1. 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

2. 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.

4. Promotion Effectiveness of Media Mix on Message Association (All MD's) 5 34 16 49 45 57 No Promotion Print Only Detail Only Detail & Print Detail & Sales Aid Detail & S.A. & Print 0 10 20 30 40 50 60 70 80 90 100 % Association Pt Chg in Shr0.50.7-0.11.7-0.12.3 Market Share1.13.65.98.45.39 1st Choice Therapy33813 17 Message Base199375112136401023

5. (from a study of 68 campaigns 1995-1999 136,000 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

6. 2.29 1.88 2.59 PrintDetailingPrint + Detailing 0 1 2 3 4 CTS-2000 ROI Analysis (N = 48 Campaigns) Effective Campaigns 38%

7. 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 140.250.761.0234 1 – 4 years 192.431.992.6332 4+ years 94.453.094.5246 Unique Products 0 – 1 year 63.342.464.0062 48 Source: CTS-2000, 1995-98

10. "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 

11. *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 ****1994-97: Medical Advertising News 1998-99: 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**** 1994-96403.34 / 1.0044,500 1997-99351.94 / 1.0057,600 Detailing is Becoming Less Efficient

12. 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.   

13. 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*)

14. 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

16. 43.5 51.7 157.1 163.3 240.7 363.8 595.5 843.8 1173.4 1590.2 2200 909192939495969798990 0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 $ 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

17. OtherMagazineTVTotal Total DTC Healthcare 13119770211313939222227230 6%31%63%100% DTC Promotion Expenditures* October 1999 - September 2000 *Source: CMR

18. IV. US Trends in Internet Usage

19. 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   

20. 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

21. 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

22. 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

23. 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

24. Avg. Specialty Range Access Medical Sites70%41% - 93% E-Mail43%23% - 67% Conferencing/Chatting5%1% - 9% Internet Usage Study -- 12/00 Table 4 Professional Uses of Internet % Universe -- All Specialties

25. 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

26. 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

28. 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

29. VI. Implications for the Future

30. 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!