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Trends in promotion

Analysing how and where marketing budgets are being spent in Europe and beyond

TrendEuropean pharmaceutical promotion spend increased by 0.5 per cent in the top five developed markets of France, Germany, Italy, Spain and the UK and 2.2 per cent in the rest of Europe in the 12 months up to and including September 2010. North American promotion expenditure declined, down by 10.3 per cent, while in the rest of the world expenditure expanded by 5.6 per cent.

In the top five European countries, pharmaceutical companies increased their promotional expenditure by 0.5 per cent to $18.5bn in the seven channels that Cegedim Strategic Data (CSD) monitors.

This continues the recent small 2-3 per cent annual increase in promotional expenditure in these markets over the last few years, namely 2.4 per cent in 2009/8 and 3.3 per cent in 2008/7.

Detailing to healthcare professionals is the industry's main channel for communicating promotional and clinical messages, at 60 per cent of total promotional expenditure in the developed top five European markets. Total detailing spend in these five markets continues to decrease slowly, down 2.5 per cent to $11.3bn.

Detailing spend specifically on primary care physicians in these five major European markets fell by 4.9 per cent Moving Annual Total (MAT) September 2010 with significant decreases of nearly 10 per cent in France and Spain. 

This decrease in primary care detailing spend reflects the continued trend of pharmaceutical companies moving from large primary care sales teams to smaller specialist teams and account managers and the reduced influence of doctors in prescribing and the rise in importance of the payer.

With the announcement about the future changes in the UK National Health Service and the forthcoming GP commissioning consortia in England it will be interesting to see how this impacts future primary care detailing trends there.

In the major five European markets, DTC promotional spend increased MAT September 2010 by 13.9 per cent to nearly $4.0bn following 19.8 per cent growth over the last calendar year 2009 v 2008. 

Nearly 10 per cent of total promotional spend in the top five Europe was on meetings. For the 12 months up to September 2010 the pharma industry spent 5.7 per cent less on meetings in the five major markets, with large reductions in Germany and Italy.

The smaller channels of mailings, advertising and samples which form about 6 per cent of total promotional spend, all showed single digit decreases. 

Mailings spend in the top five Europe decreased by 2.2 per cent in the main European markets following on from a 16.1 per cent increase in 2009/8.

Pharmaceutical promotional spend increased by 2.2 per cent in the other 16 European markets that CSD monitors, which includes the emerging Turkey market. 

Similar to the top five Europe, spend on GP detailing decreased. In 10 of these 16 European markets, GP detailing expenditure decreased with double digit declines in most of the Nordic countries and Turkey.

Specialist detailing increased substantially by 19 per cent in the rest of Europe, particularly in Belgium and Turkey.

Meeting expenditure
While meeting expenditure decreased in the top five Europe, in the rest of Europe, 22 per cent more was spent on meetings. Pharmaceutical companies are now committing a similar proportion of their promotion spend to meetings in the rest of Europe to the share that they spend in the major five European countries. 

The switch of expenditure from GP detailing towards meetings may reflect that pharmaceutical companies are using meetings as an alternative way to contact physicians, particularly if representative access to physicians is becoming more difficult.

In the other major developed markets of North America promotional expenditure has been decreasing over the last two to three years but in the most recent 12-month period reviewed there has been a significant dramatic cut as pharmaceutical companies switch their focus to other parts of the world where they are 'seeing' and anticipating pharmaceutical market growth. 

North American pharmaceutical promotional expenditure fell by 10.3 per cent to $29.4bn for the MAT September 2010 following decreases of 1.7 per cent in 2009/8 and 6.4 per cent in 2008/7.

Expenditure on detailing in the North American market decreased by 7.8 per cent and declined for both primary care and secondary care. The overall long-term trend in the reduction of detailing is likely to continue as several pharmaceutical companies made quarter three 2010 announcements about reductions in their primary care sales forces in the developed markets. 

DTC spending in North America continued to decline 12.1 per cent MAT September 2010 following a 2.9 per cent reduction 2009 v 2008, a contrast to the expansion trend in the major five European markets. 

Mailings spend expanded by 37.9 per cent in North America, representing an opposite trend to that seen in the top five Europe. 

In the other markets in the world that CSD monitors, which include the developing markets of Brazil, India, China and South Korea, pharmaceutical promotion expenditure increased by 5.6 per cent. 

In the Latin America and Asia Pacific developing markets detailing to primary care physicians is still expanding as most medicines are paid by patients 'out of pocket' rather than by a payer. Here, the detailing spend to both primary care physicians and secondary care increased by nearly 10 per cent in the 12 months to September 2010.

Overall pharmaceutical promotional spend in the top five Europe markets is likely to increase by a small percentage or stay flat, with expenditure on primary care detailing continuing to decline. 

In the rest of Europe the major trends will probably continue, following a pattern of decreased expenditure on primary care detailing but considerable expansion in secondary care detailing and meetings spend.

1. Total promotion spend by geography 

Geographic area

Total Promotion Spend $

 

MAT Q3 2010

Growth

$ Billion

 

Top Five Europe

18.5

0.5%

Rest of Europe

3.9

2.2%

N America

29.4

-10.3%

Latin America, Asia Pacific

34.2

5.6%

Total

86

-1.6%



2. Top five European markets total promotion spend by channel
 

Top Five Europe

Total Promotion Spend


 

MAT Q3 2010

Growth

% Share total

$ Billion

 

 

Clinical trials

0.18

0.5%

1.0%

DTC

3.97

13.9%

21.4%

Mailing

0.14

-2.2%

0.7%

Meetings

1.67

-5.7%

9.0%

Advertising

0.36

-8.4%

2.0%

Samples

0.66

-1.1%

3.6%

Detailing

11.27

-2.5%

60.7%

Other

0.3

12.5%

1.6%

Total Top 5 Europe

18.55

0.5%

100%



3. Rest of Europe total promotion spend by channel
 

Rest of Europe

Total Promotion Spend


MAT Q3 2010

Growth

% Share total

$ Billion

 

 

Clinical trials

0.04

-20.2%

1.0%

Mailing

0.03

14.3%

0.9%

Meetings

0.39

22.2%

10.0%

Advertising

0.13

-6.2%

3.4%

Samples

0.19

3.3%

5.0%

Detailing

3.1

0.7%

79.7%

Total Rest of Europe

3.88

2.2%

100%



4. Detailing spend growth – primary and secondary care
 


Detailing spend MAT Sept 2010


Primary Care % Growth

Secondary Care % Growth

Top Five Europe

-4.9%

0.0%

Rest of Europe

-8.2%

19.0%

North America

-4.7%

-9.4%

Latin America, Asia Pacific

7.7%

8.5%

           Source for all tables: CSD Promotion Database, MAT Q3 2010 

 

The Author
Richard Derrick is key account manager, Cegedim Strategic Data
To comment on this article, email pme@pmlive.com

9th May 2011

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