Big Pharma's ready for prime time

With traditional drug ads failing to make much impact, drug companies increasingly rely on placement in TV scripts, reports Fortune's John Simons.

By John Simons, Fortune writer

(Fortune) -- Try this at home: as the new television season unfolds, take note of the number of times your favorite character casually mentions a name-brand prescription drug. It'll happen more than you think.

So far this year, medicines like Vicodin, Cialis, Ambien, and Cipro have been cleverly woven into primetime plot lines more often than ever before. Between January and early September, pharmaceutical products and logos were seen or mentioned 705 times on broadcast and cable television, up from 630 such occurrences within the same period last year according to Nielsen Product Placement.

That kind of exposure is priceless. But, believe it or not, Big Pharma claims most of the namedropping is not the result of product placement deals with scriptwriters. Too bad. It's a missed opportunity for companies struggling to communicate the importance of complicated treatments.

More than a decade ago, the FDA allowed drugmakers to advertise directly to consumers. Today, the industry spends some $4.5 billion each year on television and print ads (up from roughly $1.1 billion in 1997). Yet TV drug ads - which invariably seem to feature dancing geriatrics celebrating newfound health, followed by a lengthy voice-over of dizzying side effects - are considered ineffective. For all the time and money the industry has spent in the last ten years, only one in ten U.S. consumers believe drug ads provide useful information, according to a recent PricewaterhouseCoopers survey.

Public attitude could turn around if drug companies take advantage of the increasing popularity of product placements and couple it with educational material about their medicines. It sounds hard to believe, but Americans have changed their general opinion on products inserted into movies and TV shows. Decades ago, placements were decried as uninvited commercial pervasiveness. Now, scriptwriters and set designers seamlessly weave everyday products into stories. In the era of Tivo, it's big business. Companies such as Nike, Apple (Charts, Fortune 500), and Ford (Charts, Fortune 500) make good use of these product cameos. Overall spending on product integrations was roughly $3.4 billion in 2006.

Naturally, the most popular shows for pharmaceutical mentions are medical-themed. Last season, NBC's "Scrubs", FOX's "House", and ABC's "Grey's Anatomy" were the top three shows that mentioned or displayed logos for pharma products. The namedropping included Abbott's (Charts, Fortune 500) painkiller, Vicodin, Pfizer's (Charts, Fortune 500) erectile dysfunction pill, Viagra, and Allergan's (Charts) cosmetic treatment, Botox.

The top pharmaceutical product integrated into television shows last season was Organon Pharmaceuticals's NuvaRing, a vaginal insert birth control device infused with slow-release hormones. Organon is one of the few companies that admits to brokering product placement deals. As a result NuvaRing's logo and the product has been seen or talked about on several primetime TV programs, including "Scrubs", "Grey's Anatomy", and CBS's "King of Queens".

The drug industry could go further than mere mentions, however. Television programs can offer instructive lessons on health. Consider a study published in the recent Journal of Health Communication. Researchers at the University of Southern California found that a three-episode plot line dealing with hypertension, obesity, and eating habits on NBC's "ER" had a positive impact on attitudes and behaviors of viewers. Viewers who watched the show were 65% more likely to show a positive change in their behavior after seeing the show. They were also more knowledgeable about general health and nutrition than those who didn't see the episodes.

"People get their information from entertainment," says Thomas Valente, associate professor of preventative medicine at USC's Keck School of Medicine. "It's not a magic bullet. It's a small piece of the puzzle, but we'd be silly to ignore its potential."

As would the pharmaceutical industry. But they will need to proceed with care. Consumers are easily offended by an overt hard sell. More importantly, the FDA, which doesn't regulate product placements, is watching. The industry has the opportunity to show the agency it can act responsibly and possibly benefit patients.

"In certain circumstances and at the right dosage level it can have great effect," says Simon Williams, president of New York-based brand consulting firm, Sterling Brands. "The more it seems forced the more consumers - especially younger ones - will respond negatively." So perhaps the first lesson of product integration should be: Do no harm.  Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.