Sickness and health By Mark Schon

As a candidate, Bill Clinton promised to create more jobs. As the president, however, he may have cost dozens of people their positions at Lifetime Medical Television.

LMT, the 10-year-old block of programming that ends its regular Sunday run on the Lifetime cable network Aug. 1, was never intended for lay viewers (unless they happened to enjoy watching a good arthroscopic procedure). Rather, it was aimed at physicians, and pharmaceutical firms flocked to the channel to reach this lucrative audience. Thanks to spending by companies such as Pfizer, Ciba-Geigy and Merck, LMT grew steadily. Last year, in fact, the service posted a 30% increase on ad revenues of $30 million.
But Clinton’s arrival at the White House–and his plan to reform the nation’s health-care system–sent oncerobust LMT onto the critical list. A mass dismissal of production staff in May was attributed in part to an advertising slump. One former LMT executive says ad sales were off $2 million in the first quarter alone. Dan McKillen, senior vp of sales for Lifetime Medical, estimates the service was looking at “very minimal growth” in ad revenues for ’93. “If anything, it would have been up 5%,” he says. “When you’re used to going up 25-30% a year, that’s not good news.”
Add in the FDA’s crackdown on prescription drug commercials and the desire by female-skewing Lifetime to counterprogram Sunday sports events, and you have the key reasons why the plug was pulled. But while LMT’s departure is an isolated instance, it’s also symptomatic of the problem presented by the specter of major changes in the nation’s medical system.
“In my experience,” says McKillen, “the pharmaceutical companies tend to manage backward from the dividends. When they realize the profits are not there, they cut expenses. Marketing and promotion are getting hammered bigtime. You look at the medical journals, they are probably down 25%. You look at the medical television business that’s been growing in leaps and bounds and it’s fairly flat. Promotion has come under the microscope.”
Says Dr. Robert Portman, chairman of the medical advertising agency CHC & MED, “The current posture of all pharmaceutical companies is extremely conservative. It’s clear in terms of client* agency relationships that there’s a budget consciousness that hasn’t been seen in the industry for quite some time.”
Besides, advertising is just not as important as the face-to-face selling that is the bedrock of pharmaceuticals. “The sales force is the first priority,” explains Tom Lom, president and coo of William Douglas McAdams/New York, “and the last area that’s going to be affected by budget cutting. Non-personal selling activities, like broadcast and journals and so on, are more likely to be the first ones hit.”
Companies may be able to slash sales staff, however, as managed care becomes more popular. The spread of HMOs has centralized drug buying decisions. Aheady, says Lom, “some action has been taken as the managed-care audience becomes more important. The individual physician is still important, but is becoming relatively less dominant today and into the future.” At the same time, however, it’s managed care–and the threat of government mandated managed care–that necessitates these very same staff cuts by exerting a downward pressure on drug prices.
The fate of LMT, which like Lifetime is a joint venture of Hearst, Viacom and ABC, had reportedly been up in the air long before Clinton. Lifetime wanted to “take Sundays back” for women viewers by selling or spinning off LMT into a service that reaches doctors directly. Former channel head Tom Burchill failed in attempts to forge a joint venture that would do just that, and discussions in May with AMA-owned American Medical Television, which airs Sundays on CNBC, were also fruitless.
According to Frank Fila, a former group product manager at Ciba-Geigy, Lifetime should have sold its medical service at this time last year, “when they still had a viable client list.” He says the arrival of Whittle’s Medical News Network in the second half of 1992 cost LMT such primary advertisers as Pfizer, Abbott, Ciba-Geigy, Marion Merrill Dow, Merck, Serenax and Jensen–all of which became charter sponsors for MNN.
Lifetime plans to incorporate pieces of LMT into its Pyramed Network, which is scheduled for a January launch. The computer-based, interactive service will carry medical programming and ads to doctors’ homes and offices. But Pyramed will have to compete with Whittle’s direct-to-physician service for pharmaceutical advertisers, just as it did on Sundays. Plus, with Clinton’s health plan still pending, there’s no indication the drug companies are done cutting back.
Mark Schone is a freelance writer based in New York.
Copyright Adweek L.P. (1993)