Category Archives: pharma

Of bariatric searchers and women’s knees

Have you heard of gender-specific knee replacement? It’s a marketing push by some in the orthopedics industry, and it provides a fascinating look at how direct-to-consumer marketing in health care is growing stronger every year — first with pills, then with screenings and treatments, and now implants.

Consumer healthcare communications have been around for more than a century (Coca-Cola started out as a pharma pitch with 5 ounces of coca leaf per gallon of syrup, the same root source of cocaine), but really took off in 1997 when the FDA began allowing pharma firms to broadcast specific drug names to the U.S. public. Pharma had always been aggressive; there are about 100,000 pharmaceutical sales reps in the United States calling on 830,000 healthcare professionals who make prescriptions. But advertising spending skyrocketed after the rule change from $700 million DTC in 1997 to $4.8 billion in 2007.

Some critics don’t like this, saying healthcare promotion drives up health costs, stimulates unnecessary demand, and disrupts physicians’ practices and expertise as consumers walk in demanding a purple pill. But these critics also miss two parallel trends that cannot be stopped — the rapid adoption of internet use to find solutions, and the rapidly aging Baby Boomer generation tipping into retirement.

Pew has reported that 80% of U.S. consumers with internet access search for health information online every year. We tested this in one hospital market recently, and ran Google ads for two days for search terms related to bariatrics. Hmm. Consumers searched on these terms 6,706 times within two days — only within the hospital’s catchment area — and the ads generated 55 visits to the test web site at a cost per click of $1.27.

Let’s see. If 8% of the consumers who reached the web site filled out a lead form, that would be $15.87 to identify a potential patient in the market for surgery. We’re not sure what the margin is on bariatrics operations, but it’s probably higher than $15.87.

Which brings us back to artificial joint replacement. Some ortho groups are promoting gender-specific knees, since men and women typically have different size knees and so the implants need to be tailored to fit exactly. Others might say the reality is knee replacements already come in a wide range of sizes, and it doesn’t matter if your leg is male or female — the orthopedics surgeon will get the exact size parts for your leg anyway.

Does it matter? Consumers with knee problems need help. Surgeons who offer this practice need to market their services. By using media to promote the surgery, and using a sexy offer — hey, parts that fit my gender! — surgeons are building patient volume while educating the public that help exists for joint pain.

Like it or not, healthcare marketing to consumers is a genie out of the bottle. The question for health providers is: Are you letting the millions of consumers searching for health solutions find you?

We’ll get you, Lipitor, and your little dog too

Which would you rather buy:

1. An overweight, metal-bound, inefficient internal combustion engine that pollutes the very air you breathe?
2. A BMW, the ultimate driving machine?

Consumers demand a bit of spin, which is why we think the hue and cry over Dr. Robert Jarvik is off base. Some critics claim that the Pfizer campaign, which pushes the $12.7 billion drug Lipitor, stretches Jarvik’s cred too far: while he did invent the artificial heart, they say he’s not licensed to practice medicine. And he doesn’t row one-man sculls across pristine mountain lakes (seems one spot used a body double).

If Pfizer stretched things a wee bit, it’s because consumers need it. People don’t want lies, but they do seek value, and actually require colorful data to make informed choices about the future. A recent study by California Institute of Technology and Stanford found consumers will like wine better if they are told it comes from a $90 bottle vs. a $10 bottle.

Play this forward, and you’ll see marketers must make claims if they want to compete among consumers. People chase brands and medical experts because we’re all trying to anticipate pleasure. Like cavemen and women lining up for spring procreation, we size up opportunities based on how good we think they’ll make us feel. Humans probably survived evolution based on information that predicted outcome; ancient mothers said don’t eat the poisonous berries, and our ancestors didn’t. Coloring the story is the only way to capture attention, because our history demands it.

A pill that slashes cholesterol by 39% to 60% is nice. But a hip boomer who put a robot in peoples’ chests, soars across mountain lakes, and tosses sticks to a cute dog that may or may not be his — man, now we know we’re gonna feel good.

The cost of pushing pills: $61,000 per physician

A new report finds the pharmaceutical industry spends twice as much on promotion in the U.S. as it does on research and development. The numbers work out to about $57.4 billion in total advertising and sales promos, or $61,000 per physician, or about $190.82 for every man, woman and child in the United States. Just under 7% of the total, or $4 billion, was spent on direct-to-consumer advertising.

There are three ways to look at this. On one hand, Merck, Pfizer, Bristol-Myers Squibb, Eli Lilly, Aventis, Sanofi-Synthelabo, AstraZeneca, and Wyeth could be driving healthcare costs through the roof with these huge investments in promoting new drugs. On the other, stimulating market demand for emerging remedies builds the revenue funnel that allows breakthroughs in medicine to happen — and without a profit motive, new drugs would never make it through the complex pipeline to save you from cancer 20 years from now.

The third conclusion: Healthcare is a field in which advertising and promotions work. No one invests $57 billion without getting a return. We’ve heard regional hospitals argue, sure, that’s great — but we don’t have billion-dollar budgets like pharmas. Well, if pharma spends $13.30 per U.S. consumer for D2C advertising, and you have 200,000 consumers in your hospital footprint, the equivalent advertising budget for a 300-bed regional hospital would be $2.6 million. That’s manageable, and if you’re spending less, you’re underperforming.

There’s a lot of debate inside hospital walls over whether consumer decision pathways and physician referrals can be manipulated. We find it interesting that big pharma bets so much that they can.

(Credit to Marc-André Gagnon, the Département de Sociologie, Université du Québec à Montréal, Montreal, Quebec, Canada, and Joel Lexchin, the School of Health Policy and Management, York University, Toronto, Ontario, Canada.)

Big pharma lessons in the media mix

The recent tussle over an FDA bill which could have restricted some direct-to-consumer advertising from pharmaceutical companies has a lesson, buried within, for local hospitals or health awareness campaigns. WSJ reports that of $5.3 billion in pharma ads in 2006, 55% was spent on TV, 36% on magazine, 4% on newspaper, and only 2% on radio and outdoor.

We find this interesting because regional hospitals often spend heavily on TV during branding campaigns, and then go deep into outdoor and local newsprint … while not touching magazines. Pharma loves glossy print. Local hospitals don’t. What gives?

Pharma marketers are smart. They pick TV because older demos “over index” on heavy TV consumption, and diseases are a function of age. They pick magazines because of all media categories, women — who make the majority of healthcare decisions around the home — over index on magazines. If you work in health care communications and don’t have magazines in your plan, it’s worth revisiting — you could test glossies with unique 800 numbers, zone the buy in tight geographies without going national, and potentially have a new home run in your media plan.

And as for the old, old argument from some hospital execs who say advertising doesn’t work in influencing physician referral patterns, we say this: Ask pharma why they spent $5.3 billion last year talking to consumers. And then ask your doctor.