Nielsen Healthcare DTC Learnings & Benchmarks in Pharma

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Copyright©2015TheNielsenCompany.Confidentialandproprietary.
March, 2017
DTC LEARNINGS AND BENCHMARKS IN
PHARMA

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DTC IN PHARMA
Following the FDA’s DRAFT Guidance for Industry on Consumer-Directed Broadcast
Advertisements release in 1997, the Pharmaceutical Industry has made significant investments in
Direct to Consumer advertising each year
1.20
1.60
2.50
2.70 2.60
3.10
4.40
4.60
5.40 5.33
4.43 4.51
4.02 3.98
3.45
3.80
4.53
5.40
0.00
1.00
2.00
3.00
4.00
5.00
6.00
Rx DTC Ad Spend*
Spend($Billions)
*Source: IMS

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DRUG APPROVALS: SPECIALTY VS. TRADITIONAL
2015 marked the highest overall number of drug approvals since 1996, with Specialty accounting
for the majority of FDA approvals over the last 6 years
22 22
18
23 24
12
17
21
9
24 23
6 7
8
8
10
14
18
22
19
27
33
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
FDA Drug Approvals in the U.S.
Traditional Specialty
Source: FDA.gov and ExpressScripts

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TRENDS IN PHARMA DTC ADVERTISING
Nielsen has evaluated of 800 pharmaceutical DTC concepts using our BASES DTC forecast model
and shows a similar trend in the increase of specialty products for evaluation over the last 5 years
82
98 98 100 100
93
100
50
100 100
84
50
18
2 2
7
0
50
16
50
0
20
40
60
80
100
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
BASES DTC Rx Product Forecasts
Traditional Specialty
Percent(%)ofConceptsTested

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WHY USE DTC? WHAT IS SUCCESS?
The key metric for DTC is generally ROI. That is, if I spend $20MM, can I make that
back?
Success, however, is not so easy to define and varies by company.
• Anything above break-even?
• 1-1.5 return?
• Gross vs. Net?
• “Keep up with competitors”?
DTC very rarely “saves your brand”, but can add an important lift as well as keep you
relevant in a competitive category.
One thing that is certain is that although the target audience is much smaller (i.e.
sufferers of a given condition), the price per Rx to the manufacturer is usually quite high
($100+), even higher for specialty products.

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BEYOND ROI AND REVENUE
In general, incremental volume from DTC is a small part of the overall franchise,
ranging between 5-20% with most brands closer to ~10%
• Outliers can see as little as 3% to as much as 50%
• 30-50% contribution is rarely achieved and comes from categories where
patients would not really be treated unless otherwise asking their physician
(i.e. erectile dysfunction)
• A recent Nielsen BASES DTC validation in an auto-immune category saw a 10-
15% lift 12 months post DTC launch

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Maximum: $3.39
Minimum: $0.02
*from analysis of 48 live campaigns from 2001 to 2008
$1.00 is
break even
Observed ROI’s from Nielsen Retrospective Analysis*
ROI NORMS IN PHARMA
In Nielsen’s experience DTC campaigns with ROI’s over 2:1 generally fall within the most
successful 20% of DTC campaigns. The median return is 1:1, so a return greater than 1:1 for a
campaign is good, relatively speaking.

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DTC PHARMA ADVERTISING: IMPORTANT CONSIDERATIONS
Population: The bigger the population, the more likely it is for broad scale advertising to pay out.
Consumer influence: When consumers have more say in their treatments or are more motivated to seek
treatment for their symptoms, DTC is more effective.
Frequency of doctor visits: If a patient goes to the doctor often for their condition, that increases the
opportunities for her to talk about medication options.
Persistency and annuity: Once you get a patient in the door, that patient is worth more if they are likely to
continue on the medication at a regular pace versus a ‘one and done’ medication.
Price: Out of pocket costs matter to the patient, while a high WAC could off-set other limiting factors (like a
lower population).
Uniqueness: Fulfilling an unmet need tends to motivate consumers more than a ‘me-too’ product.
Competitive environment: Harder to stand out in a crowded marketplace, but also risk being excluded
from the conversation

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READY TO FIND OUT IF DTC
ADVERTISING IS RIGHT FOR
YOUR BRAND?
Our validated BASES DTC forecasting can
provide the answers you are looking for
Contact Tom Richards, VP Marketing &
Strategy for Nielsen Healthcare to learn
more at tom.richards@nielsen.com

Nielsen Healthcare DTC Learnings & Benchmarks in Pharma

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