Introduction

The United States is one of two countries in the world that allows direct-to-consumer (DTC) advertising of prescription drugs (New Zealand is the other). Concerns have been raised that DTC advertising may be harmful to the public. It has been suggested that DTC advertising encourages high usage of prescription drugs before risks, which were not revealed prior to US Food and Drug Association marketing approval, become apparent with widespread use of the drugs after approval. Accordingly, the Institute of Medicine (IOM) has recommended that DTC advertising be prohibited for the first two years after a prescription drug has received FDA marketing approval. The question arises whether the FDA should implement this recommended two-year moratorium.

Background

As its name suggests, DTC advertising is targeted toward consumers as the primary audience. It includes advertisements in magazines, billboards, Internet, radio, and television. The goal of DTC advertising is for consumers to become aware of a product, recognize its benefit(s), and ultimately buy it. The situation with prescription drugs is more complicated because the consumer must not only desire the drug, but he must also convince a physician to write a prescription for the drug and try to convince an insurance company to pay for it. Despite these potential obstacles and the high cost of DTC advertising of prescription drugs, pharmaceutical companies often consider it to be worthwhile. It has been estimated that drug sales increase $4.20 for every $1.00 spent on DTC advertising for prescription drugs.

In the US, no federal law has ever banned DTC advertising of prescription drugs; however, DTC advertising of prescription drugs was relatively uncommon prior to the late 1990s because of substantial restrictions placed on this type of advertising. In 1999, the FDA published a guidance that simplified the requirements for broadcast DTC advertising of drugs and biologics; this led to a boom in DTC advertising of prescription drugs by pharmaceutical companies. Because selling prescription brand-name drugs generates the highest profits for pharmaceutical companies, most DTC advertising is directed toward these drugs, compared to prescription generic drugs or over-the-counter drugs. Furthermore, DTC advertising generally focuses on only a subgroup of prescription brand-name drugs – those prescribed for common conditions – as advertising for these conditions is most likely to influence the greatest number of consumers.

Issue

Should DTC advertising be prohibited for the first two years after a prescription drug has received FDA marketing approval?

Rules

DTC advertising should be prohibited if this moratorium is likely to lead to any of the following:

1. Reduce the number of people exposed to potentially serious risks of prescription drugs

2. Allow physicians to learn more about prescription drugs in the first two years the drugs are sold on the market

3. Reduce the price of prescription drugs

Analysis

Reduce the number of people exposed to potentially serious risks of prescription drugs

A moratorium on DTC advertising of prescription drugs in the first two years of being on the market is likely to reduce the number of people exposed to potentially serious risks of prescription drugs if two conditions are met: 1.) serious adverse events associated with prescription drugs are likely to be detected within the first two years that the drugs are on the market; and 2.) the moratorium reduces the number of individuals using the drugs in the first two years, compared to the number of individuals using the drugs if DTC advertising was permitted.

Detection of serious adverse events in the first two years after marketing approval

Of the 20 drugs withdrawn by the FDA since 1993 because of safety issues, nine were withdrawn after being on the market for less than two years. This suggests that for many drugs, serious adverse events are likely to be detected in the first two years after marketing approval.

Reduction in the number of individuals taking the drugs in the first two years because of the DTC advertising moratorium

It is currently not known if a two-year moratorium on DTC advertising would reduce the number of individuals using the drugs during the first two years after approval, compared to the number of individuals who would be using the drugs if there was no moratorium. If DTC advertising accomplishes its goal of increasing drug sales, then the number of drugs sold during a proposed moratorium would be reduced. However, there is no conclusive evidence to indicate that this would happen. According to a study by the Congressional Budget Office (CBO), the average number of prescriptions written between 1999 and 2008 for drugs with DTC advertising was nine times greater than the number of prescriptions for drugs without DTC advertising. However, as the author(s) correctly note, this does not necessarily mean that DTC advertising actually caused the number of prescriptions to be higher. Instead, it may simply reflect the fact that the pharmaceutical companies focused their advertising on drugs for common conditions, for which there was already a greater number of prescriptions being written because more people have these conditions.

Therefore, although serious adverse events are likely to be detected within the first two years that the drugs are on the market for a substantial number of prescription drugs, it is unknown if prohibiting DTC advertising of prescription drugs in the first two years after FDA marketing approval will reduce the number of individuals taking the drugs during this time. It is thus unclear if a moratorium will lead to a reduction in the number of people exposed to potentially serious risks of prescription drugs.

Allow physicians to learn more about prescription drugs during the first two years the drugs are sold on the market

According to the CBO study discussed above, prohibiting DTC advertising of prescription drugs in the first two years after FDA marketing approval will likely cause the pharmaceutical companies to increase their marketing directed toward physicians, as a replacement for at least some of the loss in DTC advertising. In 2008, DTC advertising comprised approximately one-quarter of the money spent by pharmaceutical companies on promotional activities; the rest was directed toward physicians and other healthcare professionals who prescribe drugs, in the form of “detailing” (visits by drug company representatives), advertising in medical journals, and hosting meetings, conferences, and similar events. Increasing promotional activities toward physicians would provide physicians with the opportunity to learn more about new drugs in the first two years they are sold on the market.

Reduce the price of prescription drugs

It is uncertain whether a moratorium on DTC advertising of prescription drugs in the first two years of being on the market will reduce the price of prescription drugs. DTC advertising is undoubtedly expensive: in 2008, pharmaceutical companies in the US spent an estimated $4.7 billion on DTC advertising for prescription drugs. However, any direct savings that pharmaceutical companies would observe because of the moratorium may be offset by increasing promotional activities to physicians during the two-year moratorium or increasing DTC advertising after the moratorium. Furthermore, even if pharmaceutical companies did experience a net decrease in their expenses because of the moratorium, they would not necessarily pass the savings along to the consumer in the form of reduced prices. As with many products, the price of prescription drugs is influenced largely by the demand for these drugs. The CBO study discussed above concluded that the price of new prescription drugs would generally be reduced only if the moratorium resulted in less demand for the drug. Since the effect of a moratorium on the number of individuals using the drug (ie. “the demand”) is currently unknown, it is likewise uncertain whether a moratorium on DTC advertising of prescription drugs in the first two years of being on the market would reduce the price of prescription drugs.

Conclusion

DTC advertising should be prohibited for the first two years after a drug has received FDA marketing approval because it would likely allow physicians to learn more about prescription drugs during the first two years the drugs are sold on the market. It is uncertain whether this moratorium would also reduce the number of people exposed to potentially serious risks of prescription drugs and/or reduce the price of prescription drugs.

For more information on this issue, contact the Kulkarni Law Firm.