Weighing Big Pharma’s Consumer Pitch

Direct-to-consumer advertising gets a bad rap in Canada. But is it really such a negative force?

The essentials

Direct-to-consumer advertising by pharmaceutical companies has long been a controversial practice. Illegal in most countries and tightly circumscribed in Canada, DTCA has been criticized for skewing prescribing behaviour, encouraging patients to be treated for under-diagnosed conditions, and driving up drug costs. But research by Ceren Kolsarici, a Queen’s School of Business assistant professor and Ian R. Friendly Fellow of Marketing, shows that as a pharmaceutical brand gets older, DTCA loses its effectiveness. She says the claim that DTCA leads patients to convince their doctors to prescribe advertised drugs is not strongly supported by research. By contrast, it is the direct-to-physician marketing campaigns by pharmaceutical representatives that are the most effective across a product’s lifecycle and generate the most sales.

When the post-coital, bouncing Viagra man first appeared on Canadian television in mid-1999, jovially waving to his neighbours to the tune of “Good Morning,” he not only heralded the arrival of the little blue pill. Though it had begun in print media two years earlier in the U.S., with him essentially came direct-to-consumer advertising (DTCA) on Canadian television. And so began the debate about the benefits — and perils — of this form of advertising, which promotes drugs directly to potential patients.

Fifteen years on, the negative implications of DTCA are still being debated. Given the practice is banned in all countries, save for the U.S. and New Zealand — though other countries such as Canada allow some forms of it — it certainly hasn’t been embraced. But recent research by Ceren Kolsarici, a Queen’s School of Business assistant professor and Ian R. Friendly Fellow of Marketing, finds that the arm of DTCA only reaches so far. She says its criticisms — that it skews prescribing, encourages patients to be treated for under-diagnosed conditions, and ultimately drives up drug costs — are largely unfounded. 

In fact, the requirement that pharmaceutical firms disclose all drug risks might work against it, says Kolsarici, who laughs at the uber-happy ads that breathlessly list such worrisome side effects as kidney failure and cardiac arrest. 

“It’s not helping — it might be even hurting — after you hear about all those side effects and possible deaths,” she laughs. “Would you still stay equally eager to use that drug?”

Three Shades of DTCA

DTCA falls into three categories. The first are help-seeking advertisements, allowed in Canada, that provide information about a condition and encourage people to talk to their doctor about potential treatments. These ads promote the whole therapeutic category without the mention of a specific brand name. 

The second type of DTCA, also allowed in Canada, are reminder advertisements that disclose the brand of the drug and may give information about that strength, dose, and price of the medication but cannot reveal the therapeutic category or the indications.

And then there are the product-claim advertisements. Not allowed in Canada, though shown on American TV channels that Canadian viewers can easily access, these advertisements allow for the brand name and the indications of the drug to be shown, along with side effects and risks to taking the drug. 

In their recent book chapter, Kolsarici and colleague Demetrios Vakratsas of McGill University looked at the effectiveness of DTCA and direct-to-physician (DTP) marketing over a drug’s lifetime. Focusing on selective serotonin reuptake inhibitors, statins, and proton pump inhibitors, three of the largest drug classes, they looked at research on DTCA since 2007. What they found was that DTCA had the largest impact at the time of the launch of a new drug, but grew increasingly less effective as the drug became well known. 

“We show that as the brand gets older, as the consumer gets familiar with the brand and the therapeutic category, the DTCA starts not paying off,” says Kolsarici.

“It’s because the consumers, or the patients in this context, get overexposed to the branded messages and it starts losing per-message or per-dollar effectiveness, and they start turning away from the messages. It doesn’t pay off anymore.”

Kolsarici says that at the beginning of a drug’s lifecycle, DTCA actually serves to educate patients about the medication and the conditions it treats. 

Direct-to-Physician Marketing is the Sweet Spot

But overall, it’s the DTP marketing campaigns by pharmaceutical representatives that are the most effective — and influential — across a product’s lifecycle, and generate the most sales. 

“There are things we don’t even account for in the paper: big pharmaceutical companies have close ties with influential medical professionals or opinion leaders in the field, they take physicians out for dinners, they do a lot of entertaining… lots of things are going on, in addition to the drug detailing by sales representatives which constitutes the largest portion of the accounted DTP efforts in academic research,” says Kolsarici. 

She says critics’ views that DTCA leads patients to convince their doctors to prescribe advertised drugs is not strongly supported by research. “It is safe to say that the pharmaceutical marketing literature agree the fact that while DTCA has a small but significant market expansion effect, it is impact on brand choice is very limited. This makes us believe that, when it comes to prescription choice, the decision maker is definitely the physician, not the consumer.”

In Canada, in particular, says Kolsarici, many consumers have already seen ads for years on American TV stations before drugs are actually approved here. As a result, they are less swayed by the advertising, as the message has worn off. In addition, she says, the strict FDA regulations on DTCA further protects Canadian consumers to be negatively influenced by TV drug ad campaigns.

But she cautions that DTCA isn’t entirely blameless. There may be a lack of empirical evidence on the negative effects of DTCA but “there remain a number of legitimate concerns regarding the content and form of delivery to consumers,” the researchers point out in their paper. “Even proponents of deregulation admit that ads lack clarity especially regarding risk information.”

Kolsarici foresees pharmaceutical companies continuing with DTCA, though more strategically rather than broadly, as analytical tools become available that increasingly shed light in how best to reach consumers. “The more big companies use big data analytics, the more they will reduce DTCA spending." 

She says that in Canada, though DTCA is self-regulated, there is no need for alarm bells. “DTCA isn’t going anywhere, it’s here to stay,” says Kolsarici. “So let’s make our peace with it and look at it on the bright side. It educates the market and it doesn’t influence the [final prescribing] decision that much.”

Anna Sharratt

Smith School of Business
Goodes Hall, Queen's University
Kingston, Ontario
Canada K7L 3N6

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