters, it enters the DVD market. I am not sure whether DVDs are cheaper than going to the movies, so the analogy with generic drugs may not hold up.

Anyway, the main point is about missing sales after the patented lifetime of the drug. The pharma industry should pay more attention to its DVD sales! Big pharma companies -- the ones who invented the drug in the first place -- should continue to sell the drug as a generic or over-the-counter (OTC) product after the patent runs out. I know this is done in some cases -- at least with OTCs.

You might also say that DVDs are Hollywood's answer to compliance -- making sure the audience keeps viewing the product. Compliance and adherence, as opposed to getting the first prescription, is a major problem for the drug industry, which loses billions of dollars in sales because patients do not remain on treatment as long as they should.

Just as it will be hard for Hollywood to "break itself of the habit of fetishizing opening weekends," it will be equally hard for pharmaceutical companies to break the blockbuster branding and sales model.

For more on alternatives to the blockbuster model, see these articles from Pharma Marketing News and previous posts to this blog: "The New Branding Model: From Blockbusters to Targeted Therapies" and "Evidence-based Marketing."

Sunday, August 14, 2005

Pfizer DTC Pledge: ED is Litmus Test

Pfizer recently announced changes to its direct-to-consumer (DTC) advertising of prescription drugs (see "Pfizer Announces Improvements to Consumer Advertising for Prescription Medicines"). The Pfizer pledge promises improvements before the end of 2005 and is not limited to new products. You may wish to compare this with the Bristol-Myers Squibb "DTC Communications Code" (see "New DTC Principles Emerging"), which applies to newly launched drugs. Pfizer's new rules are consistent with PhRMA's DTC guidelines (see "PhRMA Finalizes DTC Principles"), which were released on August 2, 2005.

I comment below on just a few of Pfizer's pledges that I think are noteworthy, need some more clarification, or fall short. I also anticipate how these rules may (or should) be applied to future erectile dysfuntion (ED)/Viagra ads. These ads will be the litmus test of Pfizer's new commitment to making improvements to its consumer advertisements..

A 6-month "DTC Moratorium"

While the PhRMA guidelines recommend that DTC ads be delayed for a period until physicians are adequately informed about bew drugs, the Pfizer pledge specifies a 6-month moratorium (BMS specified one year, Senator Frist suggested 2 years).

However, I am not sure exactly when this 6-month period is supposed to start. Pfizer pledges to:

Educate physicians about new prescription medicines prior to beginning product TV and print advertising so that doctors can be well-informed about a new medicine before patients start conversations about it. The length of time used for physician education will be no less than six months and will vary depending on the relative importance of informing patients of the availability of a new medicine, the complexity of the risk-benefit profile of that new medicine and health care providers' knowledge of the condition being treated.
This has been interpreted as "a pledge not to advertise new drugs directly to the public for at least six months after they enter the market" (FDLI SmartBrief, an industry news service). Other news outlets also interpret this pledge as a moratorium beginning AFTER drug approval. But as I pointed out before regarding the PhRMA guidelines, the wording does not strictly say "after FDA approval" and Pfizer could comply with this pledge by educating physicians about a new drug months or even years BEFORE it is approved. It is perfectly legal for them to do so using third parties (e.g., CME providers) as long as the drug tradename is not used. Drug companies ALREADY support this physician education about "new treatments" coming down the pike PRIOR to the actual launch of the product.

Another hint is the use of the word "educate", which the industry now separates from branded detailing. That is, when they say "educate," it often means non-branded "continuing medical education" carried out by their professional services people rather than sales reps.

However, since no one else is interpreting it this way, I'll just go with the flow, read between the lines, and assume that Pfizer means that this physician "education" will happen AFTER the drug is approved. It would be good if Pfizer added the words "after launch" or "after approval" so that we don't have to read between the lines!

Disease Awareness and Compliance Focus

The second Pfizer pledge that I find unique and interesting is the promise to "invest a meaningful amount -- on par with what it spends on a branded advertisement campaign" to create non-branded ads such as disease-awareness ads and compliance ads. This only applies in 2006, however. Anyway, it's better than nothing.

According to TNS Media Intelligence data quoted in the Wall Street Journal article "
Pfizer to Promote Health Awareness," Pfizer spent more on DTC advertising in 2004 ($667,815,000) than any other pharma company. If this budget is split between branded and non-branded DTC in 2006, then Pfizer will be making a substantial contribution -- at least a quarter of a billion dollars -- to its disease awareness and compliance effort.
NOTE: These numbers may vary. Pfizer is clearly cutting back its DTC spending. For the first 5 months of 2005, Pfizer spent only $187,985,000 on DTC. At that rate it will end up spending only $451,164,000 in 2005, about 35% less than it spent in 2004. If that rate of decline were to continue into 2006, Pfizer would only spend about $300,000,000 on DTC in 2006 ($150,000,000 for non-branded DTC). However, you have to factor in that much of the decline in ad spending in 2005 may be due to the fact that Pfizer agreed not to advertise Celebrex or Bextra.
It's Good to be the King!
Even though non-branded ads will benefit competitors with drugs that treat the same conditions as Pfizer's drugs, most of the benefit would go to the market leader -- i.e., Pfizer. As pointed out by the WSJ: "Pfizer has leading drugs in many disease categories, such as Lipitor for cholesterol, that would stand to gain a larger share of any increase in prescriptions prompted by increased disease awareness."

ED is the Key

The litmus test for all these promised changes in DTC advertising is how the new rules are applied in the erectile dysfunction (ED) market.

I eagerly await Pfizer's disease awareness ads in this category. Will there be illustrative animations such as the ones we often see explaining overactive bladder?

The Web site has a very good video explanation of ED. While it does not include an animation, it's a pretty good explanation of what ED is and how Viagra works. ( may have more information, but it's not animated; has text only.)

Of course, now we will see ED drug ads only during appropriate shows -- Pfizer says " all [ED] TV ads will be aired during programs that have more than 90 percent adult viewership."

I'd like to see a list of those shows, which I suspect are few and far between. I can think of only 3 shows that qualify: reruns of "Sex and the City," BassMasters, and the senior PGA golf tournament. Definitely out of the mix will be sports shows like baseball and football - right?

Use of Celebrity Spokespersons

In its announcement, Pfizer specifically called attention to its "Why Live With Depression" campaign that featured actress Lorraine Bracco (Tony Soprano's psychiatrist in the HBO series "The Sopranos") as a model for what it plans for its new disease awareness emphasis. Clearly, the new rules do not put a stop to this practice, which was criticized when Dorothy Hamill was used to promote Vioxx.

I noted above that Pfizer, according to its own rules, should not be running Viagra ads during the World Series or Super Bowl or any other sport event (other than perhaps the senior PGA tournament) -- because kids watch these programs. However, nothing in Pfizer's pledge will prevent it from promoting Viagra
at sports events such as Nascar races. Nor will the new rules prevent the use of sports celebrities as spokespersons.

Senator Frist, in his statement about DTC advertising (see "
Deconstructing Frist on DTC"), has frowned upon these practices. So it may behoove Pfizer to tread carefully using the sports connection. How about replacing the branded Mark Martin Viagra race car with an unbranded ED car? Yeah, that'll work!

Thursday, August 11, 2005

Internet Marketing: Risks Ahead

In an Ad Age story ("
Marketers Wrestle with Hard-to-Control" Web Content") doubt is cast upon the wisdom of advertising on blogs because such consumer-controlled Internet venues "cannot be controlled." The corollary, of course, is that non-consumer-controlled venues CAN be controlled! (More on that below.)

Pharmaceutical companies and marketers are control freaks of the most extreme sort. Some advertising consultants to the industry have even suggest that it may be time for pharma to punish egregious media offenders -- e.g., CBS's 60 Minutes news magazine -- by cutting back on their advertising. I have argued that such tactics are foolhardy (see, for example, "
Separation of Church and State").

The industry, it seems, actually is cutting back on its TV DTC advertising (see "
Alternatives to DTC, Part 1" and "Pull Back from DTC on TV?"). This probably has more to do with reigning in DTC budgets than punishing pharma-bashing TV networks.

Most experts seem to think that Pharma will shift ad spending from TV to the Web. A survey of industry executives -- the "2004 DTC Industry Checkup" (see "
DTC in 2005: Old Dogs, New Tricks?") -- concluded:
"The majority [of experienced industry marketing executives] will dramatically decrease spend on mass media in 2005, turning instead to e-marketing and other patient relationship media."
Such a shift makes sense on many levels. For one thing, consumers are turning away from TV and going to the Internet more and more for credible health information. According to a poll sponsored by the Medical Broadcasting Company, 42% of respondents state online health information trustworthy compared to 16% for "offline"’ media like TV, newspapers, radio and magazines (see "INTERNET OVERWHELMINGLY VIEWED AS MOST TRUSTWORTHY MEDIUM FOR HEALTH INFORMATION ACCORDING TO NEW CONSUMER SURVEY").

By focusing more on Internet marketing, the pharma industry can help solve two of its most vexing problems: a decrease in return on investment (ROI) and lack of credibility. That's because ROI for TV DTC is declining and TV DTC has had a negative impact on pharma's reputation and credibility. Compared to TV, therefore, the Internet looks like pharma marketing Shangri-La.

However, the pharmaceutical industry must be careful about using the Internet for marketing. It comes with a whole new set of problems. There is the issue of control that I mentioned above. Paraphrasing the immortal words of Jack Nicholson in the movie "A Few Good Men": "You want control? YOU CAN'T HAVE CONTROL!!!"

I mean, if you thought you had control over TV -- you really don't -- you will have even less control over Internet venues. So, forget control.

Control over maverick Internet sites is an old issue anyway. Way back in 1997, I founded the non-profit
Internet Healthcare Coalition and led the development of the e-Health Code of Ethics in 2000 to address this very issue. Not only is it important for pharmaceutical marketers to trust the Internet, it is also important that consumers trust Internet health Web sites. I am happy to hear, therefore, that the Internet has so much credibility these days with health consumers.

In the field of Internet marketing, the single most important thing to remember is Privacy, Privacy, Privacy.

Effective Internet marketing entails using interactivity and personalization and these require collecting and using personal information. E-mail is the most sensitive area and there are stringent federal laws that must be obeyed (see, for example, "What You Need to Know About the New 'CAN-SPAM' Law" and "E-mail Marketing Best Practices for Pharma").

Privacy issues may stymie pharma marketers use of the Internet and could be the next big Wall Street Journal front page pharma story. Pharma companies need to be VERY careful here, especially with regard to the agencies and consultants they use to run their Internet marketing campaigns.

If pharma unleashes its agencies upon the Internet, I have this bit of advice: MAKE SURE THEY ARE PRIVACY CERTIFIED and have the appropriate safeguards, policies, procedures, and TRAINING in place to handle sensitive consumer data. (AD: See "Privacy Assessment Services for Pharma Vendors" offered by
VirSci Corporation).

Because, if you thought TV DTC put your you-know-what through a wringer, wait until you become the focus of Internet backlash! (In fact, you don't have to wait: see "
The FTC-Lilly Consent Decree: What it Means for PHARMA Vendors and Partners").

Bloggers Worry Pharma More Than FDA

Billy Tauzin, CEO of PhRMA, the US drug industry trade group, laid into the FDA's proposal for a Drug Watch site (see "FDA Drug Watch Site Guidelines") according to a Reuters story ("Drug Makers Object to U.S. Plan for Early Warnings").

Most of Tauzin's comments are predictable: According to Tauzin, the site

  • could lead to unnecessary confusion and "irrational fears" about medicines,
  • would be "too vague and preliminary to be of any value in making informed treatment and prescribing decisions," and
  • may exceed the FDA's authority.
But, Tauzin added, "I'd rather have them (FDA) doing it than some blogger" on the Internet.

I am not sure how to interpret this comment.

On the one hand, Tauzin may be more worried about what bloggers do than what the FDA may do. On the other hand, Tauzin may be putting bloggers down. It all depends on which bloggers he's talking about.

He may be talking about patient bloggers writing about their experiences with Rx drugs, in which case he should be more worried about bloggers than about the FDA. These bloggers have as much, if not more, credibility with the public as does the FDA. That's due to the power of "buzz marketing" combined with the public's current low rating of the FDA's credibility.

Tauzin, however, may be talking about professional bloggers/critics like me who read his comment this way: "I'd rather have the FDA doing it than some scum of the earth pharma pundit on the Internet." I think I could be classified in that category of blogger ;-)

In any case, I happen to agree with Tauzin's first two objections. That's why I made a suggestion to the FDA on how they can improve their concept of the Drug Watch site. Namely, I proposed that a Drug Risk Advisory System be implemented through the
Drug Watch web site (see "A Proposal for a Drug Risk Advisory System"). This, I believe, would take care of the first two of Tauzin's objections mentioned above.

As for the last objection, which PhRMA almost always raises -- i.e., FDA would be exceeding its authority -- only Congress can (and may) take care of that.

P.S. If you want to learn more about how blogging is affecting pharma and vice versa, take a look at the PharmaBlogging conference that I will chairing and speaking at.

Tuesday, August 09, 2005

Alternatives to DTC, Part 1

Recently, the following items have appeared in my radar screen:
  1. Last week I was visited by two entrepreneurs who showed me a wireless PC device they plan to put into doctors offices for pharma-sponsored patient information. Coincidently(;-) someone posts an inquiry to the PHARMA-MKTING online discussion forum about putting an interactive device in front of hospital inpatients (think of the device as like a laptop with wireless LAN), the purpose of which is to put patient education content and targeted patient advertising (as well as entertainment content) on the device.
  2. An article in today's Wall Street Journal ("For Mild Depression, Some U.K. Doctors Prescribe Reading") talks about empowering patients with information rather than drugs (they coined a new phrase for this: "bibliotherapy").
  3. Recent "Guiding Principles" from the pharmaceutical industry suggest that DTC advertising mention non-drug alternatives such as diet, exercise and other lifestyle changes and that pharma companies should do more to promote health and disease awareness (see "PhRMA Finalizes DTC Principles").
  4. I just finished reading an advance copy of the book "Generation Rx," which claims that Americans are overmedicated and advocates more disease awareness campaigns and adoption of healthy lifestyles by Americans.
All this attention to "disease awareness," "bibliotherapy," and the dangers of "polypharmacy" vs. healthy lifestyle is a direct result of the backlash against direct-to-consumer (DTC) advertising of drugs.

No doubt, DTC TV advertising is losing its appeal to the pharma industry as a result of the VIOXX debacle. Reports were circulating back in May that pharma would be cutting back on TV DTC ad spending (see "
Pull Back from DTC on TV?"). Recent numbers confirm that TV DTC budgets were decimated in the first quarter of 2005 (see "Drugmakers cut back on television ad spending"): "The industry spent $388.5 million on consumer drug ads on network TV in the first quarter, down about $44 million from last year, says Nielsen Monitor-Plus."

The Disease Awareness Alternative
Some experts think that the "upside" is that money not spent on TV DTC will be looking for other places to go -- and probably not to drug company investors or to patients in the form of lower drug prices. Under the new guidelines from PhRMA, the money may go to disease awareness campaigns, which are best done through the Internet or print.

Devices such as the web-enabled wireless tablets mentioned above, which can deliver web-based sponsored pharma disease awareness content, may get a boost if pharma has an extra $400 million or so per year to invest in alternatives to TV DTC.

The "Bibliotherapy" idea, which encourages doctors to recommend "self-help" books to patients with mild depression rather than drugs, is not a totally new idea. Back in the "dotcom era" many health web sites endorsed the idea of physicians "prescribing information" as well as drugs. In 2003, the state of Georgia and the National Library of Medicine implemented a Health Information Prescription pilot program (see "
The Health Information Prescription").
Doctors often prescribe medication after seeing a patient. But what if that doctor also wants to direct the patient to up-to-date, reliable, consumer-friendly information about a health question? Under a pilot program to be launched in Georgia March 18th, physicians all over the state of Georgia will be able to do just that.

The American College of Physicians-American Society of Internal Medicine Foundation (ACP-ASIM Foundation) has teamed with the National Library of Medicine (NLM), an arm of the National Institutes of Health, to create the "Health Information Prescription" program.
Now, doctors throughout Georgia will have customized prescription pads that they can use to point patients to first- rate online health information in NLM's MedlinePlus database (
Prescribing information instead of drugs, however, is a new idea, which resonates with Greg Critser, the author of the aforementioned book, Generation Rx (I will be reviewing this book in a future post). Critser believes that Americans are overmedicated, especially with anti-depressants and especially children.

So, will we be seeing more ads about erectile dysfunction (ED), what causes it, and who is likely to have it? I wouldn't hold my breath. Marketing departments will still be in control of disease awareness spending and the marketing of ED treatments has more to do with performance enhancement than with treating ED. The target audience of "performance-enhancement junkies," epitomized by Rapheal Palmiero ("Seems that Viagra wasn't the only performance-boosting drug Palmiero took." - Barron's), are not interested in disease awareness messages.

Friday, August 05, 2005

Reminder Ads - Pharma's Dodo?

PhRMA's New "Guiding Principle" #10 for Direct-to-Consumer Advertising states:
"DTC television advertising that identifies a product by name should clearly state the health conditions for which the medicine is approved and the major risks associated with the medicine being advertised."
This, as other commentators have noted, would eliminate "reminder ads" that promote a drug by name but do not mention the indication or side effects (see Pharma Marketing Glossary for a more extensive definition).

I didn't think this was such a big concession by pharma when I reviewed the guidelines a couple of days ago (see "
PhRMA Finalizes DTC Principles"). Since then, however, several news items and comments from pharma experts have characterized this as a "meaningful" step in the right direction.

Traditional "media types" or TV advertisers love reminder ads because, in their view, they raise "frequency" without costing a lot. (It's called GRP or "Gross Rating Points" extension; GRP is "[calculated] as a percent of the target market reached multiplied by the exposure frequency. Thus, if you get advertise to 30% of the target market and give them 4 exposures, you would have 120 GRP." (Thanks to

The frequency advertising technique is not as effective as it once was (see, for example, "
Out-of-the-Box Marketing: Will It Work for Pharma?" There I review Seth Godin's book "Permission Marketing: Turning Strangers Into. Friends And Friends Into Customers", which is critical of the traditional Reach and Frequency model of advertising.)

I find it interesting that some pharma marketing professionals and journalists are making such a big deal of Principle 10. This may be because reminder ads are often thinly disguised full-blown product ads without the messy fair balance requirement.

Reminder ads are just too tempting for pharma companies to use to make claims about the efficacy of the products without mentioning side effects. In April of this year, for example, the FDA ordered a Levitra "reminder" ad off the air essentially because it was not a reminder ad at all! (See "FDA orders Levitra ad off the air").

The ad featured a flirtatious actress asking "In the mood for something different?...[Levitra] is the best way to experience that difference."

The FDA interpreted this as making a superiority claim for the treatment of erecticle dysfunction and said "FDA is not aware of substantial evidence or substantial clinical experience demonstrating that Levitra is superior to other (erectile dysfunction) treatments." FDA says that reminder ads can only call attention to a drug, not say how to use the drug or how well it might work.

So let's hope that reminder ads will go the way of the dodo and thereby eliminate another loophole for "push-the-envelope" marketers to exploit -- to the detriment of the pharmaceutical industry's image!

Wednesday, August 03, 2005

PhRMA Finalizes DTC Principles

The US pharmaceutical trade association, PhRMA, finalized its "Guiding Principles" for TV and print direct-to-consumer (DTC) advertising yesterday (see "AmericaÂ’s Pharmaceutical Industry Announces Guidelines on Direct-to-Consumer Advertising" for the announcement; the principles themselves can be found here).

The Wall Street Journal reported that "Twenty-three companies -- including Eli Lilly & Co., Merck & Co., Schering-Plough Corp., Pfizer Inc. and GlaxoSmithKline PLC -- have said they would adhere to the principles." (See "Drug Industry Creates Voluntary Ad Guidelines").

I first reviewed these principles before they were finalized and noted some drawbacks (see "PhRMA Rules Come Up Short"). Now that I have the details, I will revisit my comments and expand upon them.

PhRMA had been working on these "guidelines" for some time and as recent as 2 months ago a knowledgeable person told me not to expect final release of the guidelines any time soon. My source indicated that there was a lot of differences of opinion among member companies.

This all changed when Sen. Frist called last month for a 2-year moratorium on DTC advertising (see "Deconstructing Frist on DTC"). That really put a fire under PhRMA hotter than any Democrat could. As Billy Tauzin, head of PhRMA, stated in a WSJ video interview: "Senator Frist was right. And I want to thank him for adding a lot of momentum to the effort to begin changing the [drug] ads in America."

I don't think I've ever heard a PhRMA representative admit a senator was "right" especially when that senator says things like "They [DTC ads] create an artificial demand. And they drive up our nation's overall health care costs. They needlessly and wastefully rive up your health costs." PhRMA has steadfastly argued that there is no evidence that DTC ads drive up health care costs.

Anyway, let's forgive Tauzin this
faux pas and move on.

In a nutshell (OK, coconut shell), here's my major gripes with the PhRMA guidelines (in no particular order of importance):

Guidelines Have No Teeth?
The principles are only "guidelines" and not stated as rules that companies will strictly abide by voluntarily. There's lots of leeway allowed for individual companies to interpret the guidelines as they see fit. Competition will certainly mean that companies will "push the envelope" and come up with creative ways to "adhere" to the guidelines.

The guidelines do include an interesting self-regulatory mechanism -- an "office of accountability" that PhRMA will establish. The general public and health care professionals can submit comments about DTC to this office and PhRMA will pass them along to member companies and to the FDA as well as issue "periodic reports" to the public regarding the comments and company responses.

It doesn't appear, however, that the comments themselves will be made available to the public. We might need a "PhRMA Freedom of Information Act" to get that (LOL).

Of course, you can always tune in to this blog site and get my comments as well as comments form my colleagues in the PHARMA-MKTING online discussion group.

Limited to TV and Print
The guidelines only apply to TV and print advertising and not to Internet advertising. Perhaps the industry puts the Internet into a different bucket that it considers "non-advertising."

Online marketing experts have already seized upon this and hope that restrictions on TV and print will mean more work for them. This remains to be seen.

DTC Moratorium Sidestepped
The principles sidestep the issue of a DTC moratorium and do not guarantee that physicians and public health officials will get real world experience with a drug BEFORE DTC ads appear. Principle 6 merely states "companies should spend an appropriate amount of time to educate health professionals about a new medicine or a new therapeutic indication before commencing the first DTC advertising campaign."

This is well and good, but it does not implement anything new. Typically -- and I speak from personal experience -- pharmaceutical companies do a lot of physician "education" BEFORE a drug is launched. This education can begin 2 years prior to launch. During the prelaunch phase pharma companyny can only refer to the drug by its scientific name (e.g., sildenafil citrate) rather than the trade name (e.g., Viagra).

Consequently, Principle 6 will allow a pharma company to "educate health professionals" well in advance of the launch of a product and then begin DTC advertising as soon as the product is launched (when DTC advertising becomes legal).

The whole idea of a DTC moratorium is to limit DTC AFTER launch. That way physicians -- educated or not -- and public health agencies and FDA can get some real world experience with the drug. Prior to launch, a drug may have only been tested on a few hundred or a couple of thousand CAREFULLY CHOSEN volunteers. Only after launch, when the drug is prescribed to the general population, will the drug be used by individuals who might be prone to side effects not evident in clinical trials or not frequent enough to be picked up in clinical trials.

Tauzin, on the other hand, claims that "everything that can be known about the drug is presented to the FDA ... good, bad, and ugly" and that that clinical trials reveal this information. This is patently false as the VIOXX case demonstrated.

Tauzin, however, claims that in only 3% of the cases do you learn "more about the drug" after it gets released to the general public. He clarified this by saying "only 3% of drugs approved by the FDA end up having a problem where we learn something new about them" requiring changing the ad campaign or pulling the drug form the market.

Frist, Get Your Gun
I wonder if Frist will stick to his guns and continue to demand a moratorium such as he proposed. The WSJ reported that "While Sen. Frist said he "welcomed" the industry's effort to revamp its advertising practices, he urged individual companies to consider the two-year moratorium." He has also said that "If these voluntary restrictions [including his moratorium idea] don'’t do the job, I believe Congress should act." We'll see.

Tauzin, BTW, doesn't want to say that Congress shouldn't act, but he repeatedly said "We're in a free speech area" during his WSJ video interview. This, as I pointed out before, is how PhRMA and its allies will hamstring the FDA (see, for example, "WLF Watches FDA Watching Drug Ads").

Submit DTC Ads to FDA
Principle 8 states: "Companies should submit all new DTC television advertisements to the FDA before releasing these advertisements for broadcast."

First, I note that this principle applies only to TV ads, not print or Internet ads.

Secondly, it does NOT state that the companies should wait for FDA
approval before running the ad and it does not specify any set amount of time to give the FDA for review prior to running the ad -- the Q&A does suggest that companies give the FDA "a reasonable time in advance of first use to give FDA the opportunity to comment, consistent with its priorities and resources."

IMHO, Principle 8 has a loophole big enough to drive a Mack truck through!

Treatment Options
Principle 1 says that a benefit of DTC advertising is that it "[educates] patients about treatment options" and Principle 9 states: "DTC television and print advertising should include information about the availability of other options such as diet and lifestyle changes where appropriate for the advertised condition." Of course
, the only treatment option presented in a DTC ad is the advertised drug, never OTC products or competitors' products.

Risk Information
Principle 11 addresses the issue of communicating risk in TV DTC ads: "Specifically, risks and safety information in DTC television advertising should be presented in clear, understandable language, without distraction from the content, and in a manner that supports the responsible dialogue between patients and health care professionals."

Tauzin has said "You will see a change in the [current] ads." Instead of "mumbling" side effects at the end of ads, says Tauzin, "the [side] effects are going to be talked about in the ad." Hopefully, the type of ad pioneered recently by J&J will act as a model (see "DTC Straight Talk").
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