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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

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« Making the Numbers Confess | Main | Drug R&D Spending Now Down (But Look at the History) »

June 28, 2011

DTC Advertising: Is That Where Things Fell Apart?

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Posted by Derek

Over at Forbes, Matthew Herper has a provocative comment from a former Merck executive, Peter DeVillbiss. He's wondering when and how drug companies lost the public standing that they used to have (remember, Merck used to be the "most admired company in America", just to give you one example). His theory (which I know is shared by some of the readership here) is that direct-to-consumer advertising was a terrible mistake, bringing in lots of profits while ruining the reputation of the drug companies. His thought experiment:

If there was a regulatory mandate for all pharma companies to cease direct-to-consumer advertising for prescription drugs and vaccines, what would happen? It is not clear to me that this would be a death knell for the industry. I think it’s reasonable to assume that revenues would fall, but the big question is whether costs would fall more? This could never happen on a voluntary basis because of game theory but if it were mandated and applied across the board, I’m not so sure that pharma wouldn’t be better off in a few ways.

Check out the post, and the comments that it's inspired. I'll get a few points out of the way - for one thing, DTC advertising has, in fact, probably enriched the drug industry a great deal. No one's claiming that it's been a money sink, just a reputational disaster. Another thing to remember is that advertising budgets are supposed to bring in more money to the company than you'd have if you didn't run ads - that is, they're supposed to pay for themselves and plenty more besides. So if we can skip the "Pharma spends more on ads than R&D!" part of the argument, that'll be fine. Ads make money; I'd rather focus on what else they do. Thoughts?

Comments (45) + TrackBacks (0) | Category: Why Everyone Loves Us


COMMENTS

1. Hap on June 28, 2011 9:02 AM writes...

One might posit that DTC has cost the drug industry money - while the ads certainly bring in lots of money, the loss of reputation based on running after the money (overselling and DTC) and its internal reflection by people who don't like the drug industry has helped to make the FDA much more risk-averse about approving drugs. The shifts in personnel, firing and outsourcing, are all about "too much money spent, not enough products" - how many more products would there be if there had not been DTC and overselling? (This is counterbalanced by the smaller size of R+D that would probably exist in the absence of DTC money).

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2. Curious Wavefunction on June 28, 2011 9:24 AM writes...

I am not a fan of DTC; I think it's made the industry even more science-aloof than what it was. If you can come up with yet another statin/antibacterial/glitazone (which is marginally better than the previous ones) and take it to stratospheric heights primarily through advertising, why would you spend money on the actual science after that? You would be much more interested in packaging (slightly modified) old wine in new bottles rather than creating new wine. I can't see how DTC can ever help bolster basic science research in drug discovery.

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3. John Spevacek on June 28, 2011 9:25 AM writes...

As much as it goes against much of my personal political philosophy, there are many, many cases where government deregulation has hurt companies, such as the phone companies, the airlines, savings and loans,...DTC fits the picture too.

(I apologize to any readers under the age of 35 for not being familiar with these examples. I'm getting old!)

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4. NoDrugsNoJobs on June 28, 2011 9:33 AM writes...

I find it ironic in a nation that values free speech above all else, that in this marketplace of ideas, we would argue that the products most near and dear to our personal health (drugs) should be the same products which cannot be advertised to consumers! Should physicians no longer be able to advertise as well? Should hospitals and cancer centers pull their advertising?

Is it possible that the drug industry is having problems because of: Significantly higher bar to approval (outcomes trials; increased safety standards); 2 - Improved standard of care?; 3 - Need to prove economic benefit?; 4 - Payer price pressure; 5 - Trying to grow an industry that is already huge?

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5. Cellbio on June 28, 2011 9:42 AM writes...

Where is the evidence that ads are a net positive for sales? I am not saying they are not, but is there any solid data to support the statement "Ads make money". I'd like to see the same bottom line assessment applied to research, that is not a case study or single example but the ad budget in total, even that spent for failed drugs. I would guess that the total impact is positive, but likely driven from grabbing a share of markets with poorly differentiated products rather than helping drive sales of truly innovative products where competition is scarce. But the problem is, how would one generate the data to know the magnitude of the impact of ads in these different settings, since no one will do the experiment? Perhaps a me-too with solid scientific/clinical data presented to care givers, not DTC, would grab an equal market share, perhaps not. Are there examples out there to assess the effectiveness? So, yes maybe they make lot's of money, but I am guessing mostly with me-too drugs, and this does fuel the perception (truth?) that Pharma can't innovate.

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6. Hap on June 28, 2011 9:45 AM writes...

But the higher bar to approval is in large part because drugs are sold using DTC ads, without (much) regard to the risk-benefit to the target audience. The safety constraints on drugs in larger populations and the belief that the FDA doesn't know exactly how many other people a company will try to sell their drug to means that fewer drugs probably get out. So while it's not all the problem, DTC has probably helped to exacerbate the main problem.

If doctors don't know the risk-benefit ratio for a given drug, it seems pretty hard to expect people with little or no training to reasonably figure out whether it might be useful for them. Since ads tend to focus on pretty pictures, older couples in sunny fields getting ready to assignate, and Erlenmeyers of green liquid, it's clear that drug company advertising doesn't care whether they can make those calculations, either.

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7. NoDrugsNoJobs on June 28, 2011 9:52 AM writes...

Hap - you say the higher bar to approval is because of dtc ads but where is the evidence? I believe that dtc ads for pharma products are among the most regulated of all advertising! Given that more than 30k people die every year in car wrecks we should consider that automakers should not dtc as well? Can consumers really decide if a particular car is safe for their family? I mean, where does the heavy hand of government end? Businesses also have free speech rights so rather than simply take them away, maybe a little evidence for their benefit/harm should be considered first rather than knee jerk reactions to smiley faces?

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8. watcher on June 28, 2011 9:52 AM writes...

To properly assess the question it is necessary to separate one's involvment within the industry from the viewpoints of various interested and opinionated parties, as a general drug-taker, the median family MD, the mean legistlator, the stockholders. Certainly, for most, downsizing is of minor impact and not of primary concern, unless they know someone who has been effected.

So, what is it that influences these folks? Direct to marketing has been a change, but in itself was only a response to already emerging industry issues in terms of lower productivity for new "blockbuster" drugs, lower profit growths---the marketers response to what was happening in the industry.

What do folks like my elderly parents who have nothing to do with drug R&D except their offspring's career, and that they (have) periodically owned a few shares of drug company stocks over the years, living in a small southern town, see?

1) high(er) health care costs and drug prices that exceed inflationary increases year after year, except when drugs become generic, giving the overall appearance of corporate greed, excess spending, and even paying off for policial and regulatory favors (see below). Drug cost. This has to be the number 1 reason, Full Stop.

2) negative represenation across new sources, nightly, weekly magazines, newspapers, internet, suggestive of poor internal follow-up on new drugs in Phase IV for efficacy vs safety, with related drug company (in)actions and profit only focus. Impression that companies demonstrate only limited actions showing interest in public well-being and safety with profits being priority.

3) PACs, politial money...people are sick of it.

4) litigation, mass action suits advertised nightly on TV, much focussed on drugs deemed to have safety "issues" (SSRIs, COX inhibitors. Avandia etc)

5) decreasing stock valuation and minimal projection of stock price growth

6) corporate compensation that often is out of reason to company performance. Parents continue to be amazed of the compensation. When compared to the average family income across the country, who can feel sorry for those employed within the industry, except the ones no longer employed within the industry (or those who think they should be paid more analogous to folks who work at Goldman)

7) over promises of "full pipelines" that have not delivered new products, and being told that "it's a hard business to new drugs, it costs a lot, it takes a long time".....the industry has to stop complaining, suck is up, and recognize that's the business.

8) very, very poor self-advertising of great successes produced by the industry....eg HIV drugs, new HCV drugs, new breakthroughs in some cancer therapies. Unfortunately, the industry tends to undermine it's own successes with the high costs imposed for the new drugs, often based on the perception for what is acceptable for a "round of treatment" in a given therapeutic area.

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9. Jim on June 28, 2011 10:01 AM writes...

An interesting statistic I heard from a marketing exec I used to work with is that 90% of the time that a patient asks a doctor for a specific prescription, the physician will fill that as requested. While that's just another statement to the fact that we know that DTC is an effective way to increase sales, the question is how much has it benefited the patient? Consider the vastly different responder rates (or the bimodal distribution of responsive patients) to Zyrtec and Claritin. Would physicians switch patients as early and as often from one to the other if the patients weren't asking them to do it? Probably not, unless you believe in the quality and integrity of the reps that visit them. I don't think you can quantify this effect, but if DTC can help patients be more proactive in their healthcare decisions (by adding to tools like WebMD and the like) then it's probably not all bad. I just don't know how good it is.

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10. Dyna on June 28, 2011 10:06 AM writes...

@3, Your first two examples of govt deregulation hurting companies (phone and airlines) are very different then DTC- phone and airline dereg might have hurt the companies in question, but they were a huge plus for consumers and competition. The S&L disaster (and the more recent financial meltdown) might be better analogies, giving companies enough rope to hang themselves with.

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11. Hap on June 28, 2011 10:17 AM writes...

Would Vioxx be off the market if it hadn't been so widely advertised for people who wouldn't have benefited out of proportion to its risks? Do you think that didn't have an effect on how the FDA looks at new drugs?

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12. luysii on June 28, 2011 10:17 AM writes...

My late father, an attorney, thought it was awful that lawyers advertised. Ditto for my uncle, a judge. Ditto for yours truly, a doc, for MD advertising.

A cynic would argue that academics advertise by publishing papers, but at least here, peers can judge quality.

Popularization attempts by academics is another way to go, invariably criticized for being too simplistic by the cognoscenti, but rarely criticized for being fraudulent.

Exactly this has happened to one of the great popularizers -- Steven J. Gould. For details https://luysii.wordpress.com/2011/06/26/hoisting-steven-j-gould-by-his-own-petard/

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13. Hap on June 28, 2011 10:20 AM writes...

Would Vioxx be off the market if it hadn't been so widely advertised for people who wouldn't have benefited out of proportion to its risks? Do you think that didn't have an effect on how the FDA looks at new drugs?

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14. Hap on June 28, 2011 10:34 AM writes...

The analogy between drugs and cars is pretty flawed - the inputs for car purchases (how much does it cost? what does it do? how much resources does it take to maintain?) are pretty well known and don't vary much between consumers (how they rank those priorities does, but, there too, individuals can readily recognize their ranking). The choices don't require knowledge of the engineering of the car, or any other arcane knowledge, but can be facilely understood by laymen.

On the other hand, drug effects differ widely between people, and on various factors about which even doctors don't know. Evaluations of whether a person will benefit ultimately depends on knowledge that is available but comprehensible to not so many. In many cases, it isn't even known (effectively, initial sales are a P4 trial). Cost is readily evaluable by a patient (though even there, the numbers may be more difficult to come by). The basic calculations about a drug's benefit to a person are only doable in some cases, and only by people with relatively deep technical background in the field. Direct advertising assumes that people will be knowledgeable and responsible for the risks of a drug, risks that they can not readily evaluate - thus that premise is fatally flawed. People basically have to take a wild-a&* guess at what a drug will actually do, and hope that the placebo effect works for them. Does that seem like a good idea for pharma?

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15. RM on June 28, 2011 10:37 AM writes...

Even though you're likely getting more R&D dollars with DTC than without, you've got to ask yourself if DTC is skewing where those R&D dollars are spent. Only a small subset of drugs can support a DTC advertising campaign (lifestyle drugs and those for minor ailments, mostly). You aren't going to see a DTC campaign for an post-heart-attack IV blood thinner ("As the EMTs wheel you into the emergency room, lift the oxygen mask and ask your doctor about Survivinex."), even though widespread use of the drug could make the company lots of profit.

It would be somewhat counterintuitive to suggest that DTC-increased profits for certain drugs wouldn't be a factor when the pharma industry does its periodic realignments and lab closings. You'll likely keep the nail fungus group around, even if their product is a bit of a stinker, as the chance of DTC-boosted profits is large, but you might not be so lenient for the group treating the 1 in 100,000 genetic condition, even if success is highly likely. I don't think it's clear if the extra money generated from DTC actually makes it to the *other* research programs (e.g. by making resizing less likely) or if the net gain is in practice only funneled into research for DTC-able products.

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16. NoDrugsNoJobs on June 28, 2011 10:55 AM writes...

Hap, Vioxx was not pulled off the market by the FDA, in fact, the advisory committee voted to allow for it to stay on the market - merck pulled Vioxx off the market. Are you saying that Merck pulled Vioxx off the market because Merck had dtc'd the product? In that case, I would assume that merck no longer dtc's their drugs?

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17. CMCguy on June 28, 2011 11:02 AM writes...

IMO that even though has lead to short-term sales increases DTC has had a negative impact on Pharma/R&D. Although multiple factors I think two are it resulted in greater emphasis/power in the Marketing/Sales types to "lead" the industry (at expense of science) and then the public perception exacerbation of "high costs of drugs" where people were saturated with ads and began to wonder why necessary to pay premium for drugs that could "afford" costly commercials/magazine pages (rather than support for R&D).

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18. NoDrugsNoJobs on June 28, 2011 11:03 AM writes...

Hap - the analogy to car inputs concerned safety, I'm not sure where the other stuff you mentioned came up - the safety of a car is very individualized. some cars are safer for passengers in back, some for small children, some for high speed wrecks, others for low speed. Handling differences affect how safe an individual is but depend on the individual's driving style as well. Are these all well known? Do you know them? It amazes me that the very things that are most studied and proven for safety (drugs) are the very same things that we in the industry would say we cannot convey to the people who actually will take the drugs! As it is, drug advertising is highly regulated and actually, helps many people to realize they may have a problem and encoiurages them to be proactive in their healthcare. Nanny state is no state for me....

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19. NoDrugsNoJobs on June 28, 2011 11:08 AM writes...

CMCguy - the public perception of the high cost of drugs is....the high cost of drugs. Interestingly, the drugs that are not advertised dtc are typically and by far the most expensive (onclogy drugs, orphan drugs, etc)

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20. Flem on June 28, 2011 11:13 AM writes...

Like any other marketing tool DTC needs to be used effectively. Unless it is properly targeted to those who might benefit from it will skew prescribing, drive up costs, and harm the reputation of pharma. It needs to be limited, kept on the internet (for those how seek info) or in Dr's office (where it can be controlled).
I don't think the general public understand the difference between Rx, OTC, and snake oil sold in infomercials. Unsolicited drug ads on TV received by healthy subjects only serve to reinforce that Pharma is a big part of the escalating cost and inefficiency of our healthcare system and benefit from people's suffering. I'm sure that patients who recieve a beneficial drug as a result of an Ad will view the industry differently.

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21. not bob on June 28, 2011 11:53 AM writes...

If the sales you generate from advertising come at the expense of other players in the industry then those expenditures, while sensible for each individual player, would be a net negative for the industry as a whole.
For example, take the ED market. I would suspect that the business case for Lilly's Cialis advertising rests more on the idea of taking market share from Pfizer than growing the ED market as a whole. In which case, viewed from an industry wide perspective, that money is effectively "wasted". Classic prisoner's dilemma.

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22. Hap on June 28, 2011 11:56 AM writes...

15: They pulled it because they got sued, which happened because they sold it to everybody and their grandmothers, which outed the CV risks. If they hadn't sold it to everyone, those risks wouldn't have come up (and if they had, might have been easier to justify relative to benefits in a smaller target population). It's obviously affected their reputation quite a bit, too, which factors into their ability to make drugs and get them approved.

17(?): Safety in cars isn't very individual or unevaluable - you have crash tests from a few basic angles, car size is pretty easy to evaluate, and, of course, I can understand and control how I drive. There are also the safety and recall warnings, which are pretty clear and specific.

There are FDA tests for safety for drugs, but their dependencies are far less transparent to laymen. (Some of the most clear effects are known and stated, but for efficacy...good luck with that.) Efficacy is a key part of the equation - if you don't know the reward, even if you know the risk clearly, reward/risk is hard (impossible) to determine. Since that's the factor that people are implicitly supposed to know to figure out if they should ask for a drug (and what to expect if they take it), not being able to do so and yet holding people responsible for it when they take a drug seems like a recipe for disaster.

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23. MoMo on June 28, 2011 11:56 AM writes...

DTC marketing has destroyed and cheapened the pharmaceutical industry, plying America with drugs of questionable value and long-term worth. They are one step short of having Ron Popeil or the ghost of Billy Mays hawk their pills.

And ask any doctor or especially the nurses, there are way too many drugs in their deceased patients cabinets.

But that is how Pharma treats America, as one giant depository and cash cow for its drugs. So why not show Viagra ads during children's viewing hours, or with ads during the Superbowl for depression?

The more pills America eats the fatter the Pharma executives get.

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24. hibob on June 28, 2011 12:14 PM writes...

There was a marketing study done in the '90's that found the biggest impact of DTC advertising wasn't in generating new prescriptions, it was in reminding people who already had prescriptions to actually take the drugs and keep buying them every month. DTC has come a long way since then, though.

Here's my suggestion: Allow DTC advertising of the fact that there are drugs available for a condition, allow suggestions that you should go poke your doc in the kidneys until he writes you a scrip. Do NOT allow any mention of specific drug names or other attempts identify the drugs.

If your company has the only drug available for a condition, it would still sense to market it heavily via DTC. If the drug is in a crowded field, it would cut down on zero-sum ad spending (which does less for the pharma industry as a whole), and would cut down on docs being led by their patients on which drugs to prescribe.


@HAP: would the FDA really start walking back safety constraints in the approval process if DTC advertising was abolished at this point?

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25. CR on June 28, 2011 12:17 PM writes...

@#21, Hap:
"15: They pulled it because they got sued, which happened because they sold it to everybody and their grandmothers, which outed the CV risks. If they hadn't sold it to everyone, those risks wouldn't have come up (and if they had, might have been easier to justify relative to benefits in a smaller target population)."

I must have missed the Vioxx aisle in Walgreen's? I didn't know that Merck could 'directly' sell their medicine to the public? Huh. Here I thought it needed to be prescribed by a doctor. Silly me. Pharma companies do not sell their products to the mass public. They do market them, but one cannot go and buy it like they can deodorant.

However, the reputation of the drug industry has been forever tainted due to these DTC ads - making prescription drugs on the same level as deodorant, and other commodities. Regardless of the list of side effects in the commercial ads (gas with oily discharge, anyone?) once those drugs are advertised during Oprah, the masses believe they should contain no risk. That and the misconception that somehow drugs are the predominant cost of health care.

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26. hibob on June 28, 2011 12:33 PM writes...

Any thoughts on whether DTC advertising raises the price of a drug not by increasing costs per pill or per drug, but by raising demand? Drug prices are set at the highest point the market will bear, no matter what the development or manufacturing costs for the pill were. If you increase name recognition, desire for the drug, etc, does that translate into a market willing to pay more for per pill? Granted the "market" is mostly formularies at this point, but those are still under pressure from the actual consumers.

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27. passionlessDrone on June 28, 2011 12:49 PM writes...

RM @ 14 nails it. +1 cool point.

Unfortunately, I think this reality is also largely the blind spot behind the idea that we can privatize healthcare and save money. In too many (very expensive) instances, you don't get the luxury of selecting providers based on cost in the health care field.

- pD

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28. Hap on June 28, 2011 12:56 PM writes...

I doubt it - in theory, they should, because the likely benefit/risk in a more targeted audience should be higher for a given level of risk. I don't think they would though - whether because of reputational loss, strengthening of people who dislke pharma, or other things I have no clue.

If they can't sell drugs like deodorant or tampons, why advertise them as such? (Actually, the more problematic and accurate analogy would be to ads for vaginal douches, where advertisers can't or won't be explicit about why you need them, so they show pretty pictures and make aspersions and hope you don't understand anything other than "this product is good".) It seems like a poor way to get customers who are aware of and willing to accept the risks and rewards of a given drug.

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29. CR on June 28, 2011 1:09 PM writes...

@27, Hap:

"If they can't sell drugs like deodorant or tampons, why advertise them as such?"

For the life of me I can not figure out why Pharma wants to advertise, other than for the sake of advertising. Or maybe, because they can? But the notion that Merck sold Vioxx to patients is patently false. When an advertisement creates increased revenue one shouldn't look at the general public, but rather, the doctors. They are the 'gate-keepers' in this equation, and unfortunately, they write prescriptions for any number of reasons.

However, in my opinion, these ads are the exact reason the industry has gone down the tubes reputation wise. This is also coupled with the explosion of information, so now when something happens it is not only covered in the video media and print media where it may only be a 1-2 day event; but it's also covered in the internet media where nothing ever dies. This allows anti-groups to prosper (and some of them rightfully so). Maybe it was a perfect storm of regulators allowing DTC ads and the information age - but regardless of sales, DTC has only hurt the industry. The pharma industry lost the war on reputation and now anything they do is not going to be looked upon favorably.

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30. Mr. McKnuckles on June 28, 2011 2:04 PM writes...

DTC as made "lifestyle" drugs bigger sellers and more in the public eye. Combine this with fewer new NCE approvals, and people see drug companies as more worried about hawking baldness cures than eliminating cancer. In short, shills.

That has a couple of effects - it leads to the public misperception that prescription drugs are the leading cause of health care inflation, and therefore more restraint is needed. Worse, it encourages people to think that pharma companies are only out for a buck when it comes to selling things like vaccines. From there, it's a short step to don't bother giving the kids shots.

Second, advertising undoubtedly helped make drugs like Vioxx big hits. Vioxx's side affects became much more evident when it was used by a large population. And many of these people would have been just as well served by Tylenol. You got a PR disaster, and huge lawsuits. My guess is none of this would have happened without DTC.

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31. Hap on June 28, 2011 3:12 PM writes...

I know that people can't buy anything like Vioxx OTC, but I figured that the ads drove consumers to request it from doctors who then prescribed it (and if my logic holds, are supposed to be the gatekeepers). If that's not correct, then at least some of my comments are wrong. Sorry.

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32. Jose on June 28, 2011 3:20 PM writes...

The major fallacy here is assuming that drugs are normal consumer products; they are not, have not been, and should never be considered as such.

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33. CMCguy on June 28, 2011 3:36 PM writes...

#19 NDNJ granted recognize reality drugs costs are high however what gets lost is what goes into the pricing that is complex but does (or used to) provide funds for future compounds. When simplistic comparisons of R&D budgets are reported as less than Marketing budgets it makes it harder to support statements concerning the amount of focus on industry on search for new drugs.

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34. Sili on June 28, 2011 3:51 PM writes...

As much as it goes against much of my personal political philosophy, there are many, many cases where government deregulation has hurt companies, such as the phone companies, the airlines, savings and loans,...DTC fits the picture too.
Just out of curiosity: If you recognise that your philosophy is flawed, why do you subscribe to it? Permalink to Comment

35. Anon on June 28, 2011 3:56 PM writes...

In my personal observations & history of over 30 years in Pharma, I made a specific mental note that "business" was taking over from the previous emphasis on "science and innovation" about 20 years ago when the company I was working for began to regularly bring in Boston Consulting to provide strategic vision, cultural mentoring, guidance of leadership essentials, and in all this always pushing the concept of "classifying people in boxes". It soon became clear that BC's slide sets were derived from other "technology" areas---aerospace, microchips, computers, software, etc, that had only cosmetic parallels with the drug R&D business, but our management (as did those in other companys) bought the glossy presentations anyway. It got to the point where "advisors" from BC soon were actually hired in-house to help run the day to day business efforts, even without any experiene in drug R&D, marketing or sales.

All, consistent with liberties taken in direct to consumer advertising---that is, switch to business, sales, advertising, from the roots which made and built the major Pharma companies in the first place...ideas, innovation, science, acceptance of risk, independence of work focus, less concern about Wall Street image and comparison between Wall Street rewards.

Unfortunately, the previous days will not be returned, and people who continue to deny the current changes in the industry will be amongst the biggest losers---emotionally, financially, strategically, personally.

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36. downunder on June 28, 2011 6:23 PM writes...

Surely this is relatively testable given significant (first world) markets where DTC ads are not allowed? Thus can compare to USA.

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37. CR on June 28, 2011 7:04 PM writes...

@downunder...

I don't think any country (1st world or not) that can compare to the US when it comes to pharma, DTC or otherwise. No country has the open market like the US, maybe Japan would be the closest. Not the EU.

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38. befuddled on June 28, 2011 7:12 PM writes...

If nothing else, DTC advertising encouraged pharma management to focus (even more) on short-term concerns at the expense of long-term ones. I cannot see how that was good for the industry.

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39. Kaleberg on June 28, 2011 8:24 PM writes...

You can answer the question about the declining repuation of drug companies just by looking at their advertisements. From the 20s through the 80s, drug companies did reputational advertising. It's not hard. Drugs can prevent some diseases and can cure or ameliorate many others. All it took was some serious sounding copy and some pictures of sick kids. You had to be a monster not to have warm feelings for companies that were actually helping them. In the 19th century, child sized coffins were big sellers. In the 20th, not so much.

Modern drug ads are product oriented. You got X, we got Y. While I haven't seen the numbers, I can believe they pay for themselves and then some. After all, a drug company only gets so many years of high profit sales before the generics come in, so speeding peak adoption by a year or two can pay for a lot of one minute spots. They are about selling a particular product. They aren't about engendering warm feelings towards the seller, and they don't.

Now, there is no reason that drug companies can't do reputational ads. They could even use sick kids, but I'm guessing they consider it more lucrative to spend the money on ads that push product.

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40. BlueBaron on June 28, 2011 10:27 PM writes...

I think there was once a distinction between medical products and consumer products. Consumer products always work by setting expectations that encourage people to spend their money. But advertised products often don't live up to hype. People have learned to expect that, and only the unstable actually think a McDonald's hamburger will come out shiny and perfectly symmetrical when you order it. I'm reminded of Michael Douglass in Falling Down so often when I see the cynicism on this blog.

We don't readily acknowledge that these advertisements have many side-effects, and subconscious effects. One is to just tune out drug advertisements and to treat them cynically. They air constantly now. Drug companies shouldn't then be bewildered that people don't believe their mottos about saving lives.

The other effect is that some people get their expectations up, even subconsciously, and will then find a let down later when things don't work as they idealized. Medicine was seen before DTC as a serious business that didn't hype itself. The advertising in pharma, an industry essential to medicine, has spilled over to medicine itself where the patients now are more cynical and/or have more expectations. Advertisements of hospitals and doctors will just make things worse.

Failed expectations seem to drive most of the negative aspects of people in this economy. They are also a constant subject on this blog when it comes to discussions about jobs.

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41. Jose on June 29, 2011 1:29 AM writes...

Downunder: it has been done in part...

BMJ 2008; 337:a1055

Effect of illicit direct to consumer advertising on use of etanercept, mometasone, and tegaserod in Canada: controlled longitudinal study

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42. Lester Freamon on June 29, 2011 8:27 AM writes...

Part of the problem stems from the fact that the types of product that get DTC marketing are just the type that are often less "essential" than pharma's other efforts--the public gets an image of pharmaceutical companies focused on erections and other "lifestyle" issues, but you never see ads for Gleevec, Zyvox, Bortezomib etc (for good reason)--so the impression is that pharma only works on superficial issues.

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43. Antipodean lurker on June 30, 2011 1:40 AM writes...

As downunder says, the counterfactual example exists where DTC advertising is not permitted in a country like Australia (DTC is allowed in New Zealand, like the US, so another opportunity to confirm the correlation?).
The pharmaceutical industry association in Australia has conducted a reasonably recent survey in Australia. The results showed that the pharmaceutical industry basically had no reputation in Australia. Maybe that is a consequence of relative lower industry size and capitalisation in Australia, or maybe it reflects that a ban on DTC advertising lowers the industry profile? Vioxx lawsuits occurred in Australia, and other negative media stories from around the world are picked up in local Australia media.

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44. JHS on June 30, 2011 8:05 PM writes...

I know the readership around here is predominantly chemical in career, but if someone involved in medicine might chime in:

Specifically as to those claims about "drug companies not selling directly to patients," in high population density areas, with high medicaid/medicare enrollment rates, physicians are not gatekeepers. Elderly patients come in, demand a prescription, and either receive it or leave to the next physician across the street - and take a handful of their friends (who saw the same commercial) with them. Once in a blue moon you can make a stand, but it's all too easy to lose one's livelihood fighting against DTC advertising.

Just thought you'd appreciate 2 cents from the trenches.

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45. Fred on June 30, 2011 9:22 PM writes...

The drug companies have been the target of a sustained attack from the left in the U.S. They were targeted because they were major obstacles to the passage of ClintonCare in the 1990s. The goal was to establish them as greedy exploiters of patients with study after questionable study about how drug prices in the U.S. were absurdly high because companies wanted to rip people off and we needed prices controls and government run health care.

The campaign was successful. It wasn't helped by the absolutely awful PR that the companies subscribed to, their support of drugging kids with supposed ADHD, or th