Top 10 Prescription Drugs by Ad Expenditure in 2016

According to the statistics of Kantar Media, a U.S. media research and insight company, budgets of pharmaceutical companies for DTC ads are increasing year by year: the number of brands spending at least USD 50 million annually, as well as the number of brands spending over USD 100 million, have both more than doubled since 2012.

Top 10 prescription drug brands by DTC ad expenditure in 2016 (unit: USD 1 million)

From the above table, we can see that Pfizer spent most on DTC ad, with 6 brands listed in Top 10.

From the perspective of growth rate, the annual growth rate of expenditures of 8 brands reached double digit, and expenditures of all the top 10 exceeded USD 100 million; in addition, the growth rate of expenditures of newly marketed pharmaceutical products was much higher in 2016 than that in 2015.

What is DTC ad?

DTC refers to direct-to-consumer, namely, the DTC ad is ad direct to consumers. The details are introduced below:

We roughly know that prescription drug ads are not allowed to be delivered to the public and could only be delivered to professionals by professional medical media, which is a management measure made by the regulator after years of weighing the interests of each party. Let’s go back to the initial development period of pharmaceutical marketing, for example, before the 1980s in the U.S. on the other side of the ocean: at that time, such ads were not differentiated for professionals or consumers, yet, pharmaceutical manufacturers only delivered ads to professionals because of the precision!

The first prescription drug ad direct to the public emerged in the U.S. in 1983, and then many more pharmaceutical companies followed suit in succession. Just in the year before, the U.S. Congress passed the amendment to FDCA (Federal Food, Drug, and Cosmetic Act) to hand over the prescription drug ad administrative power from Federal Trade Commission to FDA.

FDA saw something wrong, and out of protecting the public, it required pharmaceutical enterprises to suspend such ads, and then started to do research and worked with several research institutions to make the corresponding policy.

FDA raised some management requirements and lifted the ban on pharmaceutical enterprises delivering prescription drug ads to the public on September 9, 1985, however, ads of such type did not grow much at that time, because doctors’ recommendations were more important than the public, just like in China in those years. Such ads started to show strong growth momentum in the 1990s: according to data statistics, DTC ad expenditures doubled from 1994 to 2000.

DTC ads have grown rapidly after entering the 21^st century mainly because of the rise of the internet and maturity of more digital technologies. Originally, it was very difficult to promote products and completely express the warning information like side effects and contraindications within a short time under the strict requirements, however, the technology now has become so mature that the profound medical knowledge could be explained via multiple channels and in multiple forms, and the precise delivery and effect analysis, etc. could be achieved.

As a result, the growth rate of Top 10 prescription drug brands by DTC ad expenditure in 2016 in the U.S. was all above double digit than 2015. According to statistics, the total expenditures reached USD 6.4 billion in 2016, with growth of 64% since 2012. The number of brands spending at least USD 50 million annually, as well as the number of brands spending over USD 100 million, have both more than doubled.

Lastly, the U.S. and New Zealand are the world’s only two countries permitting DTC ads. DTC ads are not permitted in China, however, there have been many ads hitting "edge ball": there have been prescription drug ads made to the public on TV and in pharmacies over those years, especially the diet pills.

From the other hand, restrictions of countries not permitting prescription drug ads on prescription drug ads are weakening because the internet has no boundaries, some DTC website content and video platforms are easy to be searched in countries other than the U.S., and for some new drugs, more netizens are willing to obtain relevant information through internet search.

This makes some pharmaceutical enterprises willing to increase DTC ad expenditures, for example, many on the above list are newly marketed products and some have not been marketed in China. There are data showing that the DTC ads of pharmaceutical products in their first year of marketing have accounted for as much as 13% of total category spending in the year: the proportion is high but the effect is good.

Source: MRCLUB Author: Dami