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Miscellaneous 60. How do you allow for the impact of the promotional message since it is likely to change throughout the life cycle of the brand? It is not explicitly incorporated. The results say that at a given average level of quality in terms of the copy, and the nature of the spend, they tend to pay off at the particular ROI we calculate. 61. Did you look at expenditures on the Internet? Internet spending is not included in this analysis as data were not available as far back as needed for this study. Internet spending currently accounts for only about 1% of promotional spending. 62. Several of my company brands were included in the analysis. Is there any way to obtain an analysis for these brands? No, as the analysis was done in aggregate, not by brand. However, some exploratory work was done for a few specific products. In most cases, it was difficult to "tease out" the information. The problem is that there is only a maximum of 60 observations to handle all variables, plus lags, plus the need to control for trends. Our hope is that with the addition of the 2000 data (and 12 more observations), we will be able to provide this level of insight. 63. How have you factored in the role seasonality plays in measuring ROI for a brand? This analysis did not specifically address seasonality at a brand level. On the whole, the industry in aggregate does not march to the same seasonal drum. But certainly, that might be happening for some products (eg, the antihistamine category). The extent to which this might affect the results would depend on whether the marketing expenditures followed the same seasonality as the sales numbers. If that is the case, the ROI would probably be a little overstated, since the seasonality in sales that occurs naturally is being attributed to the marketing. So these results might be overstated if you have a highly seasonal product that also has seasonal advertising. We will be able to analyze this more thoroughly in future brand-specific analyses. 64. Can you explain how you arrived at base revenues? This was obtained by multiplying median unit sales times median price. The medians for the cells are shown in the descriptive statistics we've published for each cell. 65. Have you calculated the "ideal" spend mix for each of the nine major cells? No, that would be very difficult to do. What you need in order to really model that in detail is to get a better fix on the saturation level as well as on the threshold level in terms of what type of expenditures you need. While there is a methodology for doing this calculation, the question pushes the current analysis too far at this point to determine the optimal expense. However, the analysis does give one guidance of what to do incrementally. In aggregate, maybe that incremental dollar should go toward journal advertising and PME. But it's not as literal as saying, "Here is the optimal mix." 66. What can you tell us about the dynamics of an expensive brand, such as Enbrel, which costs $12,000 per year? Probably not very much. This study looked at the median brand because it was more representative of the average. This aggregate analysis is most confident when it is talking about the center of the data — the middle brand. It's less confident when it is talking about the extremes, like a very expensive brand such as Enbrel. 67. With regard to the graph "Branded Drug Marketing Expenditures," was the increased cost or charges from one year to the next taken into consideration? The detailing factors in the audits are adjusted each year based on the CPI (Consumer Price Index). The Physician Meetings & Events costs are held constant each year, so those remained the same over the course of this study. DTC and JAD are based on the amount of actual spending for each of those types, and thus would be affected by any increases in the prices that are charged. 68. You looked at increased sales dollars, but not increased profitability. How about accounting for profitability by multiplying incremental sales by gross margin? We didn't do that. This was an ROI analysis, that being a "revenue" return on investment, not "profit." It's up to individual companies to make the adjustments because these would differ significantly depending on the brand. 69. Why is the median brand sales figure $17 million in the $25-$50 million range for 1997-1999? The classification was based on 1999 sales. All of the evaluated brands in this period did have 1999 sales above $25 million, but they were launched in the period 1997-1999. Many of the brands had sales below $25 million in 1997 and 1998, so that the overall median was below $25 million. 70. The data used were based on audited data, which in some cases may be underestimated. Does this affect the findings? It may, depending on the assumptions used for underestimated costs or coverage. If, for example, there is an underestimate of costs, this might have resulted in an overestimate of ROI, and thus the ROIs should be brought down a little. 71. Are these results applicable to OTC brands and, if not, how can we adjust them to make them applicable? The results are not applicable to OTC brands since OTC brands are not part of the database. It would be very risky to extrapolate the results of this study, say for DTC, to the OTC world. There just isn't the same interaction between patient and doctor that occurs with ethical drugs. 72. Point of clarification: Were only retail brands included since the dependent variable measured was Rxs? In other words, were hospital brands included? The information included branded Rx products as well as generic Rx products that had retail sales above $25 million in 1999. A prescription written while a person was in the hospital, but filled at a retail pharmacy, could be included; however, inpatient hospital pharmacy information is not included. 73. Was any work done or planned to look at prices from the manufacturer to the wholesaler rather than retail price? The audit used provides retail price. These are somewhat higher than wholesale price, but that differential varies greatly from brand to brand (depending on rebates, discounts, customer segment, etc). The extent to which the retail price is higher than the price to the wholesaler would tend to move up our ROIs. However, sales from other channels not picked up in this analysis (eg, mail order, hospice, etc) would provide some offset to this. 74. If you included generics and brands, isn't that mixing apples and oranges? Generics do not market in the same way, nor would physicians respond in the same way to generic brand marketing. No, we are not mixing apples and oranges. This analysis is of sales of branded products. One of the variables we use as a potential explainer of branded sales is the sales of generics. High generic sales could suggest a growing category, or added attention to the category. So we only analyze the causes of branded sales; generic sales are included just as a potential explainer of branded sales, and are not of direct interest. |
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