Xpectives News


DTC in Perspective: Times of Turmoil Ahead

March 13, 2017 by Bob Ehrlich0

While we are seeing record $ 5.6 billion spending numbers for DTC for 2016, we are also seeing a populist tide raging against drug companies. At the upcoming DTC National a few weeks from now we will be spending a lot of time on the forces that may affect the health of DTC in the future.

Most of us practicing the art and science of DTC have no control over political decisions on drug pricing and drug approval. That being said, it is imperative DTC marketers understand the popular sentiment consumers are exhibiting towards drug companies. The Trump movement and the Democrats are aligned in the rage against drug prices. The two sides rarely agree on anything but here they are of one mind.

Bob Ehrlich
“Every brand… must understand consumer reaction to drug prices…”
-Bob Ehrlich

The presentations we are planning on DTC are not theoretical exercises. Our goal is to educate the DTC community on what you can do to make advertising decisions in the context of this populist movement. We need to read the tea leaves that pricey drugs must be cost justified versus the cheaper alternatives. While few DTC ads address price, we all know that eventually consumers may react with sticker shock when they take their script in to be filled. We must recognize as marketers that every DTC program needs to have an element that addresses price/value.

That element may not necessarily be part of a mass media campaign because it is a complex discussion. Somewhere in the consumer campaign, however, drug companies need to discuss price. Maybe every web site needs a section on price justification. While most drug companies work the coverage angle only with payers, consumers are going to increasingly be partial payers of drug bills.

While the industry does campaigns to portray its research efforts, political forces instead focus on price versus other developed countries. I am afraid this issue is at a tipping point and DTC marketers need to figure out how to deal with it. Many price support programs are part of DTC ads, and that is a good step. Unfortunately, price subsidies address only part of the problem. Eventually, these drug company price support programs end after a year or so and then what?

I am not arguing that DTC television or print ads should directly discuss the drug price. I am, however, advocating that every brand team must understand consumer reaction to drug prices and anticipate how their DTC affects the perception of price/value. We must remember that consumers have no idea from a drug ad whether the cost is $2 a pill versus $2000. What other industry advertising its products is such a mystery to consumers? Consumers have a good feel what a car brand will cost, and they know the range of most advertised consumer goods. Drugs are different and sticker shock is likely for many new advertised drugs.

Most drug DTC marketers have no involvement in pricing their drugs. That is a top management call. What we can do is study the impact of price on consumers and try to study their attitudes in the context of proposed DTC ads. Does our ad get differing reactions based on the price pre and post consumers being told the price? Would their reactions change our creative approach? One thing is certain is that Trumpcare will not forget about lowering drug prices. That is a new reality drug makers will have to adapt to, and DTC programs will need to address it as well.

Bob Ehrlich


Leave a Reply

Your email address will not be published. Required fields are marked *