Is TV too high on drug money?
TV execs fear that pharmaceutical makers may curb ads to appease Congress
By Paige Albiniak -- Broadcasting & Cable, 2/24/2002 7:00:00 PM
It didn't take the television industry long to get addicted to nearly $1.5 billion a year in prescription-drug advertising. And now TV and advertising execs worry that what the government gave them five years ago may soon be taken away.
In 1997, the Federal Drug Administration (FDA) changed the rules so that pharmaceutical companies could promote their wares on TV. In 2000, drug companies spent approximately $1.4 billion on TV ads, 60% of the total $2.5 billion spent on "direct-to-consumer" (DTC) prescription-drug advertising, which includes print, radio and billboards. The estimates on TV spending are about the same for 2001, putting prescription-drug makers in the top 20 spenders among TV advertisers. It was a new high: In 1996, those same companies didn't even advertise on TV.
All those drug ads have caught the attention of some members of Congress, and they want to know whether advertising on television is jacking up the cost of prescriptions. With President George W. Bush calling for a prescription-drug benefit for seniors in his State of the Union speech last month and pledging to "give seniors a sound and modern Medicare system that includes coverage for prescription drugs," advertising and pharmaceutical lobbyists are wary that everything pertaining to the cost of prescription drugs will come under scrutiny this year.
Specifically, advertising lobbyists worry that the glare of Congress's spotlight will cause pharmaceutical companies to back off TV advertising, even though the money they spend on it is only 1% to 2% of their total $132 billion in revenue, according to a 2001 study by the National Institute of Health Care Management.
"This is the number-one issue for next year for advertisers and agencies," says John Kamp, of counsel with Washington law firm Wiley, Rein and Fielding and the former head of the American Association of Advertising Agencies (AAAA).
"A number of people in the Congress are asking the question 'Is this kind of advertising building use or demand for prescription drugs and is that, in turn, increasing the cost of prescription drugs?'" says Dick O'Brien, executive vice president of AAAA.
In fact, pharmaceutical companies spend much more money promoting their drugs to doctors than they do on advertising them to the public. In 2000, they spent nearly $4 billion briefing doctors and handed out nearly $8 billion worth of drug samples.
Kamp's and O'Brien's concern is more political than economic. It's not that pharmaceutical companies are spending so much on advertising that Congress will require them to stop, particularly because any such requirement would likely violate the First Amendment. The issue is more like a risk-reward equation: Pharmaceutical companies believe that they have enough on the line as lawmakers look at Medicare reform and prescription-drug benefits; it may be worth their while to back off aggressive TV advertising campaigns so as to avoid attracting lawmakers' further attention.
And because drug companies believe they have only so much political capital to spend this year, they plan to leave the lobbying on advertising to others.
Last summer, after the Senate Subcommittee on Consumer Affairs, Foreign Commerce and Tourism held a hearing on the topic, subcommittee Chairman Sen. Byron Dorgan (D-N.D.) came away convinced that advertising prescription drugs causes little harm, although it may make patients more demanding of their doctors and cause them to want drugs that may not help them.
Opponents say the ads can mislead consumers, who go to their doctors expecting to be prescribed the drug they have just heard about on TV.
One group of naysayers is particularly significant: Some 46% of doctors feel negatively toward the ads, according to a January study by the National Health Council, because they feel "they must devote increasing amounts of scarce time to dissuading patients from taking drugs that advertising led them to believe are right for them, when doctors think otherwise." Furthermore, "some physicians feel they don't have the time required … to reeducate patients who set the agenda with misconceptions gleaned from DTC ads about their diagnosis or which treatment is best for them."
This year, rumors have swirled that Sen. Edward Kennedy (D-Mass.) would hold hearings on the issue, although that now seems unlikely. House Ways and Means Committee Chairman Bill Thomas (R-Calif.) may do so in the House. Nothing is scheduled yet, says a Thomas spokeswoman, but Medicare reform may start heating up in the House in March. Once the issue starts rolling, prescription-drug advertising may just roll along with it, she says.
Last summer, Rep. Pete Stark (D-Calif.) introduced the only bill so far on the issue; it would remove advertising tax deductions for prescription-drug ads that are "unbalanced." To keep the ads balanced, he would require that ads allot equal airtime and volume to describe the benefits and risks of any advertised drug.
"Why should taxpayer funds go to drug companies' questionable advertising techniques that endanger lives and ultimately raise overall health expenditures? By denying tax deductions for unbalanced prescription-drug ads, we may be able to change pharmaceutical-company behavior," Stark said when he introduced the bill.
Lobbyists and others say they aren't worried about Stark's bill because it is blatantly unconstitutional and also because FDA rules already prevent drug companies from running unbalanced ads.
"It's almost impossible to spin the positive information because the FDA regulations are so tight," says John Calfee, Ph.D., a resident scholar with the American Enterprise Institute in Washington. "Drug companies have to provide a lot of information on side effects."
But even this much attention from Congress is enough to put lobbyists on alert. Concern is high enough that the National Association of Broadcasters board of directors discussed the issue at the organization's board meeting in January.
Prescription-drug ads have plenty of defenders, who argue that the commercials bring people in to see their doctors and have discussions about their health, even if those discussions don't result in a prescription.
"Patients have clearly signaled that they want to be empowered and have more knowledge about their treatment options," says Jeff Trewhitt, spokesman at the Pharmaceutical Research and Manufacturers of America. "They want to have some knowledge of what their doctor is talking about."
No related content found.
No Top Articles
Digital Rapids provides market-leading software and hardware solutions, technology and expertise for transforming live and on-demand video to reach wider audiences on the latest viewing platforms more efficiently, more effectively and more profitably. Empowering applications from..more