DTC Ads Work for Prescription Drugs

Direct-to-consumer (DTC) advertising is the most effective method for building consumer awareness quickly and essential for the long-term development of brands. Its goal is to drive sales through category expansion (increase the number of buyers) and encourage buyer loyalty (repeat purchases). And in the prescription drug market, it's working--both for consumers and physicians.

The Consumer's Perspective

There are a number of factors behind the success of prescription DTC advertising, which are measurable via metrics traditionally used in the consumer packaged good (CPG) industry; the birthplace of DTC advertising. Measuring the success in generating incremental sales following DTC initiatives within the pharmaceutical industry is possible through longitudinal tracking of consumer purchase behavior for both prescription (Rx) and over-the-counter (OTC) drugs, such as Ipsos PharmTrends.

Analysis of Ipsos PharmTrends data reveals that since 1997 there has been a significant expansion in the number of US households that have filled an Rx script at least once. By 2002, the Rx buyer base had increased by 19% over 1997 levels. This double-digit growth in household purchasing outpaced the rate of growth in the US household population, which has averaged a 2% increase annually.

The aging population is only one reason for this growth. Significant expansion in ailment categories where DTC advertising spending has been strong has also contributed to Rx market expansion over the past six years. For example, the number of Rx allergy buying households increased 76% from 1997 to 2002; 153% for the Cox-2 arthritis segment; 151% for the Statin market (Elevated Cholesterol treatment) and an even more impressive 192% increase for the Rx Proton-Pump Inhibitor (PPI)/Heartburn market.

DTC has also given consumers a reason to call and/or visit their doctors. One out of five consumers has reported that an Rx drug advertisement has given them a reason to seek additional information from their doctors. This measure indicates that Rx DTC advertising is empowering consumers by helping them get involved in the decision-making process for their health and wellness. DTC is fulfilling consumers' needs for information and their desire to play a greater role in illness treatment and prevention.

In the Statin market for treatment of Elevated Cholesterol, 18% of the category buyers asked their doctor specifically for the Statin Rx brand by name in 2002, which is double the level experienced in 1997 (9%). Historically, this measure has been the barometer for determining the success of Rx DTC.

DTC advertising of branded Rx drugs has also helped consumers tap into the decision-making process for treatment of their respective ailment, whether encouraging a switch from an existing Rx or OTC drug or filling an Rx for the first time. For example, the Rx allergy market, which includes both Oral Antihistamines and Inhaled Nasal Steroids, has demonstrated significant success in changing the purchase mix for allergy treatment. The efforts not only expanded the Rx allergy buyer base but also boosted market share of OTC alternatives, both branded and generic.

Last year, half of the total allergy buyer base purchased an Rx exclusively for their allergy treatment. This is an increase of 39% since 1997. This growth not only came from new category entries but from the move to Rx by the self-medicating, OTC exclusive allergy buyer pool. A direct trade-off in allergy purchase behavior has since prevailed. OTC exclusives declined from 47% of the buyer base in 1997 to 34% in 2002. Of course, this mix has begun a bit of a reversal following the switch of Claritin to OTC availability.

Finally, DTC has demonstrated that it has a positive effect on patient persistency (buying rates), particularly in those ailment categories where consumer promotion via DTC advertising is consistent. Increasingly, consumers are stating that Rx DTC ads are reminding them to refill their existing Rx (15% in 2002, up from 12% in 2001).

These statements are supported by actual consumer/patient purchase behavior. Ad aware buyers demonstrate higher levels of persistency than those who report they are not 'ad aware' of the Rx they filled. In drug classes such as Oral Antihistamines/Nasal Steroids, Statins, and Cox-2--in which DTC spending has historically topped the charts--ad aware buyers of these drugs filled one script more per buyer on average than those not aware of ads, within the drug class. This behavior is further evidence that DTC is contributing to improved health outcomes as patients are demonstrating an increased likelihood of staying on their prescribed therapy when exposed to Rx drug advertising.

The Physician's Perspective

Qualitative research suggests that physicians' attitudes towards DTC have changed since its inception in 1997. Initially, physicians were concerned about the effect DTC will have on their interactions with physicians. However, over the years physicians appear to have become more comfortable with DTC. They have adjusted to this new phenomenon and found ways to handle patient requests and questions prompted by DTC exposure.

A survey conducted by the FDA in 2003 showed that physicians were mostly positive about DTC's effect on their patients and their practice; 40% of physicians said DTC has had a positive effect, 28% said that it had not had any effect at all, and 32% said the effect was negative. Referring back to patients who initiated discussions with them about drugs they saw advertised, a majority did not see a benefit to that interaction. However, 80% also stated that the fact that patients saw an advertisement did not create any problems on their interaction with them.

The effect of DTC on physicians has to be examined in light of a larger phenomenon: consumers' access to health related information through broadcast and print media, the internet and educational programs by companies and healthcare organizations. The result is an increasing awareness of major diseases, their causes, prevention and treatment. The key stakeholders in the industry--including physicians--recognize this new dynamic and the role it is creating for patients.