In 2014, pharma giant Pfizer (NYSE:PFE) spent more than $1 billion on ads in an effort to raise consumer awareness for its drugs. That fact raises an interesting moral question: Should this type of marketing be allowed?
In this clip from The Motley Fool's Industry Focus: Healthcare, contributor Brian Feroldi joins analyst Kristine Harjes to discuss the pros and cons of allowing big pharma companies to market their products directly to consumers.
A transcript follows the video.
This podcast was recorded on Jul. 13, 2016.
Kristine Harjes: Another element to this story about how healthcare companies market their drugs, aside from just having representatives that talk to healthcare providers and doctors, you also have direct-to-consumer advertising. This is something that's pretty unique to the U.S. America is the only major market to allow direct-to-consumer -- DTC -- ads of prescription drugs. One of the companies that is really huge in this is Pfizer, which in 2014, was the first pharma to break $1 billion in annual DTC ad spend. The runners up, by the way, were about a third of that spend. They are the Goliath of the TV commercial area. This is another interesting moral question -- should these companies be allowed to put a commercial on TV for a drug?
Brian Feroldi: You see both sides of it. On the one hand, raising awareness for a disease state or drug, that could be a good thing. If a patient sees a commercial and says: "Hey, I might have that," and they go talk to their doctor and they can get help, you could argue that's a good thing. But on the flip side, it does hold potential to create artificial demand for a drug, where you could imagine a patient walking into a doctor's office and saying, "Hey, I saw this on TV and I want it." The doctor might not even think they're a good candidate for it, but they could feel some pressure to prescribe it just to make the patient happy.