Source: Launch Success Encyclopedia, Excludes diagnostic equipment.

In terms of promotional mix, DTC remains a smaller portion of the overall launch budget compared to healthcare provider (HCP) focused promotion (when factoring in both working media spend and investment in in-person engagements), yet it remains a critical element. Roughly one-third of first year promotional dollars for specialty launches are allocated to DTC efforts, with the remainder directed toward HCP promotion. For many specialty drugs, two-thirds of first year promotional spend focused on HCPs, underscoring the continuing importance of sales reps, medical outreach, and other professional channels. Still, the share attributed to DTC has gradually increased with the expansion of digital media and new consumer engagement tactics.

Source: Launch Success Encyclopedia.

While DTC represents a smaller portion of the overall launch promotional mix, it generally serves as a reliable bellwether for success. High performing product launches tend to invest far more in DTC advertising than lower performing launches. Across launch cohorts, products that achieve over $100 million in first year sales spend more on DTC than their counterparts. Between 2022 and 2024, top launches spent an average of $28 million on DTC in the first year, compared to just $13 million for launches generating less than $100 million in sales. This translates to a 91% higher DTC budget for the top-performing cohort. While causation is complex, exceptional products may attract both high sales and large ad budgets, the association is clear: substantial early DTC investment is a common trait among successful launches. In today's competitive market, making an impact often requires robust consumer outreach to drive awareness and uptake.

Source: Launch Success Encyclopedia.

Balancing Demand Generation with ROI

The impact of DTC advertising on consumer awareness remains a vital element in generating consumer demand and guiding patients through the treatment funnel. Among specialty drug launches between 2013–2023, those investing at least $1 million in DTC saw nearly double the number of patients per treating provider in Year 1 compared to launches with minimal DTC. This enhanced HCP productivity ratio persisted into Year 5, with about a 45% higher rate than products with little or no DTC spend. A well-executed DTC campaign can significantly increase the number of patients discussing new therapies with their physicians, boosting each provider’s contribution to brand uptake.

Source: IQVIA US Market Access Strategy Consulting analysis; Pharmacy Channel Launches Only.

However, the story isn’t all positive. In recent years, the return on investment for DTC has declined sharply. A decade ago, new product launches delivered outstanding sales relative to DTC investment. For specialty products launched in 2013, the gross sales to DTC spend ratio during the first two years was about 85:1, an exceptionally high return on investment (ROI). Fast forward nine years to 2022 launches, and this ratio plummeted to nearly 1:1, signaling a fundamental shift. In one notable example, nine specialty launches in 2022 generated $1.3 billion in combined sales while spending $1.1 billion on DTC advertising in the first 24 months on market, leaving little margin for other launch expenses. After factoring in costs for sales force, physician outreach, payer rebates, and clinical evidence generation, the ratio suggests brands struggle to recoup their overall investment in the short term. Many of these recent launches are effectively underwater on ROI when DTC spend is included.

Several factors explain this dramatic decline in DTC efficiency:

• Rising Advertising Costs: The cost of prime-time TV and broad digital campaigns has increased, eroding ROI. Rising media costs mean companies are spending more to maintain the same reach.
• Market Saturation and Attention Scarcity: Consumers face a barrage of pharmaceutical ads, with many brands competing for limited attention. Achieving mindshare requires greater frequency and creativity, raising the cost per engaged patient.
• Access and Affordability Barriers: Even when DTC stimulates interest, insurance access and high out-of-pocket costs often prevent consumers from initiating therapy, effectively reducing realized sales per advertising dollar.

These factors combine to make DTC launch spend an unreliable predictor of elevated ROI. Launch teams must recalibrate expectations and strategies, recognizing that indiscriminate spending on consumer ads may be inefficient or even counterproductive.

The Escalating Cost of Patient Acquisition

One of the clearest markers of declining DTC efficiency is the soaring cost to acquire each patient. Among 2022 launches, the average DTC spend per patient start was $13,000 within the first 24 months, an enormous jump from the $2,700 per patient seen for 2018 launches. This 375 percent increase highlights how much less efficient consumer outreach has become.

The variation in patient acquisition cost across products is striking. Some brands managed to keep DTC cost per patient under a few hundred dollars, while others spent more than $80,000 per patient acquired. This disparity suggests that some teams are far more effective at translating ad dollars into patient uptake, often due to superior audience identification strategies or more compelling products. Others rely on mass-market saturation, burning through budgets for relatively little return.

Source: Launch Success Encyclopedia, excludes vaccines.

Understanding patient value and healthcare provider productivity are key metrics that can be used to justify the cost of DTC advertising. For brands that have high patient value, or those with high physician productivity as measured by the number of their patients, the value may justify the cost of acquisition and continued investment.

However, high acquisition costs are often the flip side of low ROI, indicating resources may be misallocated. When tens of thousands of dollars in advertising are required to acquire a single patient, it’s worth questioning whether these funds could be better spent elsewhere or if such high DTC spend is sustainable. Tailoring messaging to the right consumer population can dramatically improve efficiency, whereas broad, unfocused campaigns can waste resources.

Strategies for Effective DTC Spend at Launch

Given these trends, pharmaceutical companies must adopt a more strategic, data-driven approach to DTC advertising. Four key strategies can drive a more effective return on marketing investment:

• Communicate True Product Differentiation: DTC campaigns should communicate a product’s unique benefits such as novel mechanisms, superior outcomes, or patient-centric advantages, in an accessible way. Clearly presenting what sets a product apart not only attracts the right patients but also builds trust.
• Balance HCP and DTC Promotion According to Brand Needs: Each launch requires a tailored mix of HCP-directed and consumer-directed promotion. The optimal split depends on factors like treatment area, patient journey, and product type. For a well-known condition with established demand, heavier HCP emphasis may suffice, while a first-in-class therapy for a lesser-known disease may need more consumer education.
• Adopt Precision Marketing and Personalized Outreach: The era of broad-reaching TV ads is fading (regardless of the recent developments at the FDA designed to encourage emphasis on oversight within the channel). Efficiency now hinges on precision engagement—identifying the right audiences and using advanced tools to connect with patients most likely to benefit, through the channels and messages most likely to resonate. Techniques like audience segmentation in programmatic media accelerate the path from data to insight to action, allowing brands to reach individuals actively seeking solutions and responding with relevance and speed.
• Continuous Measurement, Optimization, and Flexibility: Top-performing brands rigorously track key metrics such as new patient starts, cost per lead, and prescription lift on an ongoing basis. Consistent media measurement and continuous optimization are essential: if a channel or message underperforms, budgets should be swiftly reallocated to higher-yield tactics. Nowhere is this more important than launch promotion, which is a learning process that requires constant fine-tuning, with data-driven insights allowing for strategic adjustments that maximize patient impact and marketing success. Investment in these capabilities can prevent the large swings and misses that occur with DTC advertising.

Together, these strategies form a playbook for smarter DTC spend. The overarching message is to focus on product strengths, optimize promotional mix, and apply data-driven insights to continuously improve the brand’s ability to reach and resonate with the intended audience. By embracing these principles, pharmaceutical companies avoid the trap of simply spending more, and instead spend wisely, achieving better results even as ROI challenges persist.

Achieving Success in the Modern DTC Landscape

DTC advertising in pharmaceutical launches stands at a crossroads. Budgets are at record highs, but returns have hit historic lows. The data is clear: higher spending alone no longer guarantees success. To navigate this environment, launch teams must blend analytic rigor with marketing ingenuity, focusing on smart spending that identifies the right audiences, delivers compelling and differentiated messages, and continually optimizes based on evidence.

Despite the challenges, DTC advertising remains a powerful tool when executed thoughtfully. It can build awareness and accelerate adoption at a scale unmatched by other tactics, particularly for new therapies aiming to transform standards of care. The fundamental opportunity to engage patients in their health decisions and drive them toward life-changing treatments remains intact. By refining approaches and applying lessons from recent years, pharmaceutical companies can ensure that increased spending translates into higher returns for future launches. Please contact your IQVIA representative for more information.