Advertising Agency Hot Topics

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Taren Grom, Editor

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PV0116_HotTopicsIn late 2015, the American Medical Association called for a ban on DTC advertising of prescription drugs and medical devices, drawing the conclusion that the billions of advertising dollars being spent to promote prescription products was helping to inflate the cost of prescription drugs. Physicians cited concerns that a growing proliferation of ads is driving demand for expensive treatments despite the clinical effectiveness of less costly alternatives.

In a statement issued at the time, 
AMA Board Chair-elect Patrice A. Harris, M.D., said the support of an advertising ban reflects concerns among physicians about the negative impact of commercially driven promotions, and the role that marketing costs play in fueling escalating drug prices, adding that direct-to-consumer advertising also inflates demand for new and more expensive drugs, even when these drugs may not be appropriate.

According to research from Kantar media, advertising dollars spent by drug makers have increased by 30% in the last two years to $4.5 billion.

In response, the Association for National Advertisers (ANA) believes firmly that such a proposal would set the U.S. back decades in terms of the information available to consumers and patients. Given that the AMA proposal came only weeks after presidential candidate Hillary Clinton’s call to ban the tax deduction for DTC advertising, it is clear that there is a major renewed focus on this important speech category. ANA believes that consumers should have more information about their health, not less. DTC advertising, under the FDA’s strict oversight, is providing extremely valuable information to millions of Americans about their healthcare.

The AMA policy also calls for convening a physician task force and launching an advocacy campaign to promote prescription drug affordability by demanding choice and competition in the pharmaceutical industry and greater transparency in prescription drug prices and costs.
The proposed
new AMA policy responds to deepened concerns that anticompetitive behavior in a consolidated pharmaceutical marketplace has the potential to increase drug prices. The AMA will encourage actions by federal regulators to limit anticompetitive behavior by pharmaceutical companies attempting to reduce competition from generic manufacturers through manipulation of patent protections and abuse of regulatory exclusivity incentives. 
The AMA will also monitor pharmaceutical company mergers and acquisitions, as well as the impact of such actions on drug prices.
Patent reform is a key area for encouraging greater market-based competition, and new AMA policy will support an appropriate balance between incentives for innovation on the one hand and efforts to reduce regulatory and statutory barriers to competition as part of the patent system.

In light of such a potentially dramatic turnabout in terms of advertising and marketing strategies, PharmaVOICE asked advertising executives for their perspective on the potential ramifications of AMA’s proposed ban on DTC advertising. The responses were a mixed bag and the conversation will likely continue throughout the year.

PV0116_KenBegasseCeoKen Begasse, CEO, Concentric Health Experience

The real issue here isn’t the value of DTC to the public. Rather, it’s an attempt to rein in escalating drug prices. DTC advertising is a convenient scapegoat because it’s publicly visible. And for the small number of brands that do advertise, there is an easy-to-identify high price tag. The fact is, drug pricing is set much like all product pricing — it’s based on value and volume and is set well before any marketing activity begins.

What the AMA is advocating essentially censors our ability to reach the American public. Although DTC advertising isn’t right for every brand, it does play a valuable role in educating the public and facilitating proactive, patient-driven healthcare — a key tenet of the ACA. DTC education increases public health awareness; helps patients and caregivers recognize symptoms, side effects, and possible solutions to their health issues; and empowers patients to seek out information and have better dialogs with their physicians, which can lead to better outcomes.

The elimination of DTC would lead to a shift into more digital marketing to both patients and physicians, but this is an insufficient replacement for DTC.

There’s no better channel than television to efficiently drive awareness and activation on a mass scale. Digital engagement promises to be the essence of the brand experience, and people will find you over time.

However, nothing can replace the immediacy and large-scale impact television can have on activating your target audience to seek information.

PV0116_JayBollingJay Bolling, CEO, PulseCX

DTC ads help patients have better discussions with their physicians and provide greater awareness of treatments. A physician survey conducted by the FDA demonstrated that when a patient asked about a specific drug: 88% of the time they had the condition the drug treated; 80% of physicians believed their patients understood what condition the advertised drug treats; and most physicians agreed that because their patient saw a DTC ad, he asked thoughtful questions during the visit.

While a ban on DTC — broadcast and print advertising — would limit the reach and speed of patient communications, for example it would take longer to reach the same volume of prospective patients, it wouldn’t impede our ability to engage patients. In fact, today’s most successful DTC campaigns don’t rely solely on branded broadcast/print advertising, but leverage multiple touch points and engagement strategies such as interactive websites, patient advocacy networks, social media, third-party partnerships, unbranded broadcast/print, paid search, direct marketing, etc.

A DTC ban will likely accelerate the emphasis on digital media and disease awareness campaigns that are educational and non-promotional in nature. It will prompt additional emphasis on relationship building through permission-based CRM campaigns, and prompt companies to adopt a more tailored approach that focuses on patient engagement vs. awareness. As a result, issues such as corporate transparency, social responsibility, added value, and access to care will all be important components of future communications in a DTC-ban environment.

PV0116_JayCarterJay Carter, Senior VP, Director of Strategy Services, AbelsonTaylor

I just don’t see this happening. First consider the first amendment issues: does the state have a right to disallow free speech from a drug company because they make a profit? Lawmakers avoid the first amendment like it’s the third rail. Second, consider a recent study showing that DTC advertising not only grew sales for promoted products, but also stimulated drug adherence, and the use of other —presumably less expensive generic — products for the disease states discussed. The latter two points are good for healthcare and people, and will likely have a positive impact on health outcomes. Finally, we’re going to be in an election year soon, and how much does the legislature really get done during election years?

PV0116_MattGiegerichMatt Giegerich, Chairman and CEO, Ogilvy CommonHealth Worldwide

While it’s certainly within the AMA’s rights to dislike certain aspects of DTC advertising, it would be nothing short of a constitutional assault to limit the freedom of speech tenets so clearly underpinning this form of communication, which has been proven time and again to improve patient care. If an Orwellian ban on consumer communication of prescription drugs were ever enacted, we would be traveling backwards in time, to a place where health literacy, engagement, and outcomes were neither rights nor a compelling determination of our citizens.

PV0116_MatthewHowesMatthew Howes, Senior VP, Marketing Innovation, Palio, an inVentiv Health company

AMA’s anti-advertising argument lacks internal logic. On one hand the association claims older, more affordable drugs are just as effective as newer, more expensive alternatives promoted in DTC ads. If cheaper drugs are as effective, why not simply prescribe those drugs more often?

On the other hand, the association claims “patient care can be compromised and delayed when prescription drugs are unaffordable.” This acknowledges that newer drugs are more effective. If so, wouldn’t you expect to pay a premium for them?

AMA’s argument is further convoluted by trying to frame the ban as a response to anticompetitive behavior in the market. It’s hard to imagine taking freedom of speech away from corporations, and even harder to imagine that removing a key competitive lever would not decrease competition.

But let’s play out the scenario. Consumers would be left in the dark about the latest healthcare advancements. They may be less likely to contact a clinician and diagnose problems earlier. The already poor dialogue between patients and doctors could worsen. And stigma around diseases like hepatitis C and lung cancer could become more pervasive.

To counterbalance these issues, pharmaceutical companies would redeploy their resources to develop more unbranded educational content and adherence programs. A heavier investment in content strategies could be a good thing for advertising. It would necessarily drive creation of new roles, new models, and new partnerships in the industry.

Anti-advertising proponents could make more effective arguments if they focused on the benefits of a ban, instead of whining about ad proliferation.

PV0116_JoeKuchtaJoe Kuchta, CEO, GA Communication Group

It is interesting — and odd — that the AMA is calling for this ban now. Seems to me that as an industry we have been working through physician concerns and the sensitivities of doing responsible DTC since the early 2000s.

We now live in a world of intensely educated people when it comes to their health conditions, the diseases they battle, and the treatment options available. Certainly the Internet and 24/7 instant access to information that was previously only available to trained clinicians has made everyone smarter. Is that wrong? Is that threatening to physicians? It shouldn’t be. The vast majority of physicians we engage with have found a way throughout this period to navigate their patient discussions when they come armed with this type of intelligence.

As companies increasingly reach out through many media channels to communicate this sought-after info, the burden is and has always been on doing so with utmost accuracy and responsibility. Every pharmaceutical and device company that I know — as well as their agencies — have clearly understood this and have embraced that responsibility. And as we all know, the FDA also effectively polices it.

Banning deceptive, inaccurate, and misleading information is a noble cause. We should all work hard to eliminate that type of communication. But categorically saying all DTC activities should cease and desist would be removing a significant way in which many people become aware and then much more knowledgeable about the choices they have in their own care.

Neil Matheson, Global CEO,  Huntsworth Health

DTC advertising is a means to an end and not the end itself. It is one of many tactics that should be integrated into patient awareness, education, and engagement programs. The purpose of a DTC program is to build awareness, inform, and to drive engagement with online content. DTC plays an important and valuable role in generating disease awareness, helping patients identify with symptoms and encouraging them to seek treatment, building awareness of the availability of new treatments, and enabling patients to engage in a meaningful dialogue with their physicians. In a patient-centric world the role of DTC is even more critical as patients take an active and informed approach to decisions regarding their own health and well-being. Without this important tool it would be very difficult to improve patient outcomes and quality of care through integrated programs that facilitate education and enhance patient-physician relationships.

If such a ban was implemented the money that is presently being spent on DTC initiatives would be best diverted into programs that drive patient engagement online and facilitate the dialogue that is necessary for physicians and other healthcare providers to understand patient needs and improve outcomes.  Listening to patients, aligning their needs with physician expectations, and ensuring that informed decisions are made collaboratively to deliver the best possible patient outcomes will deliver the value that all stakeholders now demand from the healthcare system.

Ed Mitzen, Fingerpaint  

I may be an outlier here, but I would love for this ban to go through. It would force us as marketers to get more creative, and also drive the work to be more about disease awareness and patient care, instead of driving one particular brand in the eyes of consumers. It would help dramatically increase the public’s perception of pharmaceutical manufacturers, as they finally would see all the great work being done to help eradicate disease and improve human wellness. I am probably not the only one who tunes out when they see a drug ad on TV nowadays, as they have gone from valuable communication tools to fodder for Saturday Night Live and Howard Stern. The ads have become a “sea of sameness,” where they all look alike and provide little to no differentiation for the brands. We can do better as an industry.

Maryellen Royle, President, Tonic Life Communications

No doubt, a ban on DTC advertising will have ramifications for both consumers and industry. However, regardless of how — or if — a ban is implemented, as healthcare communicators and marketers, we continue to have a responsibility to help consumers navigate an abundance of clinical information to better understand their risk factors for disease, seek appropriate health solutions, and manage their overall health.

Critics of DTC ads may be ignoring the fact that most consumers are very aware that DTC ads are just one source” of information. They are already seeking information from a plethora of other sources — doctors, family, patient groups, social networks, editorial, government — to help inform their decision-making process before they agree to a new procedure or start a new therapy.

The healthcare advertising and PR industry needs to continue to deliver strong and accurate brand and disease awareness materials and expand their reach to consumers, beyond traditional paid ads, to other channels where consumers are looking for this information. We’re a creative bunch, and I’m confident that our industry will stay ahead of any changes that come our way.

By no means is this the first or will it be the last time we’re required to shift strategy to be successful.

Marc Sirockman , Executive VP & General Manager, ArtcraftHealth

The AMA’s proposed ban on direct-to-consumer advertising of prescription drugs and medical devices would level the playing field and create more pressure on pharmaceutical companies to develop innovative ways to communicate with prescribers. Currently, big pharmaceutical companies with larger budgets have the ability to advertise through a multitude of channels, whereas smaller companies do not. If direct-to-consumer advertising were banned, all marketers would have the same opportunities to target their markets effectively while having to innovate ways to market specifically to prescribers rather than to consumers.

Alexandra von Plato, Group President of North America, Publicis Healthcare Communications Group (PHCG)

Because we’ve been focused on the DTC TV and print advertising, we’ve actually constrained the brand’s narrative. Brands have a story to tell. They have an origin story — how they were made, what they are made from, who discovered them — there’s the scientific story, and there are many personal stories.

We have to use longer formats in powerful ways, episodic content to create more surface area and more ways to communicate with people across more channels.

DTC has been a great service to consumers in terms of creating engagement and making them more informed.

The next generation of DTC communications will not be advertising dominant; it’s going to be content dominant. It’s a way for pharmaceutical companies to package valuable substance with the sell. And that’s going to help us help people understand complexity better and ways for patients and healthcare professionals to have more information and be more informed.

The proposed DTC ban is just one of the results of increasing scrutiny on the price of prescription medications, which will no doubt continue to be a hot topic during 2016 as the presidential election also continues to heat up.

In late 2015, the Kaiser Family Foundation released a report saying a high cost of prescription drugs remains the public’s top healthcare priority. In the past few years, prices on generic and brand-name prescription drugs have steadily risen and experienced a 4.7% spike in 2015, according to the Altarum Institute Center for Sustainable Health Spending.

According to a recent IMS Health report, global spending on medicines will reach $1.4 trillion in 2020.

Ken Begasse, CEO, Concentric Health Experience

This issue must be addressed for our industry to regain the public’s trust. Drug pricing must be tied to value, real clinical value. It starts with our industry eliminating profiteers of circumstance, who offer drugs that are so overpriced compared with their discovery or acquisition costs that those who need these drugs can’t get them. These few are driven solely by profit, not by patient benefit or scientific innovation, and they tarnish all the good our industry does.

We can create positive sentiment if we help the public understand the value of our innovations. We need to reinvigorate the appeal of our industry by changing the perspective of medicine, gaining trust and admiration that looks beyond the price tag and instead garners amazement of humankind’s insatiable desire to heal itself. The American people need to see the scientists behind the companies who are responsible for changing the course of disease in the 21st century. Hepatitis C, HIV, cancer, and cardiovascular disease, all diseases with high mortality, have become treatable conditions over the past decade. These miracles are valuable assets to use in our discussion. The time is now. We are embarking on an exciting era of innovation in health.

Jay Bolling, CEO, PulseCX

To combat the negative publicity about prescription pricing, the industry has to change the conversation to one about value and not price. Unlike other expensive consumer goods, prescription medicines save people’s lives and cut healthcare costs. They are very expensive to develop and most never see the light of day. PhRMA has all the statistics — we just need to communicate them: only 12% of drugs entering clinical trials ever make it to patients; on average, it takes more than 10 years and $2.6 billion for just one medicine to make it to market; and thanks in part to innovative medicines, U.S. death rates have dropped significantly in the past decade — HIV/AIDS almost 85% since its peak, cancer about 22% since its peak, and cardiovascular 31%. Spending on retail medicines has consistently accounted for just 10% of healthcare spending.

The U.S. healthcare system could save $213 billion annually if medicines were used properly. Every additional dollar spent on medicines for adherent patients with congestive heart failure, high blood pressure, diabetes, and high cholesterol generated $3 to $10 in savings on emergency room visits and in-patient hospitalizations. In the fight against Alzheimer’s disease, new medicines approved by 2025 that delay the onset of the disease by five years would reduce the number of people with the disease by about 40% and avoid $367 billion annually in long-term care and other costs by 2050.

Matt Giegerich, Chairman and CEO, Ogilvy CommonHealth Worldwide

Changing negative public opinion about drug pricing will require a resolute, coordinated communications approach far less grounded in the notion that high drug prices are necessary to fuel the high cost of drug discovery. Research confirms that once someone is settled on a point of view, it becomes more and more difficult to sway his or her opinion by providing more facts and data. In many cases, this actually tends to further reinforce the individual’s established position. Instead, and also proven via research, the industry should consistently, relentlessly express the real, human, moving, emotional stories about patient health outcomes that are so central to the industry’s collective mission. This is the key to changing the public’s opinion and shifting the perception of the industry to a higher plane.

Matthew Howes, Senior VP, Marketing Innovation, PALIO, an inVentiv Health company

In the United States, we love free markets, but do we love free medicine more? That’s the underlying question when it comes to the topic of drug pricing. The economics of drug development are not well understood by the public at large, nor is the reality that Americans shoulder the burden of drug development costs disproportionately to the rest of the world. To address this gap in understanding, the pharma industry has a unique opportunity to lead a national, public debate to resolve the question, “Should the economic rules of supply and demand still apply when it comes to saving lives and caring for the sick?”

It’s hard to embrace capitalism and get your hands around pricing caps at the same time. This is partly why the debate over drug pricing is an emotionally charged one. It pits a closely held identity as a free-market society against deep-rooted beliefs in promoting social responsibility and protecting public interests.

Neil Matheson, Global CEO,  Huntsworth Health

There are two commonly used pricing methodologies — cost-plus pricing and value-based pricing. The pharmaceutical industry has traditionally used a cost-plus approach as a basis for drug pricing with the goal of quickly recovering the significant costs of drug development, and with the newer biologics manufacturing, and maximizing profits through to the end of the available patent life. Other factors impacting price are the size of the potential market for the drug sales (the number of potential patients/prescriptions) and sales and marketing spend–which some critics wrongly suggest is the sole driver of the high price of drugs.

Today’s value-based world calls for innovative pricing strategies that focus on the ‘true value’ to the patient, healthcare professional, payer, and the healthcare system as a whole.  That value must be measured in terms of improved quality of care with resulting reduction in utilization of high cost health services such as ER visits, hospitalization, surgery, and other expensive interventions. Effectively managing other contributors to poor health such as obesity, lack of exercise, smoking, stress, and malnutrition is also critical to the value equation.

The industry must focus on delivering real value through relevant and meaningful patient outcomes with a resulting reduction in overall healthcare system costs rather than being lured into a debate about the high cost of pharmaceuticals, which only leads to an attempt to justify and defend drug prices based on high research and development costs.

Communications programs can then be developed to support this value-based strategy. The industry must be more proactive in this regard and lead the discussion rather than react to it.

Maryellen Royle, President, Tonic Life Communications

The debate about the pricing of ethical drugs is not new and will continue to be a hot topic for as long as pharmaceutical companies remain in business. It is worth stating that the industry often struggles to clearly explain pricing and sometimes resorts to defensive strategies to explain the pricing approaches taken. With this said, the pharma industry is committed to innovation in the interest of patients — improving healthcare and saving lives, as evidenced by incredible advances in treating cancers, infectious diseases, and rare diseases over the past 30 years. Innovation and the study of disease require investment. Moving forward, improved transparency and emphasis on education about today’s drug discovery and development process will help the public and critics better understand the pharmaceutical business and be less weary of its motives.

Marc Sirockman, Executive VP & General Manager, ArtcraftHealth

The industry can address the complex subject of pharmaceutical drug pricing by discussing the quality and prolonging of life and demonstrating the value of their products in this context, particularly in relation to other drugs and options. It is critical to include the general public in this discussion, and social media may be the best avenue to target them appropriately.

Traditionally, the pharmaceutical industry has relied on policymakers as a means to gauge drug pricing. Now, direct communication to patients on an elementary level about the value and benefits of a drug can be a transparent and straightforward way to address the complex issue of its price. A strong PR campaign could effectively assist in communicating the appropriate message in each unique situation.

Alexandra von Plato, Group President of North America, Publicis Healthcare Communications Group

We need to put another conversation into the market because patients want choice. You go to a doctor because you want her opinion. We want people to take a stand that they want their physicians to have more choice and more control. The industry needs to support healthcare providers (HCPs) more. We have to create advocacy for the people who are on the front lines of healthcare, such as doctors, nurses, and other HCPs. They’re the ones who need rights and choice when it comes to prescribing. It’s the medicine they want patients to have and not what the health insurance company wants to pay for. That’s what the pharmaceutical companies can do that they are not doing. We need to move from asking how much things cost and what’s broken to what people want; they want the best medicine and they want their doctors to have the choice to use it. Choice is something people are willing to pay for. We can change the conversation to one of choice and excellence.  (PV)

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