Watch television or read a magazine and you're bound to see direct-to-consumer advertisements for prescription drugs. Some are more memorable than others, but their purpose is clear: get you to the doctor to ask for the specific drug.
Direct-to-consumer ads for drugs that treat common illness are pretty widespread. It's not hard to see how ads for erectile dysfunction drugs such as Pfizer's Viagra with its "little blue pill" slogan or the couple sitting in separate bathtubs in commercials for Eli Lilly's Cialis could produce pretty good returns on investments.
But cancer? You don't see too many advertisements for cancer drugs directed at consumers. Doctors tend to make the decisions on which drug to prescribe, so drugmakers tend to focus on them.
Yet two companies recently announced that they're going to start direct-to-consumer advertisement campaigns. Dendreon (NASDAQ: DNDN) plans to start running television commercials for its prostate cancer treatment, Provenge, in the second quarter, and Spectrum Pharmaceuticals (SPPI) said it plans to increase its message to consumers, encouraging them to ask for its lymphoma drug Zevalin.
Both Provenge and Zevalin have underperformed their potential in large part because they offer a different paradigm in drug delivery. Doctors tend to be a little slow to change, especially if it isn't in their financial interest -- cynical, but true.
Provenge is an immunotherapy that has to be infused a couple of times over a month. Doctors have had to foot the bill for the treatment until they can be reimbursed by Medicare or insurers. Zevalin administration has to be overseen by a nuclear medicine specialist because it's radioactive. Doctors aren't particularly fond of either scenario.
If done right, the advertisements will likely increase the number of patients asking their doctors about Provenge and Zevalin, but I don't know if that'll translate into doctors wanting to prescribe them more. If Dendreon and Spectrum haven't been able to convince doctors to prescribe their drugs while pleading to them directly, I'm not sure patients will change their minds. And most patients are likely to defer to their doctor's decision, especially for something like cancer where the patient's life is on the line.
We'll know soon enough whether the advertisements are worth the investment. Dendreon said its campaign will cost about $5 million per quarter, so it needs to increase sales by $10 million -- assuming a 50% profit margin -- to justify the campaign.
