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When it comes to American exceptionalism, it’s hard to beat prescription drug TV ads. Viewers in the US are bombarded with appeals from makers of medications treating everything from arthritis to psoriasis — and more recently weight loss. The commercials — which inevitably feature scenes of smiling people living life to the full while a narrator rattles off a list of possible side-effects — are ubiquitous and irksome. Outside of the US, only New Zealand allows such things.
Change may be coming. The White House is reportedly considering measures to limit pharma companies’ ability to conduct so-called direct-to-consumer advertising. Senators introduced a bill this month that would ban the practice altogether, arguing drug ads drive up healthcare costs by steering patients towards more expensive drugs when equally effective cheaper generics are available.
For a hint of how much drugmakers could lose from this move, look at how much they spend. The pharmaceutical industry deployed over $5bn on national TV ads last year, according to ad measurement firm iSpot. AbbVie, the biggest spender, stumped up $635mn on traditional TV ads to promote Skyrizi and Rinvoq. US sales of the two blockbuster autoimmune drugs generated about a quarter of the company’s revenue last year. Eli Lilly is another major ad buyer. It spent over half a billion dollars last year on TV ads for its diabetes and weight loss treatments.
There are two risks for these companies. One is that patients and physicians opt for alternative drugs. There are ways to mitigate that, though, such as marketing to the doctors themselves. A bigger concern might be that patients, unmolested by drug ads promising a happier, healthier life, may not take their complaints to a doctor in the first place. Again, there’s a workaround: “disease awareness” campaigns, in which drugmakers coax viewers into treatment without naming their products. Or in the absence of a blanket ban, they could just take their drug ads to other channels, such as social media.
For TV network operators, the prognosis looks glum. Revenue generated from prescription drug commercials has been one of the few bright spots in an otherwise soft advertising market. Spending on pharmaceutical advertising is on the up even as audiences and advertising revenue for non-streamed TV have declined. The pharma industry now accounts for more than 13 per cent of all national TV ad spending, up from less than 10 per cent just three years ago, according to iSpot.
The Big Four networks — NBC, ABC, CBS and Fox — collectively took in nearly $2.7bn in drug ad revenues last year. That may not be a lot compared with the $258bn the networks’ respective parent companies generated. But traditional TV has been losing its lustre for years. Banning drug ads would leave these operators with an unpleasant case of cold turkey.
pan.yuk@ft.com
