Exhibit 1.20: Trends in Promotional Spending for Prescription Drugs, 1996-2004
Promotional spending by pharmaceutical companies involves a variety of activities whose relative contributions to total promotional costs have shifted somewhat over time. Consumers are most aware of direct-to-consumer (DTC) advertising (advertising directly to consumers through television, radio, and popular periodicals and newspapers). Most promotional spending (86%) in 2004, however, was devoted to promoting drugs directly to physicians through sampling (57%), detailing (26%), and professional journals (2%), with the remaining 14% directed at consumers. DTC advertising experienced the highest average annual increase (22%) from 1996 to 2004, compared to 15% for the retail value of sampling, 12% for detailing, and 1% in professional journal advertising.
Notes: Numbers may not total due to rounding. Sampling is the value of samples left at sales visits to office-based physicians. The samples are valued at the prices at which they would be sold in retail pharmacies. Detailing is expenses for the sales activities of pharmaceutical company representatives directed to office-based and hospital-based physicians and hospital directors of pharmacies; approximately 85% of detailing is for office-based sales visits. Direct-to-Consumer Advertising is expenses for advertising to consumers through television, magazines and newspapers, radio, and outdoors. Professional Journal Advertising is expenses for advertising appearing in medical journals.
Source: IMS Health website at http://www.imshealth.com (About Us, Press Room, Top-Line Industry Data, 2004, U.S.).
