The American Medical Association (AMA), a powerful lobby that represents more than 200,000 doctors and medical students in the United States, is calling for a ban on direct-to-consumer ads that pitch prescription drugs and medical devices. 

Noting that the US is one of only two countries in the world that allow such ads, the AMA says that "direct-to-consumer advertising...inflates demand for new and more expensive drugs, even when these drugs may not be appropriate."

The AMA's stunning reversal – this is the first time it has supported a ban on direct-to-consumer ads – arguably couldn't come at a worse time for pharma companies.

Many of them find themselves under increased scrutiny over prescription drug pricing and concerns around anti-competitive behavior. At the same time, the industry as a whole is has been leaning heavily on advertising.

Citing research from Kantar Media, the AMA pointed out that drugmakers are now spending $4.5bn a year on ads, a figure that has increased by 30% in the past two years alone.

With pharma out of favor with consumers and politicians, a ban on direct-to-consumer advertising seems possible, and if one was implemented, pharma companies would face significant challenges marketing their wares.

Unfortunately, pharma's digital efforts have been falling short.

According to recent research by Deloitte Consulting and the Gerson Lehrman Group, pharma companies are largely underinvesting in digital outreach to physicians. 

They invested just $1.4bn in online advertising last year, just a quarter of what they spent on ads overall and an amount that far lags other industries such as retail and financial services.

The result: there is a significant trust gap with physicians, 75% of whom lack trust in the information provided by pharma.

Pharma companies are also missing out on opportunities as third parties move in to fill the gaps they are leaving.

The ill-effects of pharma's underinvestment in digital could prove even more costly for pharma companies if a ban on direct-to-consumer ads becomes a reality.

While such a ban is unlikely to be implemented overnight, and pharma companies will almost certainly put up a huge fight in an effort to prevent one, the AMA's support of a ban should serve as a wake up call for an industry that could find its voice muffled in a big way.

So what should pharma do?

To start, it needs to increase its investment in physician outreach through mobile and social channels.

But it also needs to develop better, more nuanced strategies for engaging consumers online.

Here, content strategy is crucial. Numerous healthcare brands have proven that they're capable of developing effective content marketing campaigns

Given that drugmakers have some of the most complex and tense relationships with consumers of all healthcare brands, they'll need to start finding ways to deliver valuable content to consumers online sooner rather than later, potential ban on advertising notwithstanding.

For more on this topic, read:

Patricio Robles

Published 20 November, 2015 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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