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When it comes to American exceptionalism, it is difficult to beat TV ads for prescription drugs. US viewers have been hit by complaints from manufacturers of drugs that treat everything from arthritis to psoriasis, and have recently been struck by weight loss. The commercial inevitably features scenes in which the narrator rattles off the list of side effects, living the lives of people who smile in full, is ubiquitous and troublesome. Outside the US, only New Zealand allows such things.
There may be changes. The White House is reportedly considering measures to limit the ability of pharmaceutical companies to carry out so-called consumer advertising. The senator this month introduced a bill that completely bans practices, claiming that if drug ads become available for equally effective, inexpensive generics, it would cut medical costs by steering patients towards more expensive drugs.
See how much they use for tips on how many drugmakers can lose from this move. The pharmaceutical industry expanded over $5 billion in television ads nationwide last year, according to advertising measuring company ISPOT. The biggest spender, Abbvie, has baffled $635 million with traditional TV ads to promote Skyrizi and Rinvoq. The US sales of two blockbuster autoimmune drugs generated about a quarter of the company’s revenue last year. Eli Lilly is another major advertising buyer. Last year, I spent over $5 billion on TV ads for diabetes and weight loss treatments.
These companies have two risks. One is for patients and doctors to choose alternative medications. However, there are ways to alleviate this, such as marketing it to the doctors themselves. The bigger concern is that patients who are not troubled by drug ads that promise a happier and healthier life may not accept complaints from their doctors in the first place. Again, there is a “Illness Awareness” campaign. In this campaign, drugmakers will guide their audiences to treatment without naming their products. Or, if there was no blanket ban, they could take drug ads to other channels, such as social media.
For television network operators, the prognosis looks unhappy. The revenue generated from prescription drug commercials is one of the few bright spots in the otherwise soft advertising market. Drug advertising spending is rising despite declining viewers and advertising revenues for non-streaming television. According to ISPOT, the pharma industry currently accounts for more than 13% of national TV advertising spending.
The Big Four networks of NBC, ABC, CBS and Fox combined nearly $2.7 billion in drug advertising revenue last year. That may not be much compared to the $258 billion generated by each parent company of the network. But traditional television has lost its sheen for years. Prohibiting drug ads leaves these operators with unpleasant cases of cold turkeys.
pan.yuk@ft.com
