Health

Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

The pharmaceutical industry has been stung lately by the controversy over soaring drug prices and the rise of congressional punching bag Martin Shkreli. The industry would very much like people to focus instead on its genuinely amazing recent medical advances, which include rapid cures for Hepatitis C and drugs that unleash the human immune system to fight cancer.  

On the Ropes
Valeant needs more than Super Bowl ads to turn things around.
Source: Bloomberg

But Sunday's Super Bowl delivered rather less-inspiring messages from drugmakers. Two ads came from Valeant -- the Canadian poster child for the industry's worst price-hiking practices -- one for its Jublia toenail fungus medicine, and another for diarrhea treatment Xifaxan. Another ad from AstraZeneca and Daiichi-Sankyo focused on opioid-induced constipation -- a problem the pharmaceutical industry arguably and controversially helped create on a large scale.

A focus on digestion is arguably canny on a day devoted to great feats of meat and cheese consumption. And the "Gut Guy" in the Xifaxan ad is personable, for an anthropomorphic intestine. But the optics aren't great here. The pharmaceutical industry shouldn't be going out of its way to focus the world's attention on pricey drugs that don't exactly save lives and which have alternatives. 

Jublia costs more than $1,000 for a tiny bottle. Sixty tablets of Xifaxan can cost more than $1,500, according to GoodRX. And AstraZeneca's constipation treatment Movantik can cost nearly $300 for 30 tablets. The Super Bowl ad doesn't directly mention Movantik, but directs viewers to a website about the condition, which points to a different website for the drug. The only other Super Bowl ad from a drugmaker was for Pfizer's Advil, a painkiller that has been available over-the-counter for more than 30 years.

The ads at least make sense on a company level. Valeant seems to be spending more on ads as it attempts to transform from its previous model -- which focused on buying drugs and jacking up their prices -- to one that centers on selling more of the drugs it already has and is developing. Jublia is one of Valeant's best-selling products. Xifaxan, acquired in the company's $11 billion deal for Salix last year, is expected to be the company's first drug to pass $1 billion in sales in a year. Valeant needs both medicines to do well to get its sales growing again without major price hikes. 

Stalling Out
Valeant is looking to re-start its growth engine, without massive price hikes.
Source: Bloomberg

AstraZeneca's Movantik, meanwhile, is expected to reach $300 million in sales by 2019, but is competing in a crowded market. A Super Bowl ad, even an oblique one, should help it stand out.

But these ads come just as the industry is launching a charm offensive seeking to prevent any laws that might rein in prices. The industry's main trade group intends to spend 10 percent more on advertising than it did in 2015, according to a Wall Street Journal report. Millions of dollars of its budget will go to messages highlighting the industry's innovative research and programs designed to help people afford drugs. These latter ads won't target the public, but policymakers. Celgene CEO Robert Hugin reportedly said the industry wants to reach "7,000 Americans who matter," as it's not confident it can get through to the millions of Americans who are angry about rising drug prices. 

Those 7,000 people, and many more, likely heard about the industry getting grilled in Congress last week over its pricing practices. The industry's only response, on a platform viewed by an estimated 100 million people? Several ads for digestive issues (inspiring Twitter users to create a mocking, off-color hash tag); and a purple-robed, fungus-fighting super-toe.

If the industry doesn't get more aggressive about defining itself, then it will continue to let people and companies like Martin Shkreli and Valeant represent pharma and biotech to the world. "Gut Guy" won't cut it.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Max Nisen in New York at mnisen@bloomberg.net

To contact the editor responsible for this story:
Mark Gongloff at mgongloff1@bloomberg.net