INSIGHTS AND PERSPECTIVES

Vitamin marketers may need to supplement ad buys

BY TS Kelly, Alphonso

Vitamin usage is at an all-time high in the United States. Three-quarters of U.S. adults report regularly taking dietary supplements, according to research from CRN and Ipsos.  Health-conscious consumers spent $30 billion on vitamins and supplements last year alone. And lest you think that the lion’s share of the vitamin marketplace’s vigor is coming from older Americans, 74% of 18-34 year-olds are taking dietary supplements.

Men and women differ slightly in their reasons behind taking vitamins. While concerns about “overall wellness” is the top reason to take a dietary supplement among both genders, there is a divide when you dig deeper. For women, “fill nutritional gaps” is the next most popular reason, followed by “bone health.” For men, “energy” is a strong second, with “heart health,” “immune health,” and “filling nutritional gaps” equally of interest, tied in third place.

These are great insights, all of which could drive vitamin marketing plans. But, looking closely at Alphonso data on June 2018 TV spending, these findings aren’t necessarily influencing television ad buys.

Pfizer laid claim to the top commercial in June, spending $2 million during the month to tout its Centrum vitamins on a broad range of networks, including Travel Channel, USA Network, A&E, and Hallmark Channel. The majority of airings were seen on “Dateline,” “Family Feud,” and “Law & Order: SVU,” reaching a wide swath of consumers through its television buy.

Despite Pfizer claiming the top spot, vitamin maker Schiff surpassed that buy significantly, with four commercials promoting their MegaRed and Digestive Aid brands—at a total spend of nearly $3.4 million.

The three ads for MegaRed are variations of the same creative — a lithe female dancer sharing the multivitamin’s benefits. Buys against the ad are squarely focused on reaching women, skewing to the older set. The three ads aired on reruns of “The New Adventures of the Old Christine,” “Murder She Wrote,” “Matlock,” and “Mom” on networks such as TV Land and Hallmark Movies & Mysteries. There were also airings on Nick Jr. to reaching stay-at-home moms.

The two Schiff Digestive Aid commercials took a similar tact to target women, with the addition of “Golden Girls” reruns in the mix. Interestingly though, one of the two ads centers on a man “staying strong” to lead a boy scouts camping expedition. Clearly, the assumption is that women primarily buy dietary supplements for everyone in the household — grown men included.

Needless to say, perhaps it is time for vitamin-makers to give their TV plans a healthy boost by applying some of the learnings from CRN and Ipsos — not to mention Alphonso.


TS Kelly of AlphonsoTS Kelly is senior vice president of research for Alphonso, a TV data company that provides real-time TV campaign analytics, one-to-one TV ad retargeting, and closed-loop attribution for brands and agencies. In his role at Alphonso, Kelly deep dives into television data and insights, giving clients guidance on how to optimize their TV spend.

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Special attention for specialty pharmaceuticals

Specialty pharmaceuticals are the talk of the town: in 2016, specialty sales rose to $181 billion and 50% of drugs sold in the United States are expected to be specialty pharmaceuticals in three years. Specialty drugs are defined, in part, by their high cost: often $1,000 or more per month — and spending on them is growing 15% to 20% a year.

The high price tag is derived from various influences, but generally, the drugs treating complex conditions are advanced in composition and often have unique handling needs. The latter is where specialty pharmacy comes in: the experts manage requirements for quick delivery, temperature-controlled storage and shipping, and biologic demands such as injection or infusion administration. The pharmacists, in turn, also manage the increased human needs of the advanced treatment regimens, including patient and caregiver education, chronic disease symptom management — sometimes with the addition of other pharmaceuticals such as controlled substances — and complex consultation scenarios.

Who’s involved
Patients can’t always simply pick up these cutting-edge pharmaceuticals — whether taken orally, injected or infused — at their local retail pharmacy. Specialty pharmaceuticals are prescribed mainly for patients with serious chronic diseases and rare genetic conditions such as multiple sclerosis, cancer, rheumatoid arthritis, severe dermatitis, psoriasis, inflammatory bowel disease, HIV, hemophilia and hepatitis C. These patients, who are able to reap the benefits of advanced therapeutics, require more than a stop at the pharmacy counter: specialty pharmacists must carefully explain and review proper administration, side effects, and other regimen demands and considerations. Specialty treatments are often quite different from patients’ previous or existing regimens.

The specialty pharmacists themselves work in a variety of practice settings under various ownership entities. About half of all specialty pharmacies are independently owned, while others are under the umbrella of healthcare providers, health plans, or pharmacy benefit managers (PBMs); a small percentage are wholesalers or retailers. The various channels are jockeying for control of distribution in this specialty market.

The task of distribution is not a simple one: disease journeys are complex and both pharmacists and clinicians must ensure patients have the appropriate understanding, dosage, and coping mechanisms to handle the protocol and the condition at large.

What’s involved
When discussing specialty pharmaceuticals, one topic comes up again and again: high costs. Health plans and PBMs pay particular attention to the use of specialty drugs, which also have a growing list of restrictions and requirements both at the federal and state level. Prescriber validation, substance verification and reimbursement claims collection need to become part of the specialty pharmacy daily workflow if it is to manage risk and ensure payments for ultra-costly therapies. This operational and compliance aspect will only become more important as more specialty medications become available and there are more patients to serve.

Prescription validity verification
While large, chain pharmacies may have systems in place for prescription validation, many specialty pharmacies currently rely on “mix-and-match” data and technology that have glaring gaps and inefficiencies. As specialty pharmacy grows, it should be able to perform real-time, comprehensive checks within existing workflows. The purpose of the checks is not only to verify prescriptive authority but also to mitigate the risk of regulatory fines, and maintain compliance with federal licensing, state credentials and controlled substance regulations.

Prescriber verification is also a vital step in ensuring patient safety. Specialty pharmacists need to know who the prescribers are and if they can authorize controlled substances, which sometimes accompany therapies for complex diseases like cancer.

Next steps

What was once just a tiny segment of the pharmaceutical industry is now promising widespread innovation and further advancement. As more and more specialty drugs enter the market, pharmacies must consider how data-driven validation will enable a growth and operational success. This is not the place for pharmacies to falter on compliance or verification: patients requiring high-touch care first require trust.

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Analysis: Amazon’s PillPack acquisition could rattle pharmacy market

Amazon’s acquisition of PillPack is a warning shot in what is about to become a major battle within the pharmacy space. Not only has Amazon finally made a solid move into pharmacy, it has done so via an innovative supplier which helps patients manage and organize their prescription drugs.

In our view, this is only the first play in what will be an increasingly aggressive strategy by Amazon to develop a much more significant presence in the pharmacy market. This is incredibly bad news for traditional players, like Walgreens and CVS, who stand to lose the most from Amazon’s determination to grow its share.

The problem for the traditional players is three-fold.

Firstly, the most loyal part of their pharmacy customer base is the older consumer. Over the next ten years, this cohort will become a much less significant part of the market and this will leave drugstores exposed to younger shoppers who are more likely to use both Amazon and remote pharmacy services. There is a significant risk that drugstores will see a real erosion in pharmacy customer share, especially in urban and suburban areas where Amazon can quickly deliver.

Secondly, both CVS and Walgreens have become particularly reliant on the pharmacy side to drive their businesses forward. Indeed, both companies – and CVS in particular – have consistently overlooked opportunities to improve and enhance their general retail propositions. This now means that the retail side of the business is largely incapable of driving footfall into stores which could help support the prescription and pharmacy side of the business. This folly of not investing in retail will become apparent over the next few years.

Thirdly, Amazon’s entry into any market will put downward pressure on prices and upward pressure on costs as others try to match its service. This will ultimately result in weaker earnings for drugstores going forward. Thre may be an opportunity for Walgreens to mitigate this thanks to the firepower of Boots and its potential in higher margin beauty categories, but we are far less optimistic about the prospects for CVS.

These unfavorable dynamics mean that drugstores need to rethink their futures. The addition of more services and positioning themselves as a destination for health advice and simple medical treatments are now more critical than ever. CVS has talked about this, but given Amazon’s advance, action rather than chatter is now required.

It goes without saying that despite Amazon’s determination, the pharmacy market is not as simple as other categories it has entered. Products and services are more complex and there are more regulations and procedures that need to be followed. It is also the case that some consumers may be reluctant to use Amazon for their health needs. Even so, we believe the market is ripe for disruption and, as it has demonstrated time and again, Amazon is just the player to pull that off.

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