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April 21, 2017 Bob Ehrlich0

No, the above is not a movie title. It is referring to an op-ed in the 4/17 Washington Examiner defending DTC by former FDA official Peter Pitts. The op-ed lays out the case why the attacks on DTC are flat out wrong or fake news as Mr. Pitts calls it in the title. Mr. Pitts correctly debunks the argument that drug companies spend more on marketing than R&D. He points out that the drug industry spent $70 billion on pre-approval R&D versus $5.6 billion on consumer advertising. He says you have to add a lot of detailing, sampling, written communications to physicians, administrative expenses, and other expenses that would not be considered marketing by most of us to exceed R&D spending. Based on several sources I found it is really about $20-25 billion spent on true marketing activities including consumer/physician advertising, physician education and sampling.

Bob Ehrlich
“Thank you Mr. Pitts.”
-Bob Ehrlich

The news media and drug industry critics like to make DTC the fall guy for high prices. Mr. Pitts correctly points out there is no evidence of that. I have said in the past that actual DTC spending is much less than reported spending at about 70% because drug companies pay less as volume buyers of ads. So that $5.6 is really about $3.9. IMS reports U.S. drug spending of $310 after discounts in 2015. How much can $3.9 drive price in a $310 billion market. Very little. While it is true DTC does raise awareness for new branded drugs, DTC is also the raising of awareness of competitive drugs. Payers play one DTC drug against another to get lower prices.

Mr. Pitts reminds critics that DTC has many benefits of raising awareness of diseases, and in 6% of DTC inspired doctor visits a previously undiagnosed condition is found. He also says only 7% of doctors report feeling pressure to prescribe an advertised drug. Mr. Pitts admits drug makers do DTC ads to sell more product. That does not make it bad or hurt public health.

As I have said in many previous columns, the world of prescription drugs has numerous constituencies. There are no truly objective ones despite a widespread belief that the doctor is always prescribing what is best. Doctors prescribe what they are experienced writing, and some are reluctant to adopt newer drugs. They may not be current on the newest treatments because of time constraints. Insurers obviously want to pay as little as possible on their drug bill and resist branded drugs. Government also is not anxious to pay for expensive drugs given the budgetary issues faced. DTC is just one more subjective constituent making a case for patients, doctors, payers, and government to consider a new brand.

So, thanks Mr. Pitts for warning the public not to fall for convenient sound bites against DTC ads.

April 17, 2017 Bob Ehrlich0

As I sat through the many DTC presentations last week at The DTC National Conference I took note of the people actually creating DTC. They all struck me as passionate about their products and their customers. While it is easy to be cynical about the drug companies as corporate entities it is harder when you see their employees discuss DTC.

I wish Bernie Sanders could have a dialog with these people who actually create DTC ads. It is easier to hate a multibillion dollar corporation than the people who work there. In 17 years of doing these conferences, never once did I hear a drug company delegate publicly or privately state a desire to put profit over patient well being. That does not mean there are no issues on pricing, overuse, safety or effectiveness. What it does mean is the people who work on these drugs really do care deeply about helping patients.

Bob Ehrlich
“Making a profit while doing good…”
-Bob Ehrlich

We heard about the great new PhRMA GoBoldly industry campaign from its agency creators Y&R. What we saw was the use of real researchers who work at the drug companies tell their stories on developing new drugs. We might think from listening to critics that drug researchers are working on “made up” diseases just to hook us on treatment. We see in reality researchers spending their whole careers to cure cancer, Alzheimer’s, depression, diabetes, asthma, and many others. They care about patients, not something you hear from our critics, who see conspiracies at every turn.

While it is very clear that our advertising is meant to create awareness and designed to sell more product, that is not a negative. In fact all the competitive DTC leads to better products and more price competition as payers and patients are aware they have choices. True, if every doctor and insurer was totally knowledgeable and acting always in the patient interest, maybe DTC would not be needed. We know, however, that is not the real world. DTC just acts as a catalyst to make all constituencies more aware what is out there. DTC provides a push for insurers to cover new treatments as we know they will hesitate based on cost.

One of the interesting recurring discussions was over how to deal with price. We had several legislative experts tell us what Congress may do to lower drug prices. It is likely something will happen to mandate, encourage, cajole, embarrass, or incentivize drug companies to lower prices. There are a menu of options and none of them great for drug companies. The bottom line is the American consumer does subsidize prices for Canadians and Europeans. That is a very difficult reality with no good solution.

Dr. David Kessler, former FDA Commissioner, said he is not anti DTC, but thinks we must understand that advertising high price drugs may be a step too far. He was against DTC branded ads on television when he left the FDA in 2/97 and after he left we all know in 8/97 it was allowed. He does appear to accept DTC as he says it is the “purest” form of advertising because it follows approved labels. He warns us not to ever do off label DTC, something the courts may eventually allow but no drug company will likely risk doing for DTC. Off label use is something better left for drug company and physician discussions.

The many case studies we heard from drug marketers clearly showed the first priority for them is to educate and help patients. While well aware of the need to get a positive ROI they see that as the end result of helping patients. It was great to spend a few days with this group of dedicated professionals who chose to work in this industry to help people. Profit is what drives the engine for drug makers, but making a profit while doing good is not an inconsistent goal.

April 11, 2017 admin0

The leading forum for direct-to-consumer (DTC) advertising thought leaders honored a dynamic group of pharmaceutical companies and brands at the much-anticipated DTC National Advertising Awards. The awards were part of the 17th Annual DTC National Conference held April 5-7 in Boston. Sponsored by Health Monitor Network, the 2017 Advertising Awards showcased the best marketing and advertising across 17 categories.

“The DTC National is exciting each year for us as a celebration of the creativity and effectiveness of DTC consumer promotion,” says Ken Freirich, President of Health Monitor Network. “As an entrepreneurial company developing creative solutions to facilitate patient and HCP dialogue, we are pleased to sponsor the awards and to recognize the many successes in the marketplace.”

The 2017 Ad Awards showcased exemplary work spanning multiple media and strategic categories. During the Advertising Awards Dinner held on April 6, Gold, Silver, and Bronze winners were announced for all 17 categories.

“We are proud to celebrate our 17th Annual DTC Ad Awards ceremony,” says Bob Ehrlich, CEO of DTC Perspectives. “The inclusion of new categories and more awards over the years is a reflection of the success of the industry as a whole. Congratulations to all of the winners and we look forward to recognize innovation for years to come.”

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April 3, 2017 Bob Ehrlich0

The basic problem in American politics today is we are asked choose a side. Either we are supposed love Obamacare or hate it depending on our political affiliation. That we somehow must think Obamacare has been either a savior or villain is the fault of our self serving politicians. Both sides are equally to blame. Democrats seem to love government based solutions and Republicans like to think that if we could just get government out of the way all our problems would disappear. The older and hopefully wiser I get the less convinced I am that either side is right espousing ideological purity.

Bob Ehrlich
“Unless we fix the underlying issues deductibles will keep rising.”
-Bob Ehrlich

Here are the problems we face no matter what side you are on. Obamacare greatly expanded coverage but premiums and deductibles rose significantly particularly for those making a middle class salary. While most of us get coverage through employers that doesn’t mean we are unaffected by Obamacare. Employers have held premium increases somewhat in check but have done that by increasing deductibles.
Obamacare did not achieve the promise of lowering premiums for the average family. That certainly did not happen for most of us covered by employers. On the other hand it did allow many lower income people to get basic coverage through Medicaid and the exchanges. That is a good outcome for them, but we all subsidize that through higher taxes and increasing costs for our healthcare.
Like it or not we are now a country that has shifted much more of the healthcare cost burden to the consumer. This is mostly through those higher deductibles. They rose 12% in 2016 for the average employer based plan to $1478. That is cheap compared to people buying plans on healthcare exchanges where the family deductible will be over $12,000 in 2017 for the Bronze plan. With that kind of deductible most families are just getting a plan which they can use when serious illness hits.
So why are deductibles so high? First we added a lot of people with pre-existing conditions. Second we capped the cost of coverage to older folks while charging young people more than their fair share. Not enough young people are signing up so we are seeing insurers raising deductibles to lower their exposure.
Republicans and Democrats must get around the war of ideology and actually work the problem. A dose of competition across state lines is an option to consider to increase the number of insurers in the market. So is a reduction in mandated benefits to lower the cost to the younger age population. There are better ways to provide health services at lower cost such as reducing regulation to allow more physician assistants and nurses to do what physicians do.
There is no shortage of good ideas. The barrier is we have this ridiculous idea that you must love Obamacare or think it is the end of civilization. Republicans shout for all out repeal and Democrats blindly call for expansion to single payer. How about we meet in the middle? There is no shame in admitting Obamacare has some good points and bad points. There is also nothing wrong in thinking HHS boss Dr. Tom Price has some solid ideas to lower costs. Instead Nancy Pelosi and Chuck Schumer have continually vilified him as someone who wants to take away your coverage.

President Trump has shown little desire or aptitude for getting into the policy weeds here. He ran on Obamacare being a disaster but beyond a few talking points I doubt he understands the realities of reform. It will take political courage to compromise and blend free market reforms with Obamacare. Right now the war in Washington will prevent that. Dems want to pander to the progressive wing and Republicans are unsure how far right to go trying to appease the Freedom caucus.
Unless we fix the underlying issues deductibles will keep rising and all of us will be essentially self insured except for a catastrophe. That is not all bad since spending our own money will make us more cautious consumers. We will demand less testing and negotiate harder with providers. More services will be developed to help us evaluate price/quality of physicians and hospitals. That will make providers focus on value based marketing.
It is not surprising why Congress’ approval rating is so low. And healthcare is a perfect example of the failure to help the American people because of pig headed ideological positions not based on facts. They deserve the criticism and they are on a path to zero approval. Sad indeed but here we are unless moderates re-emerge on both sides to actually solve problems. That is something that will take guts, and guts are in short supply right now on Capitol Hill.