Pharma Reformulates Marketing Plans
(7/19/2005)

NEW YORK (June 20, 2005) -- Pharma to TV: Drop dead. That, in a
nutshell, was the message from drug companies last week as
Bristol-Myers Squibb said it would cease consumer advertising for all
new brands during their first year on the market. Overall,
pharmaceutical marketers were wondering whether TV was worth the price
for any drug advertising.

The Eye for Pharma Marketing ROI conference in Philadelphia revealed
that while BMS may be the first to step out of the closet, most pharma
companies are becoming increasingly disenchanted with TV advertising
and are moving more dollars into alternatives, particularly the
Internet.

Their mantra: Move away from direct-to-consumer marketing and head
toward direct-to-patient marketing. DTP focuses more on grabbing the
attention of people who are already being treated by doctors, as
opposed to DTC's scatter-shot appeal to the entire population.

BMS' move should be taken with a grain of salt because while it changes
its TV, radio and print strategy it is not, as BMS spokesman Brian
Henry said, a 12-month ban on all new-product advertising. "We still
plan on communicating with consumers in that time with info about
disease awareness and product for physicians" after a product is
launched, he said.

BMS spent $35 million of its $61 million ad spend on TV last year, per
Nielsen Monitor-Plus. And despite the hand-wringing, first quarter ad
spend is down only $27 million for the entire category, to $986
million.

BMS kicked off a week of drama in the category. On June 14, the company
agreed to pay $300 million to settle federal "channel stuffing"
allegations, and two former BMS execs were indicted for allegedly
organizing the effort to inflate sales figures by inducing retailers to
take more product than they needed.

The next day, the Food & Drug Administration ordered all pharmaceutical
companies to re-label all pain relief products containing ibuprofen and
other non-steroidal anti-inflammatories with warnings on stomach
bleeding. Brands affected include Advil (Wyeth), Motrin (McNeil) and
Midol (Bayer).

"It's a tumultuous time," said David Stern, vp-marketing at Serono,
Rockland, Mass. "The return on investment for traditional advertising
is really waning . . . the Web is where we can get a return on our
investment."

Stern said DTC spending had skyrocketed, but patient demand at the
doctor's office was relatively flat. He suggested one alternative was
to custom-build Web sites for individual doctors who could then
recommend their patients seek more health information from the site.
The pharma marketer would then end up knowing more about the patients'
interests than the doctor would, Stern said -- invaluable for sales
reps on their next visit with that doctor.

Even dollars staying on TV are likely to shift from the networks to
more targeted cable options, said Chung Ma, director of marketing
science at Novartis. "We can expect there will be pressure to cut the
promotional budget," he noted. "We're starting to increase budgets in
the e-marketing area."

Ian Talmage, Bayer Healthcare's svp-new product global strategic
marketing, agreed. "I think we're going to look more at how to get
messages across so we're not wasting 50% of our spend," he said,
referring to the modest results of Levitra's Super Bowl ads.

J.R. Buzzelli, Johnson & Johnson's product director of women's
healthcare marketing, added: "Television is not the do-all and end-all
of everything."

Jack Barrette, Yahoo! category development officer, confirmed that
dollars were already moving out of TV and into his Internet display ads
and paid search formats. He said Yahoo! had received queries from the
"Big 10" pharma companies in a "tidal wave of interest" in the medium.

"You have to spend $50 million to get TV to even work," said Barrette.
"Online, $10 million can make it pop."

The fine print of the BMS policy still allows for plenty of DTC
activity, noted Mario Cavallini, manager/competitive intelligence at
SimStar, a Princeton, N.J.-based interactive marketing agency for
Pfizer and AstraZeneca. "You could have disease-state advertising in
general media that could drive traffic to a new drug Web site," he
said. "That's one way it could play out."

Competitors, naturally, were mum on BMS's move last week. One vendor,
Mike Luby, CEO of market research firm TargetRx, Horsham, Penn., said,
"Inside every major company they're looking at the pros and cons of
this approach, asking . . . is there something in this move that some
counter-move of ours could create an opportunity?"

One marketing academic took a more cynical view, noting that Congress
is eyeing reforms to DTC, where some say there's been over-the-top
spending and irresponsible ad content: BMS is "hoping it will make some
kind of impact on the government and regulatory bodies so they'll say,
'Hey look, they're trying to do something -- we'll lay off them," said
Deborah Y. Cohn, a marketing professor at Yeshiva University's Sy Syms
School of Business in New York.