Monday, October 31, 2005

DTC Regulation: Trick or Treat?

At a post-Halloween public hearing this week, the FDA will be soliciting public commentary about several direct-to-consumer (DTC) advertising techniques employed by pharmaceutical marketers. This process is scary to some pharma marketers who fear a new round of DTC regulations from FDA. This trick, however, may have been forestalled by PhRMA's treat: its Guiding Principles for DTC, which were revealed in August (see FDA May Follow PhRMA's Lead on DTC).

I will be attending this meeting and will report here on what, if anything, I learn (see "
FDA May Follow PhRMA's Lead on DTC" for more information about this meeting).

Survey
Meanwhile, for about a month now,
Pharma Marketing News has been hosting a survey of subscribers and other pharma marketing professionals to get their opinions on the issues the FDA will be discussing at the upcoming public hearing.

Just a few of the questions being asked in this ongoing survey:

  • How good a job are pharma marketers currently doing to educate consumers about diseases in DTC advertisements in the following media?
  • What is the potential role of reminder ads in all types of consumer promotion, such as broadcast, print, and the Internet?
  • How good a job are pharma marketers currently doing to educate consumers about communicating risks in DTC advertisements?
  • In your opinion, does the use of celebrity endorsements or actors playing doctors in DTC ads mislead consumers about the risk-benefit tradeoffs of prescription drugs?
I summarize below some of the preliminary results from this survey. This is NOT a scientific survey and the results should not be generalized to estimate the views of all pharma marketers. (Click here if you wish to participate in this survey.)

Is DTC Educational?

As you may know, PhRMA (the industry's trade association) and professional pharmaceutical marketers in general believe that DTC advertising is educational (e.g., Pfizer CEO McKinnell wants to call it "Direct to Consumer Education" rather than advertising; see "
McKinnell's Mea Non Culpa").

No doubt DTC ads educate consumers about Rx products, but how well do they educate consumers about the conditions that these products treat? This is where I have focused much of my criticism in the past (see, for example, "
Is DTC Educational or Motivational?"), so you know what I think. But, you might be surprised by the opinions of marketing professionals.

Much of the focus on DTC really concerns ads run on TV. But other media are also used by the pharmaceutical industry to promote their products to consumers, including radio, print and the Internet. I was curious how the educational merit of DTC depended on the medium and this was the first question asked in the survey.


Internet Is Best Medium for Education

A large majority of respondents (66%) believed that pharma marketers did an excellent or good job via the Internet educating consumers about diseases treated by the products. In contrast, only 22% felt the same way about TV commercials.


One example of bad educational TV DTC ads is the promotion of ED Drugs (Viagra, Cialis, Levitra). The TV ads say absolutely nothing about erectile dysfunction, who may be "at risk" for developing it, what causes it, etc. On the Internet, however, all this is explained very nicely (at least on the drug.com sites) -- complete with pictures and "circles and arrows .... on the back of each one explaining what each one was" (pleas excuse obscure reference to Arlo Guthrie).


It's a shame, however, that drug companies spend such a miniscule portion (ranges from 1% to 10%) of their consumer marketing budget on the Internet. Some pundits believe that restrictions on TV DTC advertising will lead to much more use of the Internet. Maybe, but if history is any indication of the future (as your stock broker would have you believe), I would not hold my breath.


[NOTE: TV ads can't cover everything in 30 or 60 seconds and some ads do a better job than others explaining the medical condition, especially if the condition is not well recognized. ED ads could at least have a voice over directing viewers to the Web sites where they can learn more about ED.]


Back to the survey (which I will look at in more depth in an upcoming article in
Pharma Marketing News).


Branded vs. Non-Branded Ads

The survey asked people about non-branded ads such as disease-awareness ads and compliance ads -- should the pharma industry as a whole adopt Pfizer's policy (beginning in 2006) to "invest a meaningful amount -- on par with what it spends on a branded advertisement campaign" -- in non-branded ads?


Fifty-six percent (56%) of respondents said "Yes", 33% said "No" and the rest had no opinion.


There is at least one fly in this ointment that was pointed out by a respondent:

"Does this mean non-product branded or non-corporate branded, or both? If both, that's charity, which may or may not be acceptable to shareholders. Otherwise, one might argue that the spend is for corporate "goodwill," which may be a good idea in good times, but may not be sustainable in the face of business downturns. Making a fixed commitment to spend equal amounts of money to promote product branded ads and "non-branded ads" might be good politics in the current environment but is not, in my opinion, very good public health or corporate policy."
Indeed, Pfizer does NOT pledge to spend all that extra money and resources solely on "disease-awareness ads," nor does it pledge to do so forever. What Pfizer does say is:

"In 2006, Pfizer will invest a meaningful amount—on par with what it spends on a branded advertisement campaign—to:
  • Create more disease awareness with advertisements that do not mention a product, such as the recent 'Why Live With Depression' campaign that featured actress Lorraine Bracco.
  • Address other important public health issues such as health literacy, compliance or improving the patient/physician relationship through additional non-product advertising.
  • Continue our dedicated advertising campaign and efforts to promote 'Pfizer Helpful Answers.' "
So it seems there's going to be quite a bit of corporate goodwill ads thrown in the mix.

Celebrities in Ads and in Buzz-Generating Venues

It's interesting that Pfizer mentions the use of celebrities in its ads -- this practice will also be examined by the FDA at the public meeting (see "
Celebrities & Buzz Revisited").

The
Pharma Marketing News survey asked the following question regarding use of celebrities:

"In your opinion, does the use of celebrity endorsements or actors playing doctors in DTC ads mislead consumers about the risk-benefit tradeoffs of prescription drugs?"


Fifty percent (50%) of respondents said "Yes" and 33% said "No."
Some comments from respondents:
"This is a grey area--Dorothy Hamil for Vioxx is a classic example of misuse of celebrity endorsements, but I can envision applications which are not misleading."

"Celebrity endorsements or actors playing doctors is a form of fake advertising that should be banned."

"If all key strategic content, disease awareness, disease prevention and product benefits and risk, are handled properly, then the use of celebrity endorsements can make a good ad more effective."

"Here, the risk-benefit trade off should be considered: How much risk the consumer takes by consuming the advertised drugs (based on the celebrity endorsement)and the benefit the company gets on account of boost in sales this is very crucial in that consuming a particular brand of soap because it is endorsed by your favourite star is definitely less risky than doing the same with a prescription drug (without considering indications, side effects etc.)"

"Mass marketers, social marketers and the government itself, all use celebrities to attract attention to their messages and causes. There is nothing "misleading" about that. Communication of information concerning risk-benefit tradeoffs of prescription drugs is a separate issue. If the message is an appropriate one (the key issue), the use of celebrities only enhances thlikelihoodod that it will be heard through the clutter."
Transparency is the Real Issue in Celebrity Endorsement
For me, the real issue is: Should celebrities who are paid to promote a product or talk about a disease mention this fact when they are interviewed on talk shows and in other situations that are assumed to be non-commercial in nature? In these situations, consumers are expecting honest, unsolicited opinions, not opinions paid for by pharma companies. It doesn't really matter if the celebrity truly believes what he or she says, potential conflicts of interest should be revealed.

That's it for now. Hope to see you in DC!

Thursday, October 27, 2005

Tobacco & Drugs: Strange Bedfellows

Quick! What does the tobacco industry and drug industry have in common?

Yes, they are both among the most distrusted industries in the US today. It's a sad fact often cited by industry experts who shake their heads in wonderment (see, for example, "
The Empire Strikes Back").

But that association is pure happenstance. There is really no connection or commonality among these two industries. After all, one industry's products destroy our health, the other restores it.
In the future, however, there may be ties between Big Tobacco and Big Pharma.

As reported in today's Wall Street Journal ("
Rx From Marlboro Man") Phillip Morris -- the Marlboro people -- are quietly laying plans to partner with the pharmaceutical industry to deliver drugs. Specifically, Chrysalis -- a business unit of Phillip Morris -- is developing a device designed to deliver a smoke-like mist deep into the lungs. The mist can be composed of nicotine or it can be a drug to treat asthma, pain, etc. Phillip Morris needs a drug company partner "to share the cost and burden of the clinical trials required to secure Food and Drug Administration approval for the device," according to the WSJ.

It's actually a pretty cool device that is more effective than inhalers currently in use by the pharma industry. According to the WSJ:

Philip Morris believed its device, which was designed to deliver a smoke-like mist deep into the lungs, was more efficient at releasing particles tiny enough for deep penetration. Company scientists figured it would appeal to patients who had trouble using traditional inhalers, which require them to push a button and breathe in at the same time. To use Philip Morris's device, they would need only to breathe in as if they were drawing on a cigarette. That allowed for "more consistent and effective dosing," said a Philip Morris scientist in a 1998 memo on the subject. That claim is plausible, according to two independent scientists who say they have discussed the device with the outside researcher testing it for Philip Morris.

Also, tests showed the device could deliver as much as 90% of drug doses into the lungs, compared with as little as 10% for traditional inhalers.
Here's how it works:



The technology of the device was born out of the need to deliver nicotine without smoke! According to the WSJ:
Philip Morris USA's bid to diversify into pharmaceutics, the science of preparing and dispensing drugs, was born of one of its most notable failed attempts to cope with the backlash against smoking. In 1986, Philip Morris set out to create a tobacco-free smoking product that would deliver the nicotine dose that smokers crave.
In 1994, Dr. David Kessler -- at the time commissioner of the FDA -- commented that "Some of today's cigarettes may, in fact, qualify as high technology nicotine delivery systems that deliver nicotine in precisely calculated quantities -- quantities that are more than sufficient to create and to sustain addiction in the vast majority of individuals". Kessler argued that cigarettes should be regulated by the FDA as drug-delivery devices. Coincidently (?), Phillip Morris hit pay dirt in 1994. "It invented a device it called a capillary aerosol generator, which heats liquid as it is forced through a thin tube. When the liquid boils, a jet of fine vapor shoots out. When the vapor hits cooler air, it condenses to form a dense mist." (WSJ)

Could Kessler's inquiries have inadvertently given Phillip Morris the idea for the device?
We will never know.

Meanwhile, the initiative "has thrust Philip Morris across the battle lines of the war between the tobacco industry and public-health advocates. Longtime foes of the nation's No. 1 cigarette maker are suddenly grappling with an unfamiliar question: Should Philip Morris be treated as a force for good?"


Many medical societies and journals prohibit accepting money from tobacco companies or publishing articles funded by tobacco companies. This could put any potential drug partner (e.g., Isis Pharmaceuticals) in an uncomfortable position viz-aviz physician groups opposed to helping tobacco companies make a profit. According to the WSJ:

Isis Pharmaceuticals Inc. of Carlsbad, Calif., which is developing an asthma drug it wants to offer in aerosol form, is among the companies considering the device. Chief Executive Stanley T. Crooke says Isis is weighing whether to select Aria as the inhaler device to deliver the asthma drug. Dr. Crooke, former president of research at SmithKline Beckman Corp., now part of GlaxoSmithKline PLC, devoted part of his career to the development of anticancer drugs. Although he would have serious qualms about working for a tobacco company unit, he says, he will not reject a promising new technology simply because of its origins in the tobacco business.
OK, but Will It Play in Peoria?

Wednesday, October 26, 2005

Pitts on DTC and Older Americans

Peter Pitts, senior vice president of global health affairs at Manning Selvage & Lee (a PR firm with many pharmaceutical clients), former FDA Associate Commissioner for External Relations, and fellow blogger (see DrugWonks), is an unabashed defender of the pharmaceutical industry and opponent of drug re-importation. At the recent CBI Forum on Customer Relationship Management (CRM) for the Bio/Pharmaceutical Industry in Princeton, New Jersey, Pitts was preaching to the choir and defending DTC advertising.

Lack of DTC Breeds Mistrust?
Pitts started his presentation by referring to polls purporting to show that "older Americans" are "more distrustful of the pharmaceutical industry than the general population." [The only poll I came across was a 2000
Kaiser Family Foundation survey that found: The elderly were less likely than the non-elderly to trust [drug] advertisements (35% vs. 51%).] Why is this? Pitts asked.

Pitts dismissed factors such as:

  • "familiarity breeds contempt" (i.e., seniors take more medications than younger people). Older Americans are more likely than their younger counterparts to regularly use prescription drugs. According the Kaiser Family Foundation survey: Americans over age 65 are much more likely than adults under age 65 to say that they are regular prescription drugs users (82% vs. 49%); that they take three or more prescription drugs regularly (55% vs. 17%); that they currently have more than five drugs in their medicine cabinet (40% vs. 28%); and that they spent $1000 or more out-of-pocket on prescription drugs last year (19% vs. 6%).
  • the AARP's "Jihad" (his term) against Big Pharma (funny, I thought AARP did Big Pharma a Big Phavor by supporting the Medicare Modernization Act, Part D), and
  • price/value debate (another presenter suggested that all seniors, like his aunt who flew first-class to a family reunion, had enough money not to quibble about a few bucks here and there). According the Kaiser Family Foundation survey mentioned above: Among the elderly 16% say they have not filled a prescription because of the cost, about 1 in 5 (21%) say they have had to give up things to buy prescription drugs, and 9% say they have had to give up basic necessities like cutting down on food to pay for their medicines. And, 23% of the elderly say that paying for prescription medicines they need for themselves or their families is a "serious problem."
No, the main reason, Pitts claimed, was that older Americans grew up in the age before DTC. His implication being that DTC empowers consumers with information and that this information helps them understand better the risks as well as the benefits of drugs. Older Americans, not having the benefit of DTC in their formative years, are just too dependent on their "learned intermediaries" (i.e., doctors) and don't know enough to trust pharma and challenge their docs if necessary.

The argument is: Lack of DTC leads consumers to distrust "the miracles that are modern medicines" (Pitts repeated this phrase several times).


Of course, this is not a scientific or even logical argument. I could argue just as convincingly that DTC ads cause younger Americans to trust Big Pharma more (and their doctors less) than older, wiser Americans do. Besides, most DTC ads I've seen on TV and in print are definitely aimed at older Americans. After all these years of being exposed to DTC targeted to them why haven't older Americans become more trustful?


[I would note that PhRMA's Guiding Principles for DTC clearly places more emphasis and trust in the doctor as a valued learned intermediary than does Pitts. See "
PhRMA Finalizes DTC Principles."]

Pitts had a lot more to say about DTC that I plan to summarize in a future issue of
Pharma Marketing News.

Tuesday, October 25, 2005

The Empire Strikes Back

Mike Pucci, Vice President of External Affairs at GlaxoSmithKline, is a man with a mission, which is to get the word out about the good that the pharmaceutical industry is doing (or, as Pucci expressed his goal: to "Restore the reputation of the industry by communicating the value of our products, our research and our hope for the future"). He spoke yesterday at CBI's 8th Original Forum on Customer Relationship Management (CRM) for the Bio/Pharmaceutical Industry in Princeton, New Jersey.

Industry RepThe pharmaceutical industry's reputation has declined dramatically over the years (see chart on left showing Harris Interactive survey of 1,000 registered voters).

Pucci believes the industry has just sat back and "taken it" and like the frog sitting in a tepid pot of water slowly being heated, the industry has acclimated itself to the increasing heat of negative publicity.


The pharma industry, says Pucci, needs to recognize that the climate around it is changing and it better get out of the pot!


"The consequences of having a reputation nearly as bad as the tobacco industry," says Pucci, "are threefold:

  1. Litigation
  2. Legislation
  3. Regulation"
Ordinarily, I would consider Pucci's mission a lost cause, akin to pissing in the wind. That's because all the good intentions and actions of people like Pucci are negated by shenanigans like PhRMA's Terrorist Plot!

In this case, however, I agree with the main tenet of Mr. Pucci's strategy -- engage employees to spread the word by talking positively, sharing what they are doing, and explaining the value. Pucci even agreed with my suggestion that pharma should sponsor blogs written by employees.


As I have said before (see, for example, "
Who Should Pay for Merck's Obstructionism?" and "Vagelos Speaks. Will Pharma Listen?"), when pharma or other companies lose the public's trust not only do the shareholders suffer, but the employees also suffer.


Strategy

GlaxoSmithKline, under Pucci's leadership I assume, has been doing a good job using their employees as spokespeople. TV ads feature GSK scientists, for example. Scientists are good pharma spokespeople. They are usually dedicated to doing good, which comes across as a genuine characteristic in the ads, and they represent the image that big pharma wants to promote -- i.e., that they are research based.


This national media campaign, however, is just one leg of Mr. Pucci's and GSK's strategy for the company's "Value of Medicine Campaign." The other legs are:

  • A grassroots campaign using the sales force and medical & executive speakers
  • WebMD Collaboration
You might want to compare this strategy with the action plan developed by attendees of a recent conference and summarized in the Pharma Marketing News article "Marketing the Pharma Industry: The Empire Strikes Back."

Key Messages

The key messages of the campaign are the familiar ones heard from other pharma execs (e.g., see "
A Call to Action: A Mea Non Culpa by Big Pharma"):
  • Today's miracle drugs finance tomorrow'’s breakthroughs.
  • Prescription drugs help us all live longer, better and more productive lives.
  • Pharmaceutical therapy in chronic disease treatment is the best value in healthcare delivery.
  • The pharmaceutical industry cares about people who can'’t afford their medicine.
I won't dispute the veracity of these messages here, but I would note that not all pharma execs agree with all these tenets. McKinnell, CEO of Pfizer, for example, took exception with the first one. He said in his book A Call to Action: it is a "fallacy to suggest that our industry prices a product to recapture the R&D budget spent in development." He suggests instead that it is "investors' confidence in the risk and rewards" that drives prices.

Tactics

Anyway, for me, the real story is the tactics GSK is employing to get these messages across:

  • Regional Medical Scientists target medical and pharmacy schools
  • Sales force targets friends, family, neighbors, community organizations, local politicians and HCPs
  • Value of Medicine champions target state conventions and health care symposiums and train local sales representatives on messaging
  • Trade organization targets distribution channel
  • Employer group targets local and national business groups on health and employee benefit managers of major companies
  • Reputation committee formed to coordinate and purchase national media spots in all US markets
  • Executive VP available to speak nationwide
  • WebMD contracted to create Value of Medicine website with links to patient assistance and disease management programs
Pucci claims that the campaign combining key messages with scientist ads is working. He cites Harris survey data from March 2005 showing that 56% of voters surveyed gave the pharma industry a positive rating compared to 44% in 2004. Of course, there may be other factors involved as was pointed out by another speaker, such as (1) the Medicare Drug Benefit, and (2) advertising about drug discount cards.

Side Benefit: Boost to Employee Morale

Pucci' s call to action is to entice other pharma companies to copy GSK's campaign and he encourages them to copy the messaging and tactics. So far, Pfizer and Eli Lilly have taken him up on his offer. Interestingly, Lilly did so primarily to boost the morale of its employees.

Role of PhRMA
A couple of members of the PHARMA-MKTING Online Discussion Group suggested that PhRMA should get involved. Terry Nugent, for example, stated "I commend GSK, but where is PhRMA? Each company continues to do its own thing. The divided are conquered."

Ann Poorboy had this to say: "Individual pharma companies have long touted their "citizenship" efforts and their helpful attitudes towards ensuring all patients receive quality care. But the industry must come together. If PhRMA isn't working to improve the condition of industry, have they met their objective?"

The main advantage of GSK's strategy -- the use of credible EMPLOYEES to get the messages across in a grassroots campaign -- cannot be directly exploited by PhRMA.

Pucci included a slide (see CHART below) that showed that the credibility of corporate communications (communications issued by companies, company website, or CEOs and CFOs) was very low among US consumers (only 11% cited CEOs as credible sources of information) compared to colleagues, friends and family, and regular employees (25% cited regular employees as credible sources). [Source: Pharmaceutical Executive Magazine, April 2003.]

Credible Sources

Communications from PhRMA are probably even less credible than from company CEOs! However, PhRMA could and probably should "orchestrate the activities of all the companies" as Terry suggests. "whatever the strategy," Terry says, "all the companies need to act in concert to maximize effectiveness. It's PhRMA's job to orchestrate that -- or it shoud be, in my opinion."

OK. Either that or one company such as Glaxo can take the lead and orchestrate it. What's the difference? As long as it's done right.

Another idea suggested by Terry was to use celebrities like Oprah Winfrey. I don't think this is a good tactic, even though celebrities probably are very credible sources of information among consumers. I am not sure how well it would work, especially if the celebrity revealed that PhRMA was paying her to deliver messages concocted by the pharmaceutical industry. And if the celebrity does not reveal the financial ties, that would be even worse -- it's bound to come out sooner or later! For more on this topic, see "Celebrities & Buzz Revisited".

Monday, October 24, 2005

PhRMA's Terrorist Plot

Back in May I posted a few comments about the Pharmaceutical Research and Manufacturers of America (PhRMA) commissioning Guiliani Partners to produce a report that called for an immediate moratorium on drug importation legislation (see "Terror Politics vs Drug Importation").

According to Giuliani, "opening U.S. borders to prescription drugs could provide an unfortunate opportunity for terrorists. Several credible sources have identified links between counterfeit goods, including pharmaceuticals, and organized criminals and terrorist groups," the report said. "It is not difficult to imagine a scenario in which terrorist groups could use this system to either finance operations or, worse, as a vehicle of attack."


It seems that PhRMA has taken this "scenario" one step further and paid a publisher to write a thriller involving terrorists and drug importation from Canada. The book may be edited by none other than Jayson Blair, the former NY Times reporter who made up a number of stories.


Peter Rost ("
Peter Rost: Pharma's Black Knight") had this to say about PhRMA's efforts to scare Americans away from importing drugs from Canada:
This story is simply getting more and more amazing by the day . . .

The Pharmaceutical Research and Manufacturers of America (PhRMA) have according to several news sources admitted that they paid a publisher to have a thriller written about Croatian terrorists using Canadian pharmacy websites to slaughter millions of Americans.

According to the New York Post's Page Six, Jayson Blair working for Phoenix Books, was tasked with editing this book, called "The Karasik Conspiracy." But now one of the two co-authors is accusing Jayson of lying -- again, in the NY Post.

Meanwhile, PHRMA, scared by publicity surrounding this project now claims it was a "rogue employee" at PHRMA who initiated, led and paid for this project, according to Toronto Globe and Mail, and that they have stopped funding the book. In fact, NY Daily News claims they offered $100,000 hush-money to kill the project. But the book is still getting published, in January 2006.

PHRMA also, according to NY Daily News, made several editorial suggestions. "They said they wanted it somewhat dumbed down for women, with a lot more fluff in it, and more about the wife of the head Croatian terrorist, who is a former Miss Mexico," one of the authors told the newspaper. Apparently, women are among the most loyal buyers of Canadian drugs.
If you want to read more about this, see the story in the Washington Post.

Thursday, October 20, 2005

Cut Marketing, Raise Sales

As pharmaceutical companies post their quarterly earnings, I see that some major pharma companies have done better than others at increasing their sales and profits. Take Novartis, for example:
Novartis, based in Basel, Switzerland, said net profit rose to $1.67 billion, or 71 cents a share, from $1.47 billion, or 62 cents a share, a year earlier. Sales increased 19% to $8.42 billion from $7.06 billion. Sales of prescription drugs rose 9.6% to $5.09 billion. (WSJ: "Novartis's Net Profit Rises 13%, Driven by a 19% Sales Increase")
So Novartis had a nice increase in sales. What could have contributed to this?

Usually, marketing would claim credit for an increase in sales. After all, without marketing there would be no sales. It's common knowledge that for every dollar spent on marketing (e.g., DTC advertising or eDetailing; see, for example, "
eDetailing ROI Better Than DTC?"), two to four dollars are made in sales. Marketers are careful to suggest a direct correlation and take credit.

Novartis, however, seems to have achieved the impossible: it increased sales while decreasing costs, including cutting back on marketing!
"Marketing and sales costs [for Novartis] came down, this is certainly a result of the Vioxx debacle and of Pfizer's announcement to cut marketing spending," said Karl Heinz Koch, analyst in Zurich at private bank Lombard Odier Darier Hentsch. (WSJ)
So you might say, in this case, decreasing marketing has led to increased sales. I don't know how to calculate ROI in such a situation -- it's a little like dividing by zero -- ROI would be infinite!

NOTE: It's interesting that Koch mentioned Pfizer, which vowed back in February to cut its sales and marketing staff (see "
Pfizer to Slash 30% of its Sales & Marketing Staff") and which recently dropped out of the top ten advertisers in the US (see "Pfizer No Longer Top 10 Advertiser"). This cut in marketing coincided with a net drop in revenue of 52% for Pfizer (WSJ: see "Pfizer's Net Drops 52%"). I am sure marketers will claim that there was a correlation, but you also have to take other factors into consideration, including a limp ED drug market.

Some Novartis drugs did better than others. Could marketing have been a factor? Zelnorm, which had a 36% increase in sales, and Elidel, which decreased 36%, both seem to have been equally heavily marketed (I have no numbers to support this, only my personal experience). In this case, there seems to be no correlation.


[It should be noted that Elidel is having unique problems affecting it sales. In March 2005 the FDA issued a public health advisory about a potential cancer risk from the topical use of Elidel cream.
According to Dr. Alan Greene (drgreene.com), "aggressive advertising, both to health care providers and to consumers, has created the false impression that these drugs are safe enough to use without a second thought. Not so. Perhaps the combination of the warmth of the ads and the chill of the FDA warning will create a more balanced impression."]

Anyway, the jury is out regarding whether all pharma companies can cut back on marketing and yet improve sales overall. It seems like a contradiction, but Novartis may be succeeding.

Wednesday, October 12, 2005

New Assault on Pharma Marketing?

It's one thing to criticize pharmaceutical marketing techniques like we have seen in the press, in Congress, on this Blog, and elsewhere. But attempting to deliver a death blow via competition is a different thing all together.

What I am talking about are new techniques by managed care organizations and health insurers aimed at influencing how physicians prescribe drugs. For example, many PBMs and insurers are actively engaged in getting physicians enrolled in their plans to implement an ePrescribing solution. While there are many benefits to ePrescribing, it can also subtlely guide physicians to prescribe generic products or brand drugs on restricted formularies. The Medicare Moderization Act also includes incentives for physicians to adopt ePrescribing by 2006.


But ePrescribing is a technology, not a competitive marketing ploy.


Free Generic Samples

A better example of what I am talking about was featured in an article in today's Wall Street Journal ("
Generic Drugs Sampled Freely in Aetna Test"): ATM-style machines dispensing generic-drug samples in doctors' offices. This competes directly with one of brand pharma's most effective physician marketing tools: free samples.

According to the article, "Last year, doctors received more than one billion branded drug samples -- three for every person in the U.S. -- valued at nearly $16 billion, an 18% increase over 2003, according to data from IMS Health, Fairfield, Conn. Makers of low-priced generic drugs don't provide samples to doctors, except in rare cases, because of the expense and lack of sales forces."

[Note: The value of samples is calculated many different ways. Usually it's an inflated number based on the AWP - average wholesale price. One could argue that the actual cost of samples to the pharma company is much less than that -- pennies or even fractions of a penny per pill. If one billion pills = One billion pennies, then the actual value of the samples is $160 million, which is about 5-6 days worth of sales attributed to Lipitor. Just to put it in perspective.]
Whatever the value of free samples, it is probably one of the most successful physician marketing techniques employed by the industry. As stated dryly in the article: "The tendency among doctors is to write prescriptions for the medicine samples they have on hand." Duh, Yeaaah!

Should brand pharma companies be worried that these generic drug dispensers will effectively compete with their sampling programs? Many brands compete with generics already and sampling may not be a big part of their marketing programs (sampling is used most often for newly launched drugs).


Turns out, this tactic may not be much of a threat after all.


The challenge for Aetna and other insurers interested in this idea is to identify practices with enough of their own insured patients to justify the financial commitment of installing and stocking the machines. Presently, physicians can give generic samples to all of their patients, regardless of what prescription plan they have.


The same financial hurdle besets ePrescribing and implementation of health information technology in doctors' offices in general. No one stakeholder (e.g., insurer) can shift the adoption curve enough to make it worthwhile. It's another example of how the fragmented nature of health benefit coverage and health delivery in this country stands in the way of reducing costs and improving outcomes.


I don't think, therefore, that pharmaceutical marketers will be losing much sleep over this challenge.

Tuesday, October 11, 2005

Celebrities & Buzz Revisited

Last week's post "Fake Pharma Advertising" elicited a number of responses from members of the PHARMA-MKTING Online Discussion Group. I include the dialog and further comments here.

James, an interactive ad agency guy, said:

I agree with your perspective on celebrity endorsements. They are definitely problematic when used to promote a specific drug or device.

However, I'm more favorable about their potential value as a condition awareness-raising tool. I think Pfizer's been smart about this -- e.g. Lorraine Bracco (depression), Mary Lou Retton (bladder), etc. All unbranded and designed to motivate a consumer-physician dialogue.

I'm not sure what it says about our society, but people do sit up and take notice when someone they know/like discusses a sensitive condition.

A quick scan on Google suggests they've been very effective at drawing attention to themselves and motivating people to speak with their physician.

Here's a whole page devoted to celebrity medical endorsements -
http://www.drdonnica.com/celebrities/index-001.htm

Thoughts?
Transparency
If anything, I am all about transparency. So I approach celebrity endorsements the same way I approached the ethical use of the Internet for dissemination of health information when I founded the
Internet Healthcare Coalition (a non-profit organization which is now disbanded).

Unfortunately, the health site you mention is not very transparent in distinguishing editorial content from paid promotion. The entire Celebrity Speak Out page is suspect in this regard. Has Dr. Donnica received money or services in kind for including all or some of these celebrity endorsements and links on her site?


We don't know.


All we know is that SpotLight Health and a few pharma brands/companies are sponsors of the site. Spotlight gets paid for managing celebrity endorsements. The Celebrity Speak Out page, however, appears to be Dr. Donnica's personal and purely editorial picks, not picked by Spotlight or the pharmaceutical sponsors.


This is very similar to the old DrKoop website which was exposed during the infamous "dotcom era" for misleading site visitors into believeing that a list of recommended hospitals was chosen based on merit rather than promotional fees paid to DrKoop.com. In other words, DrKoop's list of hospitals, just like Dr. Donnica's list of celebrities, appeared to be editorial content, not paid promotional content. The expose set in motion a movement to develop a voluntary set of ethical guidelines for health Web sites (see
eHealth Code of Ethics).

Alfred, another member of PHARMA-MKTING, emphasized that transparency will help build trust among cynical consumers:

You really nailed some major issues -- the new DTC guidelines to me are not the answer to the key question regarding pharma marketing: how do you build trust, or at least, credibility, with a cynical consumer.

Transparency is a marketing or financial services word, it really means nothing to a consumer without some sort of Code that details the communications standards needed to create the sort of materials that educate, qualify, motivate, a patient to the right treatment.

Do you know of such a code that takes the new guidelines and brings them to life? Because right now, 'education' in the new DTC world seems to mean having a doctor lecture you for 30 seconds while unbranded materials fly in and out of the frame.
Buzz and Free Speech

Brian, top dog at a branding agency, had this to say about Buzz:
Good observations, John, but I have a feeling you misunderstand the power of 'Buzz'.

How did Viagra succeed as a product?

Everyone out there think about that question very carefully.

Was it the phenomenal development program that Pfizer invested in to create a marketplace for ED? (How could that be when the drug was developed as a cardiovascular solution provider that had a stunningly unanticipated side effect?)

Could it be the intense PR activity that Pfizer put into newsrooms everywhere when they realised that they had serendipitously uncovered a new big thing?
(No - Pfizer stayed well out of the foreground of press speculation and tasteless humour that emerged with the genesis of Viagra)

Could it be that doctors had been waiting for years for an effective treatment that they could offer to the legions of ageing males queueing through the night for the best treatment for their problem? (As I understand it, ED wasn't that big until Viagra)

OK, the it must have been the advertising agency. What a success story. We launched Viagra to the world and the world listened and AIDAed and bought it. If there was a Nobel prize for advertising, we should get it. (I'm not even going to comment on that one)

Back to the point. Buzz is the most powerful medium available to this (or any) industry that is entirely outside of any kind of regulation (since Mao Tse Tung, or perhaps Mr Hussein). It's called 'free speech'. What made Viagra succeed was simply that it legitimised and enabled conversations between men and men, men and their doctors, men and their wives.... It ignited a forest fire of Word of Mouth, fuelled by the often misinformed, misled and down right dangerous involvement of the press and media, who were immediate in their interest and coverage of this new wonder drug. Pfizer may have had a hand in some of this, but I doubt it. The corporate engine maintained a safe distance from the frenzy of misinformation, and chose a path of dignity, when the product arrived to market. I'm sure Pfizer didn't really care. They had no idea what they were sitting on. (I'd love to see how they thought they would do with a product going to market on the strength of a useful side effect!)

Word of Mouth - Buzz - The Human Network. It's entirely out of the control of regulatory bodies or medico-legal approval. It's further from 'control' than where most brand budget is spent, but it's where brands are truly born. It's where experiences and success stories are shared - whether water cooler conversation between professionals or supermarket aisle secrets that housewives share like small change on the weekly shopping trip.

Anything that drug companies can do to ignite conversations among and between the tribes that surround any product in any therapeutic area that ad energy and potential to the products commercial gain should be explored.

It's branding at its purest. I embrace it, endorse it, encourage it, and whenever I see it happening, applaud it.

And there's nothing (in today's networked world) that any authority can do to stop people talking.

The branding trick is: How do you ignite the fire?
I doubt that paying someone to endorse a product is really a freedom of speech situation. You are paying people to say what YOU want them to say, not what they are free to say! I think Danny DeVito's character in the movie The Big Kahuna eloquently summed up the difference between free human conversation and buzz:
It doesn't matter whether you're selling Jesus or Buddha or civil rights or 'How to Make Money in Real Estate With No Money Down.' That doesn't make you a human being; it makes you a marketing rep. If you want to talk to somebody honestly, as a human being, ask him about his kids. Find out what his dreams are - just to find out, for no other reason. Because as soon as you lay your hands on a conversation to steer it, it's not a conversation anymore; it's a pitch. And you're not a human being; you're a marketing rep.
However, the real issue is credibility or loss thereof if and when the financial incentive is revealed. Think of Armstrong Williams, a prominent "black pundit," who was paid $240,000 to promote No Child Left Behind as part of a $1 million Education Department contract with the Ketchum public relations firm.

Regarding the Viagra buzz: Sometimes idly standing by and doing nothing to curb the buzz can be interpreted as actively "aiding and abetting." I say "curb" because buzz can get out of hand and result in incomplete or false information. This is not a big problem if you are promoting soda pop, but it can be dangerous for prescription drugs.


It took Pfizer several months after Viagra was launched before it built the viagra.com web site with approved information about the product. Meanwhile, as
as soon as Viagra hit the market, there were plenty of non-Pfizer Viagra Web sites selling Viagra as well as plenty of buzz on online bulletin boards.

And while this situation was going on a few guys were being rushed to emergency rooms because they didn't know about the interaction between nitrates and Viagra -- something not mentioned in all the buzz!

Friday, October 07, 2005

Fake Pharma Advertising

There is a growing concern about using certain promotional techniques for drugs and devices that have been "imported" from other industries (e.g., packaged goods). The FDA, for example, cited the use of coupons, free samples, free trials, and money-back guarantees in pharmaceutical advertising as examples of techniques it wishes to examine in its November public meeting (see "FDA May Follow PhRMA's Lead on DTC").

I think that it is fair to say that many pharmaceutical marketers have come over from the packaged goods and other industries and have brought with them and applied techniques they have commonly used for consumer products. This was in response to the criticism often leveled at the drug industry that it did not understand how to market to "consumers."


We can get into a whole discussion of whether or not patients are or should be considered consumers. But I'd rather focus on two advertising techniques that require industry self-imposed ethical guidelines or, failing that, regulatory guidelines from the FDA:
celebrity endorsements and buzz marketing. Neither of these techniques is addressed in PhRMA's "Guiding Principles" for DTC advertising.

Celebrity Endorsements

The FDA also is interested in the use of celebrity endorsements:

"Such approaches plainly do not reflect a data-oriented approach to promotion and may not be recognized by consumers as anecdotes," the agency wrote. “FDA is interested in whether and how techniques mislead consumers about the risk-benefit tradeoffs of prescription or restricted medical products." (See FDA's statement in the Federal Register.)
Dorothy Hamil may forever be associated with the Vioxx debacle. She is the poster child for the anti-celebrity endorsement proponents. I, however, prefer Rafael Palmeiro, aka "Viagra Man." On the one hand, we're supposed to believe him when he says he takes Viagra, while on the other hand, we now know he lied about taking steroids!

That's the problem with celebrity endorsers: YOU CAN'T TRUST THEM! Or, you can't control them. By linking them to your product, you assume a risk.


I have been surveying pharmaceutical marketers on this and other pharma marketing techniques that may be examinedd by the FDA (see "
FDA Regulation of DTC Survey"). Almost two-thirds of respondents agreed with the statement: "In your opinion, does the use of celebrity endorsements or actors playing doctors in DTC ads mislead consumers about the risk-benefit tradeoffs of prescription drugs?"

Here are a few specific comments I received so far:

This is a grey area--Dorothy Hamil for Vioxx is a classic example of misuse of celebrity endorsements, but I can envision applications which are not misleading.

Celebrity endorsements or actors playing doctors is a form of
fake advertising that should be banned.

You first have to have the trust and confidence of the patient in the drug. A celebrity cannot create trust, even if a consumer/patient may like them.

Consuming a particular brand of soap because it is endorsed by your favourite star is definitely less risky than doing the same with a prescription drug (without considering indications, side effects etc.)
Buzz Marketing
Buzz or "Word-of-Mouth" marketing is popping up at pharmaceutical industry conferences. This type of marketing employees consumer peers (and celebrities, I guess) to spread kind words about products. Buzz may be most effectively employed via the Internet where, for example, a patient on a disease discussion board might say nice things about a drug that treats the condition.

I don't know how prevalent buzz marketing is in the pharmaceutical industry, but I have joked about it and noted that buzz marketing is currently unregulated (see "
Buzz is NOT regulated by FDA"). In fact, some buzz marketing may be illegal (see "Is Buzz Marketing Illegal").

What I do know is that pharmaceutical companies are using services that track how their products are mentioned on the Internet -- i.e., whether it's a positive mention or a negative one. The logical next step is to try and influence the buzz.


According to AdAge Online article cited above: "As marketers more frequently look to recruit consumers brand agents to spread goodwill for brands, industry attorneys view buzz marketing as a likely area of regulatory involvement, especially around the issue of compensating people to participate in buzz programs when they fail to disclose their connections to marketers and agencies."


I am sure that Tom Cruise did not receive any pharmaceutical money when he "dissed" antidepressants, but I am not sure that a celebrity on the Ophra Winfrey show who mentions a drug product did NOT get paid to do it. Nor would I know if that patient on the online discussion board got paid. The only way I would know is if the endorser disclosed that he or she was compensated by the manufacturer.


And that's the Catch-22 of buzz marketing:
if you disclose, you dispose (of the credibility).

RULE OF THUMB
: All DTC advertising -- like all drugs -- has some risk. Marketers should do a risk-benefit analysis before using celebrity endorsers or buzz marketing.

Wednesday, October 05, 2005

eDetailing: Surveys Say...

At the recent Technology Supported Physician Detailing conference in Philadelphia, Liz Boehm presented data from a recent (2005) Forrester Research survey of eDetailed docs. I took away a few interesting bits of information that I'd like to summarize here -- a more detailed summary will appear in this month's Pharma Marketing News (subscribe here).

You might compare these survey responses from physicians with a Jupiter Research survey of pharmaceutical company marketing executives (see "
eDetailing ROI Better Than DTC?"). If you want more information about eDetailing, start with this definition. Forrester defines eDetailing as follows: "A pharmaceutical- or medical device firm-sponsored, Internet-based program that informs prescribers about products or diseases."

There are many advocates of eDetailing -- including myself -- that would like to see more of it. Proponents, both inside pharma companies and outside, use survey data to buttress their arguments for greater spending on eDetails.
In some cases, however, the numbers seem to show confusing trends and even may suggest that eDetailing may not be all that it's cracked up to be.


Large Majority of Physicians Have Never Been eDetailed

According to a Forrester 2005 study, eDetailing "dwells at the fringe of MD marketing." Sixty-nine percent of physicians surveyed say they have NEVER participated in an eDetail and an additional 10% have participated in one or less eDetail per year.


High prescribers are eDetailed more frequently than low prescribers. Forty-eight percent (48%) of physicians writing more than 100 scripts per week have been eDetailed whereas only 26-28% of physicians writing 50 or less scripts per week have been eDetailed. According to Boehm, "there's a lot of room to grow" as many physicians would like to be eDetailed but have not been asked to do so.


Whether or not Pharma companies will expand their eDetailing programs depends on several factors. Return on investment (ROI), of course, is an important one. Another is continued physician acceptance. To date, a lot of that acceptance has been due to the cash-equivalent honoraria offered to physicians for participating in an eDetail.

Cash Honoraria
Perhaps it's no surprise that cash honoraria is cited by 93% of eDetailed physicians as influencing their decision to accept an eDetail. In fact, 35% of eDetailed physicians cite honoraria of some sort (could be textbooks) as the primary reason for accepting eDetails, according to the Forrester survey.

Compare these results to a 2003 Forrester survey of eDetailed docs: 77% of eDetailed docs say honoraria as a reason for participating in eDetails. 40% of the docs agreed with the statement "I love them [honoraria]! That's the reason I do eDetails!" and 95% of doctors surveyed said honoraria "are the reason" or "would sway my decision" to participate in an eDetail (see "
Pharma Marketing News eDetailing Supplement").

It seems that between 2003 and 2005 doctors have become even more conditioned to receive incentives, not less so (93% in 2005 vs. 77% in 2003 cited honoraria as an influencer). Or maybe we should look at the 95% number in 2003 vs. the 93% number in 2005?


The question marketers need an answer to is this: Are physicians moving away from cash and cash-equivalent incentives as eDetailing motivators or not? The answer to this question will determine if eDetailing becomes mainstream or not. Unfortunately, physician surveys do not seem to give us a definitive answer to this question.


Do eDetailed Physicians Prescribe More of Less of the Detailed Product?
If eDetails don't result in more scripts being written, then why bother? If a large segment of eDetailed physicians write less scripts for the featured drug, that would diminish the ROI.

Forrester asked eDetailed physicians "Which of the following have you ever done following an eDetail?" A number of calls to action were listed including prescribing more of the featured drug as well as prescribing less of the featured drug. Happily, 49% of eDetailed physicians reported that they prescribed more of the featured drug. This is a good thing. However, in the 2003 survey, a larger percentage (58%) indicated they prescribed more of the featured drug. It seems, therefore, that eDetailing is becoming less effective, not more.

What about the other side of the coin -- prescribing less of the featured drug? It appears that the same percentage (6%) of eDetailed docs in 2003 and 2005 said they prescribed less of the drug.

However, I attended another conference where a marketer from a major pharmaceutical company compared 2004 Forrester data with the 2003 Forrester data. Data from the 2004 study showed that 50% of eDetailed physicians said they prescribed less of the featured drug compared to 6% in the 2003 study!

Surely, this could not be right. Several people in the audience tried to explain it as anomaly: it may be a Vioxx effect or it may be due to a larger sample size (more eDetailed docs) and reflect a movement towards a more accurate mean.

No one was willing to accept it the at face value -- that, as time goes on and more physicians are exposed to eDetailing, a larger percentage of eDetailed docs were prescribing less of the featured product!

It turns out that we may not be comparing apples to apples in the 2003 vs. 2004 data. The first study (2003) was done online through eDetailing Vendors, the second study (2004) was a mail survey through the AMA, and the third study (2005) was also done online via the vendors.

The online studies (2003 and 2005) asked "Which of the following have you ever done following an eDetail?" Respondents had to answer "Yes" or "No". In both of these studies, 6% answered "Yes" to the question regarding prescribing less of the featured drug.

The AMA (2004) study, on the other hand, asked the question in a slightly different way, according to Boehm. It asked "How often have you prescribed less of the featured drug: Never, Rarely, Occasionally, Frequently."

According to Boehm, "when you ask a question that way, you get more granularity." In other words, more respondents are likely to check off "rarely" because maybe they did it once. With the "Yes/No" choice, however, people tend to say "Yes" only if they've done the thing asked more often than they've not done it. Boehm believes that the majority of the 50% docs in the AMA study have only prescribed less of the featured drug rarely or occasionally.

Cautionary Tale

Advocates of eDetailing -- especially eMarketers within pharmaceutical companies -- should be careful when presenting data from these surveys and comparing results from one year to the next in an attempt to illustrate trends. You just might kill the goose before the golden egg is laid!

Tuesday, October 04, 2005

DTC & Prescribing: Conventional Wisdom Challenged

With all the hoopla about direct-to-consumer (DTC) advertising and diminishing return on physician detailing, physicians are being surveyed more and more about their attitudes towards the promotion of prescription drugs to themselves and their patients.

The results of these surveys are used to support one side or the other of issues like the banning DTC and whether or not eDetailing is more effective than traditional sales rep office visits.


Conventional Wisdom
Certain study data get translated into conventional wisdom, which is cited over and over again.

Take, for example, the bit of conventional wisdom that says DTC advertising has a positive impact on the prescribing habits of physicians. That is, DTC causes physicians to prescribe more of the advertised product and hence raises the costs of health care.

The basis for this bit of convention wisdom actually comes the FDA! An oft-quoted 2002 survey of physicians by the FDA indicated that 75% of the time physicians prescribed an advertised brand name drug when patients (who said they saw the drug ad) asked for the prescription (see "
Results from FDA Physician Survey on DTC Advertising").

From this, I would conclude that if I paid a visit to my doctor and asked for Cialis, the odds are in my favor that I would get the prescription.


A recent HRA Research online study of doctors' attitudes on DTC advertising of prescription drugs, however, might discourage me from even trying.


The Challenger
This survey revealed, for example, that a majority (60%) of physicians said they prescribed the requested advertised drug less than 25% of the time. In fact, only 18% of the physicians in the study prescribed the requested drug more than 50% of the time.


If I were to go by this study, I would anticipate a much lower chance of succeeding in my quest for Cialis. The odds are that my physician is not one of the 18% that prescribe requested drugs more than 50% of the time. I might increase my chances, however, if I found a friendly online physician!


Of course, the studies asked different questions, used different methodologies, and had different sample sizes. But let's not get into that.


Which study gives a true picture of the impact of DTC on physician prescribing? The answer is: truth is not important, especially not to a marketer (see "
Is Pharmaceutical Marketing BS?"). The main point is that the two studies are useful for different purposes. The FDA study could be used to put DTC in a bad light (too much interference in the patient-doctor relationship) by DTC critics whereas the HRA study could be used to argue the opposite by proponents.

In fact, with these two studies, a pharmaceutical company can have its cake and eat it too. Marketers in the company can use the FDA data internally to support the current strategy of spending lavishly on DTC, whereas the corporate communications people can cite the HRA study to say that DTC does not unduly interfere with the patient-physician relationship -- that is, physicians clearly do not prescribe products simply because patients ask them to.


[Actually, pharma companies don't need no stinking FDA data; they know that DTC works. Many ROI studies show that there is a positive return on DTC investment in terms of increased scripts written. See "
eDetailing ROI Better Than DTC?" Or is this just another case of unchallenged conventional wisdom?]