“We Could Use More Focus” Addendum

HealthCare

I saw FiercePharma story on ad spending and thought I’d post a little update.  According the story, AbbVie spent $500 million on advertising for Humira in 2020.  The U.S. is only one of two countries that permit direct-to-consumer advertising (New Zealand is the other), so this figure suggests AbbVie spent about 3% of domestic Humira sales on advertising.  Humira is a late-cycle product (it will be subject to follow on biologic competition in 2023), so this ad figure was down year-on-year, and probably represents a bit of an “under” investment as a result.  AbbVie has two other products it thinks will be blockbusters and is investing behind them aggressively.  These are Skyrizi and Rinvoq.  According to FiercePharma, AbbVie spent $202 million on Skyrizi ads and $176 million on Rinvoq ads in 2020.  These figures represent approximately 15% and 27% of domestic sales, respectively.

These three drugs no doubt account for the bulk of AbbVie’s advertising spend.  The company’s other drugs either simply don’t warrant the investment or involve a much different physician-patient dynamic.  For example, drugs in AbbVie’s oncology portfolio simply wouldn’t be expected to be as sensitive to DTC.  Thus, when I see AbbVie spending about 4.8% of sales, in aggregate, on these three drugs, I feel pretty good about the 5-8% figure I use in my “we could use more focus” piece, and suspect the true industry figure is closer to the lower end of this range in aggregate. 

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