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Direct-to-consumer advertising in the United States

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The United States is one of only two developed countries that allows direct-to-consumer advertising (DTCA) of prescription drugs. (The other country is New Zealand).

A November 2006 report by the U.S. Government Accountability Office report stated that drug companies spent $4.2 billion in 2005 on DTCA. In comparison the drug industry spent $7.2 billion in 2005 promoting drugs to physicians and $31.4 billion on research and development. However, the GAO found that the amount spent on DTCA "increased twice as fast from 1997 through 2005 as spending on promotion to physicians or on research and development." [1] It estimated that spending on DTCA was growing at approximately 20% per year.

In his book, Overdosed America, Dr. John Abramson noted that the "1997 change [in DTCA laws] unleashed an unprecedented onslaught of commercials. By 1999, the average American was exposed to nine prescription drug advertisements on television every day. The number of television ads increased 40-fold between 1994 and 2000." [1]

Spending on DTCA 1997-2005

Table 1: Prescription Drug Promotion and Research and Development, 1997-2005. (Source: U.S. Government Accountability Office, Prescription Drugs: Improvements Needed in FDA's Oversight of Direct-to-Consumer Advertising', GAO report Number GAO-07-54, December 14, 2006.

All figures in Billions

Year Spending on DTC advertising Spending on promotion to physicians Retail value of samples Research & Development
1997 $1.1 $3.9 $6.0 $15.5
1998 $1.3 $4.6 $6.6 $17.1
1999 $1.8 $4.8 $7.2 $18.5
2000 $2.5 $5.6 $8.5 $21.4
2001 $2.7 $5.9 $10.5 $23.5
2002 $2.6 $6.6 $11.9 $25.7
2003 $3.3 $7.4 $13.5 $27.1
2004 $4.0 $7.8 $15.9 $29.8
2005 $4.2 $7.2 not available $31.4
Average annual percentage increase 19.6 9.0 14.9 9.3
Total percentage increase, 1997-2005 296.4 86.0 162.4 103.3

Top DTCA Drugs

In 2005 the drugs that were the most heavily promoted were

DTC under pressure in the US

In the wake of controversy over the safety effects of drugs such as Vioxx and the rapidly escalating expenditure, the drug industry DTC advertising came in for criticism. U.S. Senate Majority Leader Bill Frist called drug ads "fuel to America's skyrocketing drug costs" and asked companies to wait two years before advertising new drugs. In a move to pre-empt any regulatory restrictions on DTC Bristol-Myers Squibb set its own one-year moratorium on new drug ads.

Legislation with bipartisan support would create a new office within the Food and Drug Administration to "evaluate advertisements for new drugs and high-risk drugs and treatments." The American Medical Association is studying whether drug ads lead to "unnecessary prescriptions and higher health costs." [3] All this, the Wall Street Journal reported, has the pharmaceutical industry "scrambling to respond." The lobby group Pharmaceutical Research and Manufacturers of America is "drafting new guidelines." Drug ads should "include a greater discussion of the risks," admitted PhRMA vice-president Ken Johnson. But if restrictions are placed on drug ads, "you'll probably see maybe more public relations" targeted to doctors, predicted Ogilvy & Mather's Michael Guarini. [4]

In August 2005 Mediaweek reported that new voluntary guidelines issued by the Pharmaceutical Research Manufacturers of America (PhRMA) on Direct-to-consumer advertising "contain few requirements that will add to marketers' ethical and legal burdens in creating drug ads." The guidelines, it reports "do little to go beyond a press release PhRMA issued on July 21, which merely 'encouraged' the industry to better target its audience". Nor do they contain any penalty or enforcement provisions. According to the Wall Street Journal, PhRMA's attempt to pre-empt a review of the ads by the Food and Drug Administration seems doomed to fail. In June former Republican congressmen and now PhRMA president Billy Tauzin told Brandweek that he opposed prohibiting companies from some forms of promotion as "we're in a free speech area…to me that's a human rights abuse" if the rules were to prohibit companies from certain types of communications, he said. [5]

The Food and Drug Administration will hold a public hearing on direct-to-consumer (DTC) drug advertising, "more than two years after the last public hearing ... failed to produce any guidelines to regulate the $4 billion ad category," notes AdAge. In announcing the November 1 and 2, 2005 meeting in Washington, DC, the FDA said it "believes the agency, the industry and other members of the public now have enough experience with DTC promotion to understand what regulatory issues may need to be addressed." [6]

Of particular interest are celebrity endorsements, since "such approaches plainly do not reflect a data-oriented approach to promotion." The agency will also ask "whether and how techniques mislead consumers about the risk-benefit tradeoffs" of advertised drugs. [7]

In August 2005, the Pharmaceutical Research and Manufacturers of America established their own voluntary DTC guidelines. A PhRMA spokesperson said the industry group will speak at the FDA hearing.

In an interview with the New York Times discussing corporate social responsibility, the CEO of Pfizer Hank McKinnell attributed part of the unpopularity of the drug industry to DTC advertising. "One factor was our direct-to consumer advertising. We didn’t do enough to strengthen and reinforce the importance of the doctor-patient relationship. It was a consequence of our success that we created visibility for products and many people in the public said, 'That would be nice, but we can’t afford it'," he said. [8]

In August 2007, the U.S. Food and Drug Administration announced it will study whether direct-to-consumer drug ads "distract consumers from carefully considering and encoding risk information," reported the Associated Press. The agency will look at "how images used in ads affect consumers" and "how text on the screen can focus or divert attention from audio warnings." The FDA is concerned that "relaxing, upbeat images" and "text directing viewers to company Web sites or magazine advertisements" may distract viewers from "important audio about side effects." [9]

FDA monitoring of drug ads has drastically decreased, according to an August 2007 study in the New England Journal of Medicine. The agency issued 21 citations in 2006, compared to 142 sent in 1997, according to the study. [10] "During the same period, drug industry spending on such advertising soared 330 percent, to $29.9 billion in 2005," AP noted. [11]

SourceWatch Resources

DTCA Specific Articles

Other Links

References

  1. Dr. John Abramson, Overdosed America: The Broken Promise of American Medicine, HarperCollins, September 2004, p. 152.

External links

U.S. Government Accountability Office Reports on DTCA Advertising

U.S. FDA Reports

Academic Papers

Drug Industry Statements, Reports & Guidelines

General Articles