End of Drug Era Transforming Healthcare Marketing
Blockbuster drugs refer to big-name pharmaceuticals that earn more than $1 billion in annual revenue. These drugs represent the most popular and well-known in the industry. Back in 2010, roughly 130 different brands — including Lipitor, Viagra and Zoloft, among others — accounted for a whopping 34 percent of the global pharma industry’s total sales. But in recent years, many blockbuster drugs lost their patents. These expired patents — along with the subsequent rise of more affordable generic and niche brands — have basically led to the end of the blockbuster drug era as we know it.
For pharma and healthcare companies, this has had a profound impact on the way products are advertised to customers. Here’s how.
From Push to Pull
During the blockbuster drug era, pharmaceutical companies targeted a large group of people with the same general health issue — like heart disease or high blood pressure. It was the very definition of “push” marketing. However, with that era now over, marketers have had to switch their focus to developing and marketing new drugs for smaller segments, instead. To promote these new “niche” and condition-specific medications, brands must now leverage more “pull” marketing tactics that are targeted and individually tailored. And this is a good thing as expectations for ad experiences have evolved in the online era. According to a study by Google, McKinsey & Co and the Wharton School of Pennsylvania, for instance, 59 percent expect the same one-to-one experience from health providers that they get from a business like Amazon.
As the blockbuster drug era fades, the pharma marketing industry is becoming more nuanced, personalized and targeted, as a result.
Digital Over TV
Linear TV has always been the go-to mass-marketing channel. And pharma marketers, especially, have found it appealing. Since 2012, there has been a 62 percent increase in TV ad spend in the pharmaceutical industry. But, with the blockbuster drug era effectively over, TV, as a platform, simply doesn’t offer the level of personalization required for more niche medications.
And while print media can be more targeted than TV, it’s similarly challenging to get personal at a granular, scalable level. Enter online and digital. While pharma marketing spend on digital has generally been low, there’s now a rising investment in this area, as it’s now possible to deliver more highly-targeted ads through digital channels. By the end of 2017, it’s projected that pharma marketers will spend more than $2.2 billion on digital advertising, up from 1.4 billion in 2014. It will be a new high, and it’s easy to see why. Digital is a better venue than TV for marketing drugs to smaller segments because it offers much more touchpoint data to advertisers, and ultimately more personalization.
Niche Publishers Dominating
As brand campaigns for condition-specific drugs become more prevalent — now that the blockbuster drug era has ended and spend has begun shifting toward online — the types of media inventory being purchased are also changing. Pharmaceutical and medical brands are moving away from mass-market websites like The New York Times and even catch-all health publisher WebMD. These sites are often the equivalent to TV, but online. Instead, they’re seeking out inventory and publishers who are focused on specific, hyper-focused audiences. Remember — online data usage in the pharmaceutical industry is somewhat limited by federal privacy regulations, meaning that digital targeting can only go so far. So, starting with the right audience is increasingly the key to success, as it ensures buy-in with the most relevant consumers, right off the bat. This is why mass publishers like Conde Nast are trying to offer more condition-specific media inventory to marketers (whether a mass publisher like that can succeed in this area is yet to be determined). There is an appetite for this type of inventory.
The demise of blockbuster drugs has forced healthcare and pharmaceutical marketers to rethink the way they reach consumers. Personalization, the continued rise of digital and niche publishers are just some of the areas they’ll want to focus on if they want to stay afloat in the post-blockbuster drug era. And, fortunately, all of these changes are positive, not just for marketers, but for consumers and patients, most critically.
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