Are Direct-to-Consumer Drug Ads Doomed?

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Further, while a two-year delay wouldn't exactly help struggling media outlets desperate for ad revenue, it shouldn't put them out of business. Swallen figures that if the pharmaceutical moratorium were in place last year, magazines as a group would have lost roughly $210 million, or 0.8% of the approximately $25 billion in total ad revenue it took in for the year. And that's using a worst-case scenario in which the FDA kept all new drugs off the ad market for two years. Similarly, television outlets would have lost some $423 million, or 0.7% of its $60 billion in total ad revenue for the year. (See who's who in Obama's White House.)

Swallen notes that such losses would only last during the first two years of the ban. During that time, new drugs would still receive FDA approval, and consumer advertising could begin once the moratorium is over. "The line would be frozen behind the gate for two years," Swallen says. "But the number of brands waiting in line will grow, and there will be the same flow into the market once the gate reopens. It's a onetime deferral."

Any forced delay would certainly endure a First Amendment challenge. "In free-speech areas, government management of speech, even if it's commercial speech, should always be the last resort," says Billy Tauzin, a former Republican Congressman from Louisiana who now runs Pharmaceutical Research and Manufacturers of America, the industry's trade association. Banning tobacco ads is one thing — cigarettes can kill you. But these are prescription drugs we're talking about. They at least have the potential to save you, right? (See the top 10 video moments of campaign '08.)

Waxman takes a harder stance. "I think the First Amendment is not an absolute guarantee to say whatever [we want] under any circumstances," he says. "We often prevent free speech when it can do harm — such as yelling 'fire' in a crowded theater ... I think there's a balancing. A very limited restriction on the First Amendment right to advertise drugs, if there is such a right, is reasonable for the public safety."

While those tied to the drug industry may disagree, they can take solace in more positive news: Waxman won't police DTC anytime soon. "We've got the stimulus bill with a number of important provisions, and I'd like to get onto the big issue, which is universal health care in this country," says Waxman. "And while we've got to be paying a lot of attention to the FDA in a number of respects, I think the food-safety issue is a lot more important than this one at the moment. So it's just not the highest item on my agenda."

The companies should enjoy this calm, because it likely won't last. The Democrats will get around to the drug companies at some point. And if Congress pushes through a two-year ban, could that set a precedent for further DTC restrictions down the road? Are drug and media companies headed down a slippery slope with Congress? "Give them an inch, they'll take a mile — there's concern about that," Bolling says. "There's no question the Congressmen will take it as far as they can. This is a platform for them. This is, 'I am here to save the American public from these big, bad pharmaceutical companies.' " (Waxman says he does not support a full DTC ban.)

On top of this pressure lies the Obama wild card. The President has said that he wants Medicare to negotiate drug prices directly with drug companies, instead of through managed-care providers. What if the Federal Government reduced its Medicare reimbursements to drug companies who advertise to consumers? Or required them to help fund some kind of public health or education initiative? "The pharmaceutical companies are most nervous about a financial requirement for those who are doing DTC advertising," Bolling says. "It would have companies over a barrel. That's where it's really going to hurt." Things may be quiet on the drug front right now, but with a new Democratic President and Congress in place, Big Pharma should stock up on the painkillers.

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