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Direct Response Marketing

Field Reports

1 May, 2006 By: Thomas Haire, Nicole Urso Response


WASHINGTON — The Federal Trade Commission (FTC) recently announced that it will begin conducting research on the competitive effects of generic drugs being advertised alongside brand-name prescription drugs.


Generic drugs are chemically identical to their brand-name prescription counterparts, but are marketed and sold for much less than the branded version. The FTC wants to determine the impact that new generic drug advertisements would have on the marketplace and how they would affect the pricing of brand-name drugs.

The direct marketing industry has seen the tremendous impact that loosened restrictions on prescription drugs had in the marketplace. Major pharmaceuticals firms were given the green light to pump billions of dollars into long- and short-form TV ads, as well as radio and Internet ads, to promote everything from heart medication to toenail medication. The firms bought up a huge portion of discounted direct response media, driving rates up for everyone else. However, with increasing lawsuits and negative press regarding the irresponsible marketing of prescription brands, some networks have noticed a decline in pharmaceutical ads. If generic drugs enter the airwaves with the same ferocity, they could also carry a tremendous impact on the direct response industry with them.

The FTC will be accepting feedback and comments on its "Authorized Generic Drug Study" until June 5. The Commission also authorized the staff to use compulsory process to collect the information needed for the study from approximately 80 brand-name drug manufacturers, 10 authorized generic companies and 100 independent generic manufacturers, according to an FTC news release.

The Commission also stated that, under certain circumstances, "the Hatch-Waxman Act allows the first-filing generic competitor of a branded drug a 180-day marketing exclusivity period. This marketing exclusivity period granted to certain generic first-filers, however, does not preclude competition from 'authorized generics' that have an approved New Drug Application (NDA) on file with the FDA."

Brand name drug manufacturers have consequently begun marketing their authorized generic drugs simultaneously with the first-filer exclusivity period. This behavior is what has spurred the FTC to investigate the impacts on pharmaceutical competition.

The Commission will use the public comments to refine its study and to seek approval from the Office of Management and Budget (OMB) under the Paperwork Reduction Act to issue the information collection orders. The FTC stated that it will prepare a final report by 2007.

 

ABC Offers Free TV Downloads — With Ads

 

By Nicole Urso (nurso@questex.com)

NEW YORK — ABC continues to boost its reputation as the trendsetter in online TV offerings. Only six months after it struck a deal with Apple's iTunes to sell commercial-free episodes of hit TV series, such as "Lost" and "Desperate Housewives," ABC announced in early April that it will offer the same shows for free on its Web site (www.abc.com).

"Lost" is being offered as a free download — with ads — on abc.com.
"Lost" is being offered as a free download — with ads — on abc.com.

The only catch for consumers, and the sweet spot for advertisers, is that the free shows on the ABC Web site will include commercials that cannot be skipped or erased. The shows on iTunes can be downloaded (commercial free) for $1.99 per episode. ABC hopes that consumers will consider its new offering somewhat of an even tradeoff. They can download the shows for free in exchange for watching the commercials stuffed between the programming.

ABC's iTunes venture has been tremendously popular with consumers, who have bought more than 4 million downloads to date. It also spurred other networks to follow the lead and offer their programming on iTunes and other digital platforms. However, with the growing popularity of digital technology, consumers have several options of seeking out and downloading commercial-free television without the $1.99-per-episode charge, and piracy and file swapping is a constant concern.

ABC believes that its new venture will provide an alternative for consumers without digital video recorders (DVRs), or those with DVRs who forgot to record the show, and for consumers who simply wouldn't mind watching commercials in exchange for free digital downloads.

 

Former Dell Exec Michael George Takes QVC Helm

 

By Nicole Urso (nurso@questex.com)

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