January 9th, 2009

Glaxo to Pare Ads on U.S. Television

By Jeanne Whalen
The Wall Street Journal

Drug giant GlaxoSmithKline PLC is cutting back on its U.S. television advertising as it tries to spend its money more wisely and avoid some of the criticism aimed at heavy drug advertising, Chief Executive Andrew Witty said.

Glaxo is the world’s second-biggest drug maker by sales and one of the biggest advertisers in an industry that spent more than $5.2 billion on U.S. consumer ads in 2007. Television advertising has been an especially important marketing weapon for pharmaceutical companies in promoting drug brands, even as it attracts criticism for sometimes exaggerating the benefits and soft-pedaling the risks of drugs.

In an interview, Glaxo’s Mr. Witty declined to say how much the company would pull back. He said he believes consumer advertising still helps the public in many cases.

“I do, however, think there is too much,” he said. He added: “This year, you will see us do less on TV than you have in the past.”

Glaxo’s pledge comes as the drug industry makes a public-relations push aimed at blunting its worst critics before Democrats take control of the White House and Congress. Hoping to head off some Democrats’ desire to more closely regulate drug advertising, the industry’s main lobbying group recently announced new marketing restrictions for its members. Some companies, including Glaxo and Eli Lilly & Co., have also promised to start disclosing the fees they pay doctors for consulting services or for giving speeches to other doctors about drugs.

Glaxo spent $279.1 million on consumer advertising in the U.S. in the first half of 2008, ranking it second behind Pfizer Inc., which spent $462.5 million, according to The Nielsen Co. Glaxo’s spending was 23% lower than in the first half of 2007, largely because it halted advertising of the diabetes drug Avandia. Mr. Witty said he wasn’t sure how much Glaxo spent in total in 2008 but that it was “probably less” than in 2007. A Glaxo spokeswoman said the company doesn’t disclose its advertising spending.

Television advertising for prescription drugs is banned in most countries, save the U.S. and New Zealand. Mr. Witty said some of the industry’s ad spending is a waste of money. Some of it also offends consumers and irritates doctors, he said.

Glaxo, like most drug companies, is attempting to tighten its belt to cope with a worsening pharmaceutical market and the global economic downturn.

Glaxo will continue to advertise where “appropriate,” he said, such as promoting drugs for sexually transmitted diseases. Such ads have reminded patients and doctors to talk about STDs, a topic that often goes undiscussed, he said.

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