Direct-to-consumer advertising in the U.S. pharma industry: recent developments and key stakeholder positions. Part one of a two-part series.
With key stakeholders and regulatory heavy-hitters weighing in on both sides of the debate, life science information, regulatory and competitive intelligence professionals will benefit from a review of major issues and developments. Here, we will provide key background and updates on this important topic. The debate about direct-to-consumer (DTC) pharmaceutical advertising has been percolating for some time, but several recent developments have brought the issue to the forefront. The stakes are high, the stakeholders highly invested, as a number of critical issues coalesce into this lightning-rod topic: patient-physician relations; drug pricing; beliefs about the nature and necessity of capitalism and its role in healthcare; billions of dollars in R&D, marketing, and potential profits; not to mention the potentially life-saving treatments and care that stand at the center of it all.
This debate is unique to the U.S. pharmaceutical market, where significant financial investment and complex regulatory oversight create a complicated battleground. (Only one other country, New Zealand, allows DTC pharmaceutical advertising.) Pharma spent $5.17 billion on DTC ads in 2015, a 14.9% increase over 2014’s totals, according to FiercePharma. At such high levels of investment, it is clear that pharma industry insiders will be deeply affected by any major developments.
Stakeholder Positions on Direct-to-Consumer Advertising
In November 2015, the AMA issued a press release calling for a ban on direct-to-consumer advertising of prescription drugs and medical devices. According to the release, physicians at the Interim Meeting of the AMA voted “in support of an advertising ban,” a move that “reflects concerns among physicians about the negative impact of commercially-driven promotions, and the role that marketing costs play in fueling escalating drug prices. … Direct-to-consumer advertising also inflates demand for new and more expensive drugs, even when these drugs may not be appropriate.” The call for an advertising ban came alongside other measures outlined at the meeting, including a physician task force and advocacy campaign aimed at addressing drug costs, and a call to monitor the pharmaceutical marketplace, mergers and acquisitions.
More recently, a second physician group has spoken out against DTC ads. In March 2016, the American College of Physicians (ACP) released a piece in the Annals of Internal Medicine, Stemming the Escalating Cost of Prescription Drugs: A Position Paper of the American College of Physicians. Though the primary focus of the paper is, clearly, prescription drug costs, the ACP directly addresses direct-to-consumer advertising in its discussion, noting that marketing costs outpace drug R&D spending for many drug companies. The ACP goes on to call DTC advertising “concerning” and “inappropriate because it may undermine the patient-physician relationship and cause confusion.” The ACP does not make a direct call for a ban, as the AMA did, instead stating that in the “absence of a ban on DTC advertising, ACP supports broad efforts by federal regulators to ensure that information about a drug’s effectiveness and safety, and about alternative treatments, is clearly disclosed to patients.” Further discussion of the ACP paper can be found via the Coalition for Healthcare Communication.
Stakeholders Oppose Banning DTC Advertising
Drug makers and other pharmaceutical industry stakeholders oppose efforts to ban DTC advertising. Several industry groups have spoken out against the bans and in favor of direct engagement with consumers.
Following the AMA’s calls to ban DTC pharmaceutical advertising, the Association of National Advertisers (ANA) released a statement calling the proposal “wrong and misguided.” In a follow-up interview with PharmPro, ANA’s Dan Jaffe discussed his organization’s position in more detail and made clear that the ANA “do[es] not believe prescription drug advertising is a driver of increased drug or medical costs in the U.S.”
Pharmaceutical Research and Manufacturers of America, or PhRMA, also takes a pro-DTC-ad stance. PhRMA’s Direct to Consumer Pharmaceutical Advertising page outlines its basic position and provides links to various resources, including the PhRMA Guiding Principles: Direct to Consumer Advertising about Prescription Medicines. According to the Guiding Principles, PhRMA believes that “DTC communications about prescription medicines serve the public health” by increasing awareness, educating patients about treatment options, motivating patients to contact and engage with their physicians, increasing the likelihood that patients will receive appropriate care, and encouraging compliance with prescription drug treatment. The PhRMA statement also outlines communications guidelines designed to ensure compliance with FDA regulations. PhRMA’s fact sheet about marketing and promotion outlines research and statistics that support its pro-ad position.
Analysis of Direct-to-Consumer Advertising in the U.S.
Responses to the debate over DTC advertising have been mixed, with stakeholders from all sides weighing in. In a Pharmalot column at STAT, Ed Silverman analyzed the proposed ban and examined the various tactics that could be used to realize the AMA’s ad-free dream. Silverman ultimately concluded that the ban is a “dead end,” not least because a new federal law would be required to put such a measure into effect, but he noted that compromise between the AMA and drug makers would likely yield more positive results. Medical Marketing & Media provides additional discussion of the proposed ban.
A New York Times analysis published last month breaks down pros, cons and key statistics. Drug advertising is both costly and ubiquitous, with 80 drug ads per hour airing on American television and billions of dollars spent on DTC advertising each year. And while, as expected, drug ads increase sales, particularly of the promoted drug, the piece teases out a more nuanced picture of DTC advertising. Drug advertisements increase sales of other, nonadvertised drugs, and may serve to normalize stigmatized conditions like depression. Doctors benefit from consumer ads via increased physician visits, and patients may be more likely to comply with prescription drug treatment as a result of advertising. The piece also cites a lack of consistent evidence that ads lead to higher drug prices.
A recent Adweek article looks at the debate over DTC advertising in light of a larger pharmaceutical industry struggle to fight PR problems and restore a positive reputation. The piece examines the history of DTC advertising and major legislative and regulatory developments, as well as providing industry perspectives and revenue analysis.
Michael Sinkinson and Amanda Starc, researchers from the University of Pennsylvania’s Wharton School, discussed the likely implications of a ban on DTC advertising of prescription drugs in a 2015 paper, Ask Your Doctor? Direct-to-Consumer Advertising of Pharmaceuticals. The study found evidence of “business stealing effects among branded, advertised drugs,” as well as “positive spillovers from drug advertisements to non-advertised competitors in the same class.” The paper examines pros and cons of advertising and discusses impacts on profits for advertisers. Additional discussion of the paper can be found via this Knowledge@Wharton article, which includes a podcast link.
The Xtalks Vitals life science blog provides a three-sided examination of the issue, considering doctor, patient and pharma perspectives on the effects of DTC advertising. U.S. News & World Report offers a consumer-focused primer that encourages readers to remain skeptical and to seek multiple sources of information.