Direct To Consumer Advertising -Paul Herzich Kimberly Krynski Tim Tucker- Current Topic In Biopharma Management, BUS590W Wednesday, April 30, 2008 Richard E. Kouri, Ph.D. & Samuel Straight, MBA
Direct To Consumer Advertising
-Paul Herzich Kimberly Krynski Tim Tucker-
Current Topic In Biopharma Management, BUS590W
Wednesday, April 30, 2008
Richard E. Kouri, Ph.D. & Samuel Straight, MBA
Presentation Outline
●What is Direct To Consumer (DTC) Marketing
●PEST analysis of DTC
●Future Developments and Conclusion
What is Direct To Consumer (DTC) Advertising?●The collective marketing efforts of drug
manufacturers aimed at the patients who take their medicines –FDA.GOV
●Types of ads■Promotional■Reminder■Help seeking
Example # 1
●Do you know what Drug I represent?○ Lamisil
●Do you know what disease I fight?○ Fungus infections
●Do you know what Company I represent?○ Novartis Digger the Dermatophyte
Example # 2
●Do you know what Drug I represent?○ Nasonex
●Do you know what disease I fight?○ Seasonal Allergies
●Do you know what Company I represent?○ Schering-Plough The Nasonex Bee
Example #3
●Same Questions:○ Pfizer○ Erectile Dysfunction○ Viagra
Talk about promoting masculinity!
Political Analysis
●History of DTC●Only 1st world country with free-market
healthcare●Next president will push for price controls on
drugs●FDA regulations getting stricter
Economic Impact
●Pharmaceutical advertising-to-sales ratios are among the lowest for experience goods.
●Less is spent on advertising per unit
Demand drivers in Pharma ● Many demand forces exist:
○ Media thru Medical journals could publish some ground-breaking finding ➔ patient demands product
○ Physicians organization recommends for use of a “gold standard” therapy ➔ physicians increase “scripts”
○ Media reports negative side-effect of therapy ➔ patients stop buying the drug with possible litigation
○ DTCA ➔ patient inquires about specific product
○ Increased patient population ➔More people taking drugs
Q0
D
MC
MRATCQ
1
P0
P1
Profit-maximizing
Strategy
P2
Q2
Volume-maximizing
Strategy
Economic Model of Non-Competitive Goods● Typical of Monopolies (e.g. patent
protection)● Optimal Quantity is where:
Marginal Revenue = Marginal Cost, correlating to Demand
Making a model
Societal Impact
●Public perception●Physicians - pressure●Patients – product recall in the office●Managed care issues
Societal Impact
Technology Issues
● Internet○ Patient support sites○ Patient advocacy sites○ Physician trade groups○ Drug company sites○ Smart phone video and text messages
●Patient databases and data mining.
●Marketing feedback for "view time" or "clicks"
Good DTC strategy
●Follow the guidelines set up by the industry organization - PHRMA
●Work proactively with FDA● Increase education advertising components
○Doctor○Patient
Future Developments and Conclusions● Increase use of Internet for advertising●Federal regulations may force a change. ●Paradigm shift of industry to specialty drugs●Patient Assistance Programs ads will increase.
Questions
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