Ethical and pharmaceuticals communications was by far the biggest earner for those agencies able to split income generated by healthcare. It accounted for almost 44 per cent of fee income.
OTC work followed, although this accounted for only a little over 11 per cent. DTC clocked up 2.5 per cent, while devices/diagnostics and vitamins/alternative medicines accounted for almost three per cent and 3.4 per cent respectively.
For the second year running, the table has felt the effects of the Sarbanes-Oxley Act. Key agencies, once again, were prevented from submitting figures.
The two biggest players in the table in 2002, Medical Action Communications and WPP-owned Shire Health Group, are missing. So too are specialists and full-service agencies owned by international groups such as Interpublic's Weber Shandwick and Omnicom's Athena Medical PR.
WPP-owned Burson-Marsteller had 'a strong year', however, according to health-care practice MD Kate Triggs. The agency won global business from Pfizer for its neuropathic pain therapy Lyrica, and has gone on to win the UK business this year. A notable campaign was the launch of AstraZeneca statin Crestor, which saw a British Heart Foundation and Diabetes UK-sponsored supplement created for The Sunday Times.
With Government initiatives on tackling obesity at the forefront of its health agenda, Triggs says the consultancy's expertise in helping pharmaceutical companies to navigate the regulatory environment has been expanded to support food and nutrition clients facing similar challenges.
'We have been counselling a lot on issues such as obesity,' says Triggs.
Elsewhere, Euro PR Group saw a 44 per cent drop in its fee income when major client food supplement manufacturer Peter Black Healthcare was sold to the UK arm of Belgian firm Omega Pharma and the account work stopped.
Although the agency has resumed work for new owner Chefaro UK, 'it's taken a long time and the PR budget of the former company was much larger', says Euro PR Group MD Richard Price.
But it was the preparation for the biggest shake-up in general practice in 40 years, the new General Medical Services contract, that offered one of the biggest opportunities for healthcare PR firms during the year.
The new GMS contract rewards family doctors not for the number of patients they treat but on a performance system based on the quality of care. In the run-up to its full introduction on 1 April 2004, many healthcare agencies were preparing materials and ensuring campaigns were relevant to the new contract.
MD of sixth-placed agency Red Door Communications Catherine Warne says: 'The GMS contract is relevant to everything. If you don't understand it, it's commercial suicide.'
Warne says her firm focused last year on preparing educational materials on the so-called Quality Indicator Points, generating work for new and existing clients.
Although some agencies benefited from specialisation, those working in vitamins and alternative medicines faced a market slowdown in the face of forthcoming directives to harmonise laws across the European Union.
The Vitamins and Minerals Directive and the Traditional Herbal Medicinal Products Directive, due to be implemented next year, have hit agencies servicing the sector.
'The impact on manufacturers is huge,' says Healthfood Manufacturers Association vice-chairman Martin Last. 'They are required to change the labelling with each new law; and they're not coming in one go. That means short, expensive production runs.'
It is not all bad news though. Healthcare products supplier BR Pharmaceuticals drafted in Beattie Communications to launch a PR offensive for its high-street vitamin and supplement brand Valupak (PRWeek, 20 February) and evening primrose oil and fish oil supplements manufacturer Efamol hired Sheffield-based Dig for Fire PR to raise awareness of the product.
The sector was also buoyant enough last year for the launch of Virgo Health PR in July. But although it projected turnover of £2m for January-December 2004, the agency's joint MD, Sarah Matthew, says the shortage of blockbuster drug launches was a continuing drag on performance.
Despite major marketing initiatives in the erectile dysfunction area from Eli Lilly and GSK, following the success of Pfizer's Viagra, disease-awareness campaigns were less in evidence during the year.
Simultaneously, tighter controls on PR budgets and agency appointments across the pharmaceutical industry made 2003 a challenging year for agency managers. In September, trade association the Healthcare Communications Association's first Benchmarking Survey found that average fee income increases of only three per cent between the two previous years had corresponded with a decrease in operating profit of one per cent. Procurement was identified as the most serious threat to profitability.
MediTech Media chairman and CEO Dr Stephen Cameron says procurement continues to prove a major challenge for healthcare agencies, given the time and cost required to meet the financial standards that assure preferred-supplier status. 'But once the contract is in place, it works in the agency's favour,' says Cameron.
He points out one of the cost-cutting measures deployed by pharmaceutical manufacturers was 'globalisation of their campaigns - leaving only tactical roll-out to local markets', a trend that several market observers agree will continue in 2004.
The consensus on this year is a similar mix of opportunity and challenge.
New account wins in 2004 have included UCB Pharma appointing Athena Medical PR to handle a European and Asia Pacific PR push for Xyzal, its prescription-only medicine for allergies (PRWeek, 16 January), and Reckitt Benckiser taking on hsd communications to promote its constipation brand Fybogel to healthcare professionals (PRWeek, 2 April).
Direct-to-consumer work is expected to increase in 2004, with many products switching from prescription-only to OTC or pharmacy (see box). And as the NHS continues to undergo radical change, agency managers will also be keeping a close eye on the Government's actions.
WINNERS AND LOSERS
The direct-to-consumer area is expected to continue growing this year due to the switch of prescription only medicines (POMs) to pharmacy (P) or general sale list (GSL) status. With the UK's top-selling drug, Merck Sharpe & Dohme's statin Zocor, pending a POM to P switch this year, plus Nurofen Cold and Flu (P to GSL) among six medicines pending, DTC work is tipped to be one of the biggest opportunities for healthcare PR agencies in 2004.
The vitamins/alternative medicines sector has been badly affected by incoming regulations from the European Union. There are presently nine EU directives on labelling of vitamins, minerals and herbal medicines, and because each piece of legislation will come into force at different times over the next two years, the manufacturing industry has been forced to hold back on production and marketing as the regulatory environment settles.
There were no blockbuster drug releases in the UK in 2003, according to IMS Health Consulting Services. A 'blockbuster drug' is one defined as having global sales in excess of £1bn. The total number of New Active Substances (NAS) launched globally in 2003 was 30. This is a 21-year low, and represents a serious threat to the pharmaceutical industry. Of these 30, only five are expected to reach blockbuster status in the next five years, and only two of them were launched in the UK. These were AstraZeneca's statin Crestor, launched in the UK in March 2003, and Abbott Laboratories' rheumatoid arthritis therapy Humira, launched here in the same month.