• by John Gaffney , April 9, 2003

The pharmaceutical advertising boom is no fad, according to a newly released report that claims business fundamentals will keep the category spinning north of $3 billion into the marketplace on an annual basis.

"The growth in mass media drug ads has coincided with a rapid rise in spending on prescription drugs in the US," said The Cutting Edge Information senior analyst Eric Bolesh. "This industry is in blockbuster mode. What you see right now is spending on ads to maintain that blockbuster mode and even to repay for the ads that didn't become blockbusters."

Ads like Viagra, Zoloft, Vioxx and Nexium are just some of the blockbuster drugs that have made millions for the pharmaceutical labs they come from. But according to industry sources for every Nexium that finds its way into regular prescription usage, there may be as many as 10,000 experimental drugs that got crunched on the lab floor. So industry has recognized heavy ad spending as a guarantee of consumer awareness and an essential part of its model.

According to The Cutting Edge report "Blockbuster Pharmaceutical Launches," the strategy to produce profitable products is critical to the lifeblood of huge companies like Merck, J&J, and Pfizer. During 2001 for example, Merck spent $2.4 billion to develop 14 products. Two were approved. They produced $47 billion in sales.

"In terms of actual percentage growth I think you may actually see pharmaceuticals slow down a bit," said Bolesh, "but that's only because its growth has been so fast. You will definitely see something in the $3 billion range over the next few years."

More advertising will come if the pharmaceutical business expands into "designer drugs," Bolesh said. This is the term for the move into medicines designed closely for a person's blood or chemical makeup, and eventually for their specific gene structure.

"Imagine the one-to-one marketing practices that will result from that," Bolesh said.