Friday, May 05, 2006

The DTC National Report

The DTC National Report

For those of you who could not attend our DTC National in Washington last week, I wanted to give you my observations about trends and issues raised at the meeting. Based on attendance, it appears that despite flat media spending, the interest in DTC issues has never been stronger. There were over 600 delegates, about 50% more than last year.

Regarding legislative and regulatory issues the attendees were given some strong warnings from industry legislative guru Jim Davidson. There are numerous potential regulations being discussed in Congress that could restrict DTC advertising. Passage depends largely on who controls Congress, with Democrats more likely to push for DTC restrictions. Davidson felt that some restrictive legislation could affect the industry in the next session, as early as 2007, whether or not the Democrats re-take Congress.

Ralph Nader was Ralph Nader. DTC is bad. Nothing the industry has done recently in terms of the PhRMA code and new style sober creative could convince him otherwise. What was interesting was that Ralph had not seen any of the new style commercials nor did he see the last three FDA DTC studies which refuted much of his concerns. Ralph, although using out of date information does reflect the opinion of many skeptical Americans about drug company advertising. He did not call for a DTC ban, but Ralph would like all advertising to include about 200 pages of risk information. Television appears to be ok with Ralph as long as we can run a two hour commercial, one minute benefit, the rest risk. He did not say that, and I am exaggerating but maybe a 10 minute ad.

Our market research presentations indicated that DTC ads still produce an ROI of over 2 to 1 based on about 70 case studies in IMS's database. Disease education ads also produce a positive ROI according to another IMS study. Clear risk information actually enhances rather than discourages consumer interest in asking their doctor for further information, said Millward Brown. AstraZeneca's Don Apruzzese provided results on a study which also showed that quality risk information is welcomed by consumers.

Our celebrity advertising presenter, Ad Age's Bob Garfield, said we will see the death of television ads as we know it, and sooner than we think. He did admit that the older drug industry target audience will be slower to abandon television so we have some time to develop alternatives. He predicts a period of chaos once television collapses as a preferred ad medium. Our audience did not buy into the imminent death of television, but Bob's presentation did make the attendees think that maybe we should be accelerating our alternate media testing.

Most inspiring was former Secretary of Health Tommy Thompson, who actually likes what we do. No surprise since he is a business friendly Republican, but after Nader bashed us, it was nice to hear we actually do good work. Thompson did ask us to work much more on disease prevention rather than disease cure because 95% of our health care expenses are for cures and only 5% prevention. This speaks to our need to encourage persistence and compliance through increased DTC efforts.

A very interesting trend is the increase in disease education and corporate PR to counter negative images. Len Tacconi of Merck shared the rationale behind Merck's corporate campaign and showed that it significantly increased Merck's consumer image scores after only six months.

What was really nice about this meeting was that 600 people gathered in a collegial setting to have a serious discussion about how we can improve our DTC. We treated differing points of view from Nader and several other critics with respect. Our attendees know that only by hearing the real views of our critics can we address them. Thank you to all who attended and presented for making this meeting a great success.

Bob Ehrlich, Chairman
DTC Perspectives, Inc.

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