Abbott Laboratories is poised to take a leap into direct-to-consumer television advertising with its proposed acquisition of BASF AG’s Knoll Pharmaceuticals unit.
When it comes to hawking drugs on television, Abbott has stayed on the sidelines while Pfizer Inc. and others have spent tens of millions of dollars annually in one of the drug industry’s fastest-growing marketing venues.
But Abbott will inherit an ambitious campaign from Knoll’s TV ads for the weight loss drug Meridia.
Knoll spent about $37 million on television advertising for Meridia in the first nine months of last year, according to the most recent figures available from Competitive Media Reporting in New York.
Abbott executives have said their products historically haven’t lent themselves to television, magazine or billboard ads.
Abbott pharmaceuticals range from AIDS treatments and antibiotics to a top-selling drug for bipolar disorder. Abbott has marketed its drugs via specialized health publications and journals and through sales representatives in doctors’ offices and hospitals.
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Abbott wouldn’t comment about its strategy for Meridia or other potential television advertising campaigns, citing a quiet period for the two companies until the $6.9 billion Knoll deal closes later this quarter.
Another local drug company, Lake Forest-based TAP Pharmaceutical Products Inc., a joint venture between Abbott and Takeda Chemical Industries of Osaka, Japan, began in July a television campaign for its heartburn drug Prevacid. TAP spent more than $15 million through September of last year on television advertising for Prevacid.
To be sure, drug industry spending on television ads has more than tripled since 1997, when the U.S. Food and Drug Administration decided to loosen restraints on television and radio advertisements for prescription drugs.
The drug industry spent $1.1 billion on television advertising in 1999, according to IMS Health of Plymouth Meeting, Pa. That compares with $664 million in 1998 and $310 million in 1997.
Bank holiday: Investment bankers tell us they are salivating at the opportunity to assist Northwestern Memorial Hospital with financing yet another new building project in the Streeterville neighborhood.
Northwestern Memorial Chief Executive Gary Mecklenburg isn’t ready to disclose how much of the estimated $200 million needed to build a new Prentice Women’s Hospital will be borrowed.
Still, investment bankers will be pleased that cash-rich Northwestern Memorial will issue some bonds for the women’s facility.
Since Northwestern Memorial is sitting on more than $1 billion in cash and investments and has a stellar bond rating, the hospital isn’t exactly a risk for bankers.
When Northwestern Memorial began the process to finance its now nearly 2-year-old academic medical center in the mid-1990s, less than half of the $580 million project came from issuing bonds. Of the project costs, $225 million was financed by issuing bonds; $65 million came from donations; and the $290 million balance came from cash and other monies from “funded depreciation accounts” hospitals set aside for expansions.
A similar formula will be used this time, although specifics have yet to be finalized.
“We will use a mix of debt, cash and fundraising,” Mecklenburg said.
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