On May 26, the Congressional Budget Office ("CBO") released an Economic and Budget Issue Brief entitled, "Potential Effects of a Ban on Direct-to Consumer Advertising of New Prescription Drugs". The Brief aims to draw on data documenting direct-to-consumer ("DTC") advertising and other promotional materials activities for pharmaceutical products and how this affects the market for drugs. For the Brief, CBO analyzed data from SDI and IMS Health--two companies that collect and sell information on the pharmaceutical industry and sales--academic research on advertising prescription drugs, focusing on the 1999-2008 timeframe.
SInce FDA issued new guidelines in 1999 for DTC advertising, concern has raised in Congress and elsewhere that DTC advertising drives consumers to seek new medical therapies before they are well proven or their risks are fully discovered. The concerns have led to recent proposals for a moratorium on DTC advertising during the first two years of FDA approval. Others have questioned whether a ban would be contrary to the public health by making consumers unaware of new medical therapies as they become available for commercial use. Congress has considered but never adopted bills in recent years that would have limited DTC advertising in the first two to three years or otherwise limited DTC advertising.
The Brief concludes that a two-year moratorium would cause:
- Drug manufacturers to expand marketing to physicians for at least some of the banned advertising to consumers.
- The number of prescription drugs filled for some products would decrease for some drugs but others would stay the same due to substitution for other types of promotion and other factors that affect new prescription drug use.
- The change in price for new drugs would likely be minimal given that the effects on prescription drugs prescribed would be expected to be limited.
The Brief reviews how FDA's new guidelines caused many pharmaceutical manufacturers to increase their purchased television and radio air time, as well as magazine and newspaper space, to make consumers aware of newly-approved drugs sooner, hoping consumers would then ask their doctors to prescribe the new therapies. The CBO found that while DTC advertising went up, most of the advertising money spent was spent to "detail' drugs at physicians' offices, where manufacturers left samples, medical literature reprints, and other promotional materials. These increased expenditures led policymakers to question whether detailing and other advertising encouraged physicians to overprescribe new drugs that had higher cost but little benefit over existing therapies or possibly as yet unknown safety concerns.
CBO found that while DTC advertising may prompt consumers to ask physicians about new prescription drug products, physicians still control whether consumers obtain access to the new therapies. This explains why most advertising is not DTC. CBO found that from 1998 to 2008, of the 366 drugs reviewed, only 73 included DTC advertising. Of the 73 drugs, pharmaceutical manufacturers spent $71 million per drug during the first two years since approval. About $54 million per drug was spent to promote the larger set of drugs and of this amount, the lion's share went to detailing-- $46 million. Complicating this analysis was that most DTC advertising is for drugs that would already be expected to have larger markets, i.e., manufacturers are unlikely to spend DTC advertising dollars for drugs to treat rare diseases. CBO concludes with an ambivalent public health analysis: on the one hand, DTC marketing may lead to increased sales for a subset of newly-approved drugs but without it, there may be delayed use of new valuable medicines.
So what exactly is the take-away? Congress will be hard pressed to use this CBO Brief to support a moratorium on DTC advertising but should perhaps examine more the effect of detailing on prescription drug use.
