Pharmaceutical Marketing Club of Quebec (PMCQ) Advertising Effectiveness with Reference to: Sales Activity Journals D-T-C Internet C. Marshall Paul PERQ/HCI Corp. April 17, 2001

Pharmaceutical Marketing Club of Quebec April 17, 2001 US Trends in ROI US Trends in Pharmaceutical Promotion MD - Detailing Consumer - TV US Trends in D-T-C US Trends in Internet Usage Conclusion Implications for the Future I. II.   III. IV. V. VI.

Promotion Effectiveness of Media Mix on Message Association (All MD's) No Promotion Print Only Detail Only Detail & Print Detail & Sales Aid Detail & S.A. & Print % Association Pt Chg in Shr Market Share st Choice Therapy Message Base

(from a study of 68 campaigns ,000 MDs) 72% of print promotion raises the ROI from detailing.  CTS-2000 ROI Analysis #% Print raised detailing's ROI4972% Print lowered detailing's ROI 1928% 68100% Campaigns Studied

PrintDetailingPrint + Detailing CTS-2000 ROI Analysis (N = 48 Campaigns) Effective Campaigns 38%

CTS-2000 ROI Analysis Analysis of Effective Campaigns by Product Characteristics Type of Campaigns # of Campaigns Tested Print$ Detailing $ Print + Detailing $ % Inc P+D / D Competitive Products Years on Market: 0 – 1 year – 4 years years Unique Products 0 – 1 year Source: CTS-2000,

"The number of pharmaceutical representatives has ALMOST DOUBLED since 1993"* "The number of sales calls has remained almost flat (38 million [1993] to 42 million [1997])* "43% of representative visits ended at the receptionist's window"** "87% of sales calls to HVP's are <2 minutes"    Detailing is Becoming Less Efficient 

*Scott-Levin ( MM&M Media FAX, December 17, 1999, pg 3) **Health Strategies ( MM&M Media FAX, Volume 8, Number 1, pgs 2,3) ***PERQ/HCI **** : Medical Advertising News : Pharmaceutical Executive (April) 1999 Note: Sales force size generally includes only 50 pharmaceutical companies. Some suggest the figure for the year 2,000 is close to 70,000 reps "The ROI from detailing has dropped significantly as the sales forces have increased"***  (cont'd) Years # of Tests Avg*** Detailing ROI Avg # of Reps**** / , / ,600 Detailing is Becoming Less Efficient

Not All D-T-C Promotion is Efficient Most researchers agree that in general less than half of TV provides a positive ROI. PERQ/HCI research confirms that in many cases TV is not as strong at communicating a message as print. In addition, print usually provides a greater ROI than TV. Response to DTC promotion varies greatly depending on a product's rank in market share.   

Media Mix Message Association *Fourteen campaigns (allergy market) studied used both magazine and TV promotion 4% 12% 9% 22% No Promotion MagazineTVMag + TV. 0% 5% 10% 15% 20% 25% % Correct Msg Assoc. Consumer-CTS (14 campaigns*)

Media Mix ROI With and Without Market Leader Source: PERQ/HCI Consumer-CTS. Norms based on 14 campaigns that contained both TV and magazine advertising in the allergy market. $7.84 $5.49 $5.68 $4.64 $1.73 $2.50 MagazineTVMag + TV $0.00 $5.00 $10.00 All Prodsw/o Mkt Leader Consumer-CTS ww/o w w

$ In Millions DTC LNA/MEDIA WATCH Multi-Media Service Direct-to-Consumer Ad Expenditures: Rx Brands (Gross $) Note: PERQ/HCI Class Summary & All Journal Ad Expenditures CMR LNAClass 560 Est. 0

OtherMagazineTVTotal Total DTC Healthcare %31%63%100% DTC Promotion Expenditures* October September 2000 *Source: CMR

IV. US Trends in Internet Usage

Internet Usage Study -- 12/00 Objectives Trend computer/Internet usage patterns over the years Identify the most frequently visited sites Profile users to evaluate how representative they are of the physician universe   

Internet Usage Study -- 12/00 Details Sample: 7,000 physicians in 23 specialties Only doctors in active practice Timing:Updated semi-annually Latest edition December '00

Avg. Specialty Range Computer users90%75% - 97% Access the Internet86%63% - 95% Internet Usage Study -- 12/00 Table 1 Computer Use/Access Internet % Universe -- All Specialties

Avg. Specialty Range Consumer Online Service74%57% - 85% Online Service Designed for Physicians 28%12% - 41% Internet Usage Study -- 12/00 Table 2 Method of Internet Access % Universe -- All Specialties

Avg. Specialty Range Personal/Entertainment ONLY 12%2% - 21% Professional ONLY3%1% - 8% Pers/Ent & Prof71%43% - 90% Professional Use74%45% - 93% Internet Usage Study -- 12/00 Table 3 Uses of Internet % Universe -- All Specialties

Avg. Specialty Range Access Medical Sites70%41% - 93% 43%23% - 67% Conferencing/Chatting5%1% - 9% Internet Usage Study -- 12/00 Table 4 Professional Uses of Internet % Universe -- All Specialties

Avg. Specialty Range Medical Library Sites (Medline, etc.) 52%23% - 81% Online Services Designed for Physicians 33%20% - 45% Medical Association Sites32%12% - 48% Medical Publisher/ Journal Sites 29%11%-50% Internet Usage Study -- 12/00 Table 5 Types of Medically Related Sites Accessed % Universe -- All Specialties

Avg. Specialty Range Government Sites (CDC, NIH, etc.) 28%14%-70% University/Medical School Sites 26%14% - 51% Drug Specific Sites14%4% - 26% Pharmaceutical Mfr Sites8%2% - 13% Internet Usage Study -- 12/00 Table 5 (cont'd) Types of Medically Related Sites Accessed % Universe -- All Specialties

Conclusion Both political and economic forces will push the industry to become more efficient in its marketing practices Both political and economic forces will push the industry to become more efficient in its marketing practices

VI. Implications for the Future

Implications If a universally known, well-respected Internet site emerges, the Internet could become the centerpiece of the industry’s communication efforts to physicians and consumers If a universally known, well-respected Internet site emerges, the Internet could become the centerpiece of the industry’s communication efforts to physicians and consumers In this scenario, promotion, both on the Internet and ancillary (detailing, TV, direct mail, journals, magazines, etc.) would be used to reinforce the educational messages contained on the Internet. In this scenario, promotion, both on the Internet and ancillary (detailing, TV, direct mail, journals, magazines, etc.) would be used to reinforce the educational messages contained on the Internet. This would represent a dramatic change in how pharmaceuticals are marketed! This would represent a dramatic change in how pharmaceuticals are marketed!