Drug industry revs up ad spending
Lunesta wakes up drug advertising market that Vioxx had sickened.
By Thomas Ginsberg
THE PHILADELPHIA INQUIRER
Wednesday, October 11, 2006
PHILADELPHIA — If you've seen green butterflies gently fluttering everywhere in the past year, you're not hallucinating.
Advertisements for Lunesta, the sleeping pill marketed with an animated butterfly by Sepracor Inc. of Cambridge, Mass., almost single-handedly turned around a slide in the industry's drug-ad spending during the first six months of the year compared with the same period last year, according to TNS Media Intelligence.
After stagnating in the wake of Merck & Co.'s 2004 recall of its blockbuster pain reliever Vioxx, total spending on drug advertising between the periods rose 9 percent to $2.46 billion from $2.26 billion. In the comparable period from 2004 to 2005, spending had been flat on the ads, a powerful marketing tool for the industry, as well as a key revenue source for ad firms and media.
Sepracor's 286 percent increase in Lunesta ad spending between the periods, from $41.9 million last year to $161.9 million this year, reflects ferocious competition for the allegiance of the sleepless among us. It far eclipsed Sanofi-Aventis' spending on Ambien, which is about to lose patent protection and get low-cost generic copycats.
Merck's recall of Vioxx because of safety problems had triggered a backlash against advertising. The industry responded by clamping down on spending, toning down ads, and adopting its first voluntary advertising code in August 2005.
The restrictions included a cutback on TV ads for erectile dysfunction drugs. According to TNS, Eli Lilly & Co. reduced spending on Cialis ads 80 percent in the first half this year from the same time last year, to $16.5 million from $83.9 million. Bayer Pharmaceuticals, which markets Levitra along with GlaxoSmithKline PLC and Schering-Plough Corp., reduced ad spending 29 percent this year after cutting it 46 percent the previous year, TNS said.
Tellingly, this year's spending increase so far has been concentrated on old media. The amount spent on magazine ads was up 30 percent in the first quarter of this year compared with the same period last year, pulling up the total, TNS said.
But to the consternation of some marketers, drug-ad spending continued to decline in all other media over the past two years, including newspapers and the Internet, with the biggest amount coming out of TV. That adds up to a still-dismal picture for some marketers.
"Although the number may be up generally, it's because of certain brands," said Robert Nauman, a principal at BioPharma Advisors LLC, a consulting firm in Research Triangle Park, N.C., that promotes online marketing.
"TV ads really lost a lot. It was plowed back into bottom lines, to make bottom lines bigger. It was not spent elsewhere," Nauman said. "Total marketing dollars are getting squeezed pretty significantly."
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