DTC in Perspective: Keytruda Enters the DTC Arena
Merck’s cancer drug Keytruda recently began its DTC campaign competing with Bristol Myers’ Opdivo. What is significant is that highly targeted drug categories continue to invest heavily in DTC. Keytruda is a biologic injection that has indications for non small cell lung cancer, advanced melanoma and head and neck cancer.
The market is small by size compared to mega categories like diabetes and cholesterol where sufferers are in the tens of millions. Lung cancer cases number about 200,000 newly diagnosed annually. Of course, when the treatment price is around $100,000 per year for biologic lung cancer treatment versus less than a thousand for cholesterol drugs; the DTC payback is certainly achievable.
Roughly the numbers show a $50 million ad campaign for Opdivo and Keytruda need only gain 500 new patients from DTC to break even on a revenue basis. While consumers are the DTC apparent target, these ads also reach oncologists. Once an oncologist knows patients are seeing the DTC and will ask about the drugs, it clearly provides the motivation to consider using them.
The Keytruda ad is very different from Opdivo. While Opdivo used a headline dramatic announcement approach, Keytruda chose an individual patient story. Using an actor portrayal Keytruda showed a 60ish age woman named Sharon telling her story in a tv production studio. Sharon says she learned her type of lung cancer could be treated with an alternative to chemo. She tells how she was given only months to live but a year later after treatment she is still there with her family.
The commercial is filmed in black and white which adds to the seriousness of the presentation. Sharon’s story in this 90 second ad is told very well. It is very informative and understandable using Sharon and supers emphasizing the key benefits. What is interesting is that they are showing Sharon in the production studio both telling her story and in the makeup room preparing to be filmed. Her family is also at the studio watching her being filmed telling her success story.
The sell portion of the ad is about 30 seconds with fair balance risks and warnings in the last minute. Clearly the ad is technical in terms of disclaimers about who can take the drug and one wonders if patients who have non small cell cancer are aware of their biomarkers and gene types mentioned in the ad.
Given the high prices for treatment stock analysts see Keytruda generating revenue in the billions. A DTC campaign costing $50-100 million for a drug bringing in billions is a small risk for Merck. Opdivo had been criticized by some doctors for advertising to patients in an area best left for oncologists. This is a fair question but advertising breakthrough therapies does help potential patients become aware of their options. It also puts pressure on insurance companies to cover the large expense.
Keytruda has done an excellent job in its DTC ad. This campaign will get attention and is very different in executional style from Opdivo, an ad I also think is very good. The broader concern is whether advertising $100,000 drugs to consumers causes Congress to look more critically at both drug prices and DTC ads. While individual patients get extra months and in some cases years longer to live, government payers and insurance companies are paying a lot for that life extension. While no one wants to put a price on those months, unfortunately it is a calculation needed to be considered by policy makers.