The way to your wallet just might be through your doctor's eyes.
Pharmaceutical firms spend a lot of money to influence physicians to prescribe their products. When doctors opt to prescribe those products, the cost is ultimately paid by your insurer -- and you.
Drugmakers reach out to clinical professionals in a multitude of ways, including advertising in print media frequently read by physicians. Kantar Media recently released a report about pharmaceutical spending on print advertising in professional health journals for the first half of 2013. Here are the five pharmas spending the most to catch your doctor's eye, according to Kantar's findings.
1. Johnson & Johnson (NYSE:JNJ)
Johnson & Johnson spent $20 million on print advertising from January to June of this year. That's up 67% from the same period last year. The increase in spending moved J&J up from the No. 2 spot in 2012 to the top position.
While J&J claims plenty of drugs in its portfolio, three of them stand out in terms of professional journal advertising. Blood thinner Xarelto, diabetes medication Invokana, and prostate cancer drug Zytiga all ranked in the top five for the first half of the year.
2. Forest Laboratories (NYSE:FRX)
Forest Laboratories finished in second place for professional journal ad spending during the first half of the year. Kantar reported that the company shelled out $9 million -- a 63% drop year-over-year.
The company's biggest revenue generators are dementia drug Namenda and high blood pressure medication Bystolic. However, Forest is spending more money advertising in professional journals for Tudorza Pressair, which treats chronic obstructive pulmonary disease, or COPD. The drug accounted for $5 million of the $9 million spent in the first half of 2013.
3. Pfizer (NYSE:PFE)
Pfizer spent the third-highest amount on professional journal advertising during the first two quarters. The big pharmaceutical company's ad buys totaled $8 million, according to Kantar, 4% higher than the same period in 2012.
Diversification seems to be more important to Pfizer's strategy that it is for J&J or Forest. While Pfizer ranks No. 3 in terms of total spending in professional journals, the company has no drugs among Kantar's top five in advertising spending.
4. Novartis (NYSE:NVS)
Novartis came in fourth on Kantar's ranking with $6 million worth of professional journal advertising spending during the first six months of 2013. The Swiss drugmaker forked out 7% less than it did during the first half of 2012.
Like Pfizer, Novartis didn't land any of its products in the top five list of individual drugs for which professional advertisements were placed. It could be that the company is spreading more of its marketing dollars across several fast-growing products in its portfolio, such as Afinitor, Gilenya, Lucentis, and Tasigna.
5. Ironwood Pharmaceuticals (NASDAQ:IRWD) and Forest Pharmaceuticals
Kantar reported the partnership between Ironwood Pharmaceuticals and Forest Pharmaceuticals, which is a subsidiary of Forest Laboratories, as its fifth-biggest spender for professional journal advertising. The partners spent $5 million in the the first half of 2013.
All of those dollars appear to have gone to marketing irritable bowel syndrome drug Linzess. The drug was approved by the Food and Drug Administration in August 2012 and became commercially available in the following December.
Drop in the bucket
One thing sticks out with the advertising dollar amounts reported by Kantar: They're a drop in the bucket for these pharmaceutical companies. Johnson & Johnson, for example, spent nearly $250 million in total print advertising back in 2011.
Even more advertising money is being spent appealing to consumers. Nielsen found that the top 10 pharmaceutical companies spent $2.7 billion last year on direct-to-consumer marketing. Does that blow the theory that the way to those prescription drug wallets is through the doctors? Not at all.
Pharmaceutical companies aren't banking on doctors prescribing their drugs just because they see an ad in a professional journal. Enormous sums are allocated to directly calling on physicians. If you have ever seen a person bringing in a basket full of snacks for the staff at your doctor's office, that's direct-to-doctor spending at work. Research firm Cegedim estimated that total spending on promoting drugs amounted to nearly $28 billion in 2010. The majority of that amount isn't related to advertising.
Companies that spend the most on marketing don't always have the best market returns. While J&J and Forest Labs have beaten the S&P 500 in year-to-date returns, Pfizer and Ironwood trail the index.
If you're an investor, though, you want the companies in which you own shares to be doing everything they can to cost-effectively promote their products. So if you're investing in drugmakers, the best way to fatten your own wallet just might be tied to how well those pharmaceutical firms get the attention of doctors.
Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.