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P E R S P E C T I V E
D T C A D V E R T I S I N G
W E B E X C L U S I V E
28 April 2004
Direct-To-Consumer Drug Advertising:
You Get What You Pay For
A proposal to address consumer
protection and excessive spending
while balancing the commercial right to free speech.
By James M. Jeffords
ABSTRACT:
Between 1997 and 2001 spending on direct-to-consumer (DTC) drug advertising
more than doubled. Opinions differ as to whether and to what extent DTC advertising
benefits the doctor-patient relationship. Some analysts argue that the current
regulatory regime is sufficient, others advocate a stricter enforcement, and
still others promote an outright ban. An alternative may be to use the purchasing
power of the federal government to require the inclusion of comparative quality
data, thus creating a basis for more informed consumer choice. This approach
could create incentives for the pharmaceutical industry to adjust spending on
DTC advertising while avoiding “big government” interference with
commercial free speech.
Few health care issues draw more attention in the U.S. Congress today than the
appropriate role of the federal government with respect to the pharmaceutical
industry, whether that role is as the industry’s regulator or as its principal
customer (in part because of the recent enactment of the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 [P.L. 108-391]). It seems that
each facet of this rocky relationship is steeped in its own controversy and
that in some instances these two roles overlap. The practice of direct-to-consumer
(DTC) drug advertising may be one of those instances.
What is the appropriate role of the federal government with respect to DTC advertising?
Are there conflicts between the government’s responsibility to ensure the
safety and efficacy of medicines and the constitutional protections afforded
to commercial free speech? If change is needed, what might be the most effective,
politically acceptable means for accomplishing it?
The pharmaceutical industry’s increasing use of DTC advertising has generated
considerable interest among health policy experts both within and outside of
government. Research has examined the increasing level of DTC advertising supported
by industry and the purported (good and bad) impact of that activity on consumers’
behavior and health care spending. The research has also generated a range of
opinions as to whether DTC advertising should be allowed and, if so, to what
extent the federal government should regulate it.
The papers by Joel Weissman and colleagues and by Steven Woloshin and colleagues
are important contributions to understanding one of the most vexing issues in
health policy.1 These papers are especially relevant
because they bring a greater understanding of how DTC advertising is perceived
by the two most important participants in this policy debate: the physician
and the patient.
The gist of this debate involves the increase in spending for DTC advertising—from
$1.1 billion in 1997 to about $2.7 billion in 2001— and the effect of that
spending on consumers’ behavior, use of prescription drugs, and costs.2
(The year 1997, not incidentally, coincides with the publication of draft guidance
from the Food and Drug Administration, or FDA, on regulatory requirements for
advertising prescription drugs to the broadcast media. Just one year earlier,
there was little if any high-cost broadcast advertising done.)
Supporters of DTC advertising point to research showing its usefulness as a
means of educating the patient; its contributions to the doctor-patient relationship;
and the beneficial quality outcomes associated with new and, in some cases,
high-priority diagnoses.3 They argue that the FDA’s
existing regulatory regime is sufficient to protect the public health, that
the agency is doing a good job of enforcement, and that the government should
not mandate unnecessary restraints on commercial free speech. Altruism aside,
there seems to be little discussion among supporters about the 21.4 percent
increase in prescriptions dispensed among the most heavily advertised drugs.4
Critics of DTC advertising argue that it leads to inappropriate patient demands
on providers, overuse of prescription drugs, and, in some instances, the increased
demand for expensive “me-too” medicines when less expensive and equally
effective alternatives are available.5 Recommended
solutions to these problems run the gamut from an outright ban on DTC advertising,
to removing business expense tax deductions, to strengthening the FDA’s
oversight capacity. The most ardent critics seem to neglect the constitutional
protections afforded to commercial free speech.
In addition to the accompanying papers, an October 2002 report from the U.S.
General Accounting Office (GAO) provides a useful summary of these points.6
As requesters of that report, my colleagues and I sought to better understand
the role DTC advertising plays in the pharmaceutical marketplace. The GAO was
asked to (1) compare spending by pharmaceutical companies on DTC advertising
with spending on all promotional activities and on research and development,
(2) evaluate the effect of DTC advertising on prescription drug use and spending,
and (3) evaluate the extent and effectiveness of the FDA’s oversight of
DTC advertising since it issued its 1997 draft guidance for broadcast advertisements.
The GAO’s analysis of the first two issues provided information that is
valuable in understanding the economic factors associated with DTC advertising.
It has also contributed to subsequent comparative research and continues to
be cited today. The third inquiry is at the heart of the regulatory enforcement
question of DTC advertising, and the GAO made specific recommendations for strengthening
this aspect of the agency’s mission. Since passage of the Food, Drug, and
Cosmetic Act (FDCA) early in the twentieth century, Congress and the executive
branch have struggled to ensure that the regulatory regime fits the needs of
the public without being unnecessarily burdensome to the pharmaceutical industry.
The goal continues: ensuring that the medicines available to the American public
are safe and effective.
To ensure that claims made in pharmaceutical ads are truthful, the FDA has regulatory
authority through the FDCA to review the accuracy of claims and requires that
they (1) be neither false nor misleading, (2) present a “fair balance”
of information about the risks and benefits of using the drug, (3) contain “facts”
that are “material” to the product’s advertised use, and (4)
in general, include a “brief summary” of every risk from the product’s
approved labeling. These efforts are done principally through the FDA’s
Division of Drug Marketing, Advertising, and Communications (DDMAC).
The GAO found, however, that this division’s oversight of DTC advertising
was limited and that despite the agency’s efforts, “it has not prevented
some pharmaceutical companies from repeatedly disseminating new misleading advertisements
for the same drug.”7 In response, my colleagues
and I wrote to the Department of Health and Human Services (HHS) urging removal
of the existing impediments to enforcement. In June 2002 the FDA announced the
reorganization of the DDMAC; this led to a team-based enforcement approach,
which will focus on DTC advertising materials.
Also in 2002, Congress authorized more than a doubling of the budget available
to the DDMAC in fiscal year 2005 (to $5.5 million), to be used to monitor broadcast
and Internet ads more vigilantly and to ensure that the messages conveyed do
not mislead consumers. Unfortunately, these increased funds have not been requested
by the current administration, and the DDMAC continues to be underfunded. Clearly,
additional congressional oversight is called for.
What, if anything else, should be done beyond the regulatory scope of the federal
government? Beyond its regulatory function, the federal government is a major
purchaser of pharmaceuticals and bears two additional responsibilities. The
first is its fiduciary responsibility to taxpayers to ensure that their tax
dollars are not wasted; the second is to ensure that it does all it can in terms
of safety and quality to leverage its purchasing power on behalf of its employees
and beneficiaries.
Obtaining the “best price” will continue to be an issue with government
purchases of pharmaceuticals. However, given the government’s purchasing
power, the likelihood is that prices it pays will be very competitive. The more
significant potential is the extent to which the government requires, as part
of any purchasing agreement, drug makers to disclose information about safety
and comparable effectiveness as part of their DTC advertising. In addition,
we should better use federally funded research and build upon tools such as
the prescription drug benefit box that Woloshin and colleagues propose.
As this information becomes more widely acknowledged and available, it will
come into greater demand by other purchasers, including self-insured corporations,
labor unions, and state governments. Ultimately it can provide the competitive
edge to those pharmaceutical companies and pharmacy benefit managers (PBMs)
that want to expand their markets.
This mechanism could bring additional information to consumers, and it should
be strengthened. Although this is not the mandatory, regulatory approach some
would advocate, it is an approach that makes sense from a market perspective
and one less likely to be fought by stakeholders opposed to “big government”
incursions on the constitutional right to commercial free speech. With hundreds
of billions of dollars at stake, if the federal government insists that comparative
information useful to the consumer is what it will pay for, then that is what
it will get.
NOTES
1. J.S. Weissman et al., “Physicians Report on Patient
Encounters Involving Direct-to-Consumer Advertising,” Health Affairs,
28 April 2004, content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.219
(28 April 2004); and S. Woloshin et al., “The Value of Benefit Data in
Direct-to-Consumer Drug Ads,” Health Affairs, 28 April 2004,
content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.234
(28 April 2004).
2. U.S. General Accounting Office, Prescription Drugs: FDA
Oversight of Direct to Consumer Advertising Has Limitations, Pub. no. GAO-03-177
(Washington: GAO, October 2002).
3. D.U. Vogt, “Direct-to-Consumer Advertising of Prescription
Drugs,” CRS Report for Congress RL31603 (Washington: Congressional
Research Service, 10 October 2002).
4. Ibid., 2–7.
5. Ibid., 2–7.
6. GAO, Prescription Drugs.
7. Ibid., 4
Read related papers by
Joel Weissman et al., Steven
Woloshin et al., Pat
Kelly, David
Riggs et al., Henry
Waxman, and Peter
Pitts.
Jim Jeffords (I-VT) is currently
serving his third term in the United States Senate. He chaired the Senate Environment
and Public Works Committee from 2001 to 2001 and now serves as the committee's
Ranking Member. Jeffords also is a member of the Finance Committee; Veterans'
Affairs committee; Special Committee on Aging; and Health, Education, Labor,
and Pensions Committee, which he chaired from 1997 to 2001.
DOI: 10.1377/hlthaff.W4.253
©2004 Project HOPE–The People-to-People Health Foundation, Inc.
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