{"id":6159,"date":"2013-08-13T13:37:00","date_gmt":"2013-08-13T13:37:00","guid":{"rendered":"http:\/\/www.pharma-mkting.com\/can-5-million-per-quarter-dtc-ad\/"},"modified":"2019-02-21T01:17:18","modified_gmt":"2019-02-21T01:17:18","slug":"can-5-million-per-quarter-dtc-ad","status":"publish","type":"post","link":"http:\/\/ec2-54-175-84-28.compute-1.amazonaws.com\/pharma-mkting.com\/blog\/can-5-million-per-quarter-dtc-ad\/","title":{"rendered":"Can a $5 Million per Quarter DTC Ad Campaign Turn Around an 8% to 17% Drop in Provenge Sales?"},"content":{"rendered":"

File this under “When pigs with wings fly.” Let’s do the math.<\/p>\n

It has been reported (here<\/a>) that Dendreon’s Provenge sales were off 8% in the second quarter year-over-year and 17% in the first quarter. Let’s say the 2013 sales will, on average, be 12% less than the 2012 sales. Last year Provenge sales totaled $321.5 million. Twelve percent of that is about $39 million. <\/p>\n

According to a MM&M article (here<\/a>), Dendreon CEO John Johnson remains “optimistic, because of 42 new accounts added in the quarter and because of increased consumer interest since initiation of a television DTC [direct-to-consumer] campaign March 7 for prostate cancer drug Provenge.” This campaign is a $5 million-per-quarter “targeted” DTC advertising campaign.<\/p>\n

If we assume sales lag DTC ad views — consumers need to see the Provenge ad about seven times before they are ready to dial in to the call center — then maybe only 2 quarters or $10 million worth of DTC are allocated to make up a $39 shortfall. Which means that these ads (see below) need to realize a return on investment (ROI) of $8 for every $1 spent on advertising. That is where the flying pigs come into the picture.<\/p>\n

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The ROI for DTC advertising is in the range of $1.60 to $2.00 per every dollar invested and some estimates are as high as $4.00 per dollar invested. The best performing brand in an IMS study yielded an ROI of $6.50 per dollar invested (see “Pharma Marketing ROI: The Emperor Has No Clothes!<\/a>“).<\/p>\n

View the Provenge TV ad here<\/a> (embedded below) and tell me if it is likely to yield $8 in sales for every $1 spent on the ad. Keep in mind that Dendreon is charging over $90,000 per year per patient for Provenge, so only 54 new patients per quarter are needed to cover the cost of $5 million in DTC advertising. Johnson claims 42 “new accounts” were added in the last quarter, which falls short of the break-even point. <\/p>\n

It appears that investors can do the math too:<\/p>\n

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