Prescription drug advertising has never had it easy, but lately the $4.3 billion ad sector has come under attack from lawmakers who are trying to get the ads off the airwaves.
Some congressmen are targeting complicated ads that promote a drug to address a malady that you may not know you have. As Washington tries to reach agreement on a sweeping overhaul of health care, direct-to-consumer advertising, or DTC, is being targeted as a contributor to the high cost of health care.
"There are legitimate reasons to criticize DTC, but it doesn't cause problems for pricing, it raises demand," says Bob Ehrlich, CEO of DTC Perspectives, a publishing and consulting company that specializes in DTC marketing. "As a citizen you have to take it for what it's worth. It's advertising. But it's advertising that has to be true."
Nonetheless, lawmakers want to rid the airwaves of them. Rep. James Moran, D-Va., wants them eliminated on the grounds of decency standards. Rep. Henry Waxman, D-Calif., wants drugmakers to refrain from advertising them for a certain period of time after receiving market approval from the Food and Drug Administration. Others, including Rep. Jerrold Nadler, D-N.Y., want to amend the federal tax code to bar pharmaceutical companies from deducting the cost of the ads as a business expense.
Potential legislation comes at a time when the sector has pulled back on spending and faces greater scrutiny from the FDA, which already imposes strong guidelines on what is allowed in the ads. Ad experts say the ads won't disappear because they work, are already regulated and don't add to the cost of health care.
"It's not going to go away but it will continue to change," says Andrew Schirmer, managing director of McCann HumanCare advertising in New York. "And it will continue to be a lightning rod simply because policymakers and their constituents see DTC advertising. It's a misnomer that it is driving the escalation of cost, but it is one that's easy to default to because (the ads are) so visible."
DTC for prescription drugs, down 18% to $4.3 billion in 2008, was still the second-biggest ad spender last year, according to Nielsen. It was second only to autos. The drop was the first since the FDA approved the format in 1997.
Advertising has helped fuel sales. Last year, the top 15 prescription products topped $58 billion in sales, IMS Health says. The industry's biggest seller was Lipitor, with $7.8 billion in sales. Nexium is the second-best at $5.9 billion.
Why DTC ads still stick around:
•They're already regulated. Year to date, the FDA has issued 28% more "warning letters" to drugmakers for false or misleading ads. The number is up because the FDA has more staff reviewing the ads and more drug companies are voluntarily submitting work to make sure the ads meet all the FDA guidelines.
"We are putting more resources into reviewing promotional materials," says Thomas Abrams, director of the FDA's division of drug marketing, advertising and communications. "We try to prevent a misleading message from being disseminated in the first place."