Are Direct-to-Consumer Drug Ads Doomed?

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How much longer will you be able to see advertisements in which a person blissfully runs through a field after taking some kind of antiallergy medication? Or those in which a down-and-out man is suddenly sunny after being prescribed an antidepressant? How much longer will you giggle at that commercial with the warning that you should call a doctor if a certain condition lasts more than four hours? (See the best and worst Super Bowl commercials of 2009.)

These are questions that keep drug companies, as well as the television stations and magazines that subsist on their ad dollars, up at night (Ambien, anyone?). Direct-to-consumer (DTC) advertising by pharmaceutical companies has always been somewhat controversial. The U.S. is one of only two countries that permit it (New Zealand is the other). Critics claim that these advertisements encourage consumers to seek out overly expensive brand-name drugs from doctors. Their symptoms might not require such medications, and when they do, cheaper generic drugs may be available. Such marketing probably drives up overall health-care costs. More important, new drugs that are aggressively marketed can pose a safety risk. Merck's heavy promotion of pain reliever Vioxx — look at Dorothy Hamill skating without any strain! — is a prime example of advertising gone awry. The drug was later taken off the market after it was found to increase risk for heart attacks.

So with a new President who has vowed to fight Big Pharma to lower drug costs and a Democratic Congress with several anti-DTC advocates, drug and media companies are justifiably jittery. "We are entering an environment that is going to be more open to those who are adamantly opposed to direct-to-consumer advertising," says Jay Bolling, president of Roska Healthcare Advertising in Montgomery, Pa. (See the top 10 TV ads of 2008.)

However, perhaps the companies shouldn't freak out — yet. The DTC issue has not been floated as an early White House priority; it is unlikely to be dealt with until weeks or months after Obama names a nominee for FDA commissioner, an announcement that could come within days. Plus, some of DTC's most vocal critics in Congress aren't calling for an all-out advertising ban. For example, Democratic Representative Bart Stupak of Michigan, chairman of the House Energy and Commerce Subcommittee on Oversight and Investigations, wants a moratorium on DTC ads during a drug's first two years on the market. "Two years will give the FDA and doctors time to see what safety issues arise once a drug is approved," Stupak says. "It will also allow adequate time to educate doctors on how to use the new drug."

The true power player in the full House Energy and Commerce Committee, chairman Henry Waxman of California, differs from Stupak one key point. Yes, he also supports a two-year DTC moratorium for new drugs. "Americans must face an inconvenient truth about drug safety," he says. "The truth is that we inevitably allow drugs on the market whose risks are not fully known." Waxman, however, insists that the FDA should have the discretion to make exceptions to the moratorium. This policy follows a recommendation that the Institute of Medicine offered in a 2006 report, "The Future of Drug Safety." "It doesn't have to be a full two years," Waxman says. "It's allowed to be limited to drugs that the FDA thinks might be a safety problem." Big Pharma certainly appreciates this less aggressive approach. (See the top 10 campaign ads of all time.)

A two-year ban on new-drug marketing could hurt the bottom line of drug companies. But it wouldn't be devastating. "I don't think it will have a particularly big impact," says Eric Schmidt, equity analyst at Cowen and Co., an investment bank. "The companies have already started scaling back their marketing budgets, and they've tended to direct advertising into more established brands." According to Jon Swallen, a research analyst at TNS Media Intelligence, pharmaceutical companies spent about $4.7 billion in magazine and television advertising in 2008, a 10.7% drop from 2007. And only about 15% of DTC ads are for drugs that are less than a year old.

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