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Nielsen Healthcare DTC Learnings & Benchmarks in Pharma

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Insights into DTC advertising in Pharma from Nielsen Healthcare's BASES DTC forecasting databases and insights

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Nielsen Healthcare DTC Learnings & Benchmarks in Pharma

  1. 1. 1 Copyright©2015TheNielsenCompany.Confidentialandproprietary. March, 2017 DTC LEARNINGS AND BENCHMARKS IN PHARMA
  2. 2. 2 Copyright©2015TheNielsenCompany.Confidentialandproprietary. DTC IN PHARMA Following the FDA’s DRAFT Guidance for Industry on Consumer-Directed Broadcast Advertisements release in 1997, the Pharmaceutical Industry has made significant investments in Direct to Consumer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
  3. 3. 3 Copyright©2015TheNielsenCompany.Confidentialandproprietary. 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
  4. 4. 4 Copyright©2015TheNielsenCompany.Confidentialandproprietary. 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
  5. 5. 5 Copyright©2015TheNielsenCompany.Confidentialandproprietary. 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.
  6. 6. 6 Copyright©2015TheNielsenCompany.Confidentialandproprietary. 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
  7. 7. 7 Copyright©2015TheNielsenCompany.Confidentialandproprietary. 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.
  8. 8. 8 Copyright©2015TheNielsenCompany.Confidentialandproprietary. 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
  9. 9. 9 Copyright©2015TheNielsenCompany.Confidentialandproprietary. 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

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