A decade of Direct-to-Consumer advertising of Prescription Drugs.

Background Evidence suggests that direct-to-consumer advertising of prescription drugs increases pharmaceutical sales and both helps to avert underuse of medicines and leads to potential overuse. Concern about such advertising has increased recently owing to the withdrawal from the market of heavily advertised drugs found to carry serious risks. Moreover, the Food and Drug Administration (FDA) has been criticized for its weak enforcement of laws regulating such advertising.

Methods We examined industry-wide trends in spending by pharmaceutical companies on direct-to-consumer advertising and promotion to physicians during the past decade. We characterized the drugs for which such advertising is used and assessed the timing of advertising after a drug is introduced. Finally, we examined trends in the FDA’s regulation of drug advertising.

Results Total spending on pharmaceutical promotion grew from $11.4 billion in 1996 to $29.9 billion in 2005. Although during that time spending on direct-to-consumer advertising increased by 330%, it made up only 14% of total promotional expenditures in 2005. Direct-to-consumer campaigns generally begin within a year after the approval of a product by the FDA. In the context of regulatory changes requiring legal review before issuing letters, the number of letters sent by the FDA to pharmaceutical manufacturers regarding violations of drug-advertising regulations fell from 142 in 1997 to only 21 in 2006.

Conclusions Spending on direct-to-consumer advertising has continued to increase in recent years in spite of the criticisms leveled against it. Our findings suggest that calls for a moratorium on such advertising for new drugs would represent a dramatic departure from current practices.

It has been 10 years since a change in a policy of the Food and Drug Administration (FDA) allowed direct-to-consumer advertising of prescription drugs on television. Such advertising has been criticized for encouraging inappropriate use of medications and driving up drug spending.1,2 Concern that such advertising may lead to increased use of expensive medications was amplified by the introduction of a prescription-drug benefit in Medicare in 2006 (Part D). Studies of the effect of advertising on prescribing practices have shown that such advertising increases classwide sales, helps to avert underuse of medicines to treat chronic conditions, and leads to some overuse of prescription drugs.3,4,5

Direct-to-consumer advertising has also been controversial in light of postmarketing revelations regarding problems with drug safety. Specifically, clinical trials that are required for drug approval are typically not designed to detect rare but significant adverse effects, and contemporary methods of postmarketing surveillance often fail to connect adverse events that have a high rate of background prevalence with the use of particular drugs. After the market withdrawal of Vioxx (rofecoxib), a drug heavily promoted to consumers,6 critics called for the FDA to place limits on direct-to-consumer advertising, particularly for new drugs,7 a view that was reiterated in a recent report by the Institute of Medicine on the safety of medicines.8

Finally, the Government Accountability Office (GAO)9 and others10 have criticized the FDA’s enforcement of regulations governing direct-to-consumer advertising. Criticism has focused specifically on the adequacy of the FDA’s review of pharmaceutical advertisements, as well as the level and speed of enforcement actions taken subsequent to review.

Since direct-to-consumer advertising has a significant effect on demand for prescription drugs, it is important to understand the evolution of such advertising and its regulation. Although one study reported that spending for such advertising increased by a factor of 3 from 1996 to 2000,11 little is known about trends in spending and other forms of pharmaceutical promotion in recent years. In our study, we examined recent trends in the industry’s use of direct-to-consumer advertising (as opposed to other forms of promotion), assessed the timing of advertising campaigns relative to the introduction of drugs in order to shed light on safety issues, and examined trends in the FDA’s regulation of drug advertising during the past decade.

Industry-Wide Trends in Promotion

Total real spending on promotion grew from $11.4 billion to $29.9 billion from 1996 to 2005, at an average annual rate of 10.6% (Table 1). The percentage of sales spent on promotion for the industry as a whole increased from 14.2% in 1996 to 18.2% in 2005. In the past 9 years, spending on direct-to-consumer advertising and free samples has risen as a share of total promotion, whereas investments in detailing and advertising in professional journals have fallen as a share of the total.

Real spending on direct-to-consumer advertising increased by 330% from 1996 to 2005 (Table 1). After a brief slowdown in spending on advertising in 2000 and 2001, spending grew at an average annual rate of 14.3% from 2002 to 2005. Yet, promotion to professionals still outweighs spending on direct-to-consumer advertising. In 2005, only 14% of total industry expenditures on pharmaceutical promotion were devoted to such advertising.

Role of Advertising for Top-Selling Drugs

In 2005, 8 of the 10 top drug classes in terms of dollar sales had at least one product with advertising spending (Table 2). The importance of direct-to-consumer advertising varied substantially across the top classes. Manufacturers of proton-pump inhibitors, 3-hydroxy-3-methylglutaryl coenzyme A (HMG-CoA) reductase inhibitors (statins), and erythropoietin medications spent 34%, 34%, and 31% of their total marketing budget, respectively, on direct-to-consumer advertising in 2005. The manufacturers of several drugs in these classes invested in advertising campaigns (Table 2). Spending for the advertising of antidepressant agents, seizure-disorder medications, and antipsychotic agents was lower than that for proton-pump inhibitors, statins, and erythropoietin medications as a proportion of the total marketing budget. The remaining 4 of the top 10 drug classes placed little emphasis on consumers in their promotional strategies. None of the angiotensin II antagonists used direct-to-consumer advertising in 2005. Among manufacturers of calcium-channel blockers, only non–product-specific or “disease awareness” ads were purchased. In 2005, manufacturers used direct-to-consumer advertising for only one of the cyclooxygenase-2 inhibitors (of which celecoxib was the only remaining product) and one of the angiotensin-converting–enzyme inhibitors. Since data on the retail value of free samples that are dispensed for these drug classes were not available, the overall promotion-to-sales ratios probably provide a conservative estimate.

Level and Timing of Expenditures

Spending on direct-to-consumer advertising continued to be concentrated among a relatively small number of brands. The 20 drugs with the highest spending made up 54.4% of total industry spending on advertising in 2005 (Table 3). Drugs that are advertised to consumers are predominantly new drugs used to treat chronic conditions. Ten of the top 20 drugs, as ranked by advertising spending, were introduced in 2000 or later. Notably, nearly all (17 of 20) advertising campaigns for the most heavily advertised drugs began within a year after FDA approval of the drug.

FDA Enforcement of Regulations

The number of letters sent by the FDA to pharmaceutical manufacturers notifying them that they had violated regulations for prescription-drug advertising fell from 142 in 1997 to only 21 in 2006 (Figure 1). During the same period, the proportion of promotion-related regulatory letters citing problems with direct-to-consumer advertisements (as opposed to promotional material aimed at health professionals) increased from 15.5% of all letters in 1997 to 33.3% in 2006. And during the years 2003–2004, nearly half of the FDA’s promotion-related regulatory letters were focused on direct-to-consumer advertisements. From 1997 to 2006, nearly 84% of regulatory letters regarding direct-to-consumer advertising cited advertisements for either minimizing risks (e.g., minimizing or omitting information on side effects), exaggerating effectiveness (e.g., portraying the indication too broadly or making unsubstantiated claims of superiority over other drugs), or both.

For example, the FDA found that Eli Lilly’s television broadcast advertisement for Strattera (atomoxetine) was false or misleading because it inadequately communicated the indication for the drug (attention-deficit–hyperactivity disorder) by means of competing visuals, graphics, and music presented concurrently. Similarly, serious risk disclosures were minimized for Strattera, the FDA said, by the distracting visuals and graphics (e.g., erratic camera movement, quick scene changes, and visual changes in point of view). In another case, the FDA said Pfizer’s print advertisement for Zoloft (sertraline) was false or misleading because it omitted important information relating to the risk of suicidality in patients, a risk stated on the product’s label at the time the advertisement ran.

Discussion

Spending on direct-to-consumer advertising has continued to increase recently in absolute terms and as a percentage of pharmaceutical sales in spite of pressure on manufacturers to curtail such advertising.8 Promotion to physicians continues to be the dominant marketing strategy, but there are some drugs in a majority of the top-selling classes that are promoted by such advertising. Driven by increases in direct-to-consumer advertising, total promotion as a percentage of sales has increased substantially during the past 5 years, leading some observers to worry that consumers must bear these increased costs in the form of higher prices. Economic theory and evidence suggest that changes in marketing costs are unlikely to have a direct effect on pharmaceutical prices, which largely reflect perceptions of product value held by consumers, physicians, and payers.17 Of course, it is possible that advertising reduces the price responsiveness of demand and thus leads manufacturers to increase prices, but the empirical evidence on this point is mixed.18,19

Advertising campaigns generally begin within a year after the introduction of a pharmaceutical product, which raises questions about the extent to which advertising increases the use of drugs with unknown safety profiles. At least one pharmaceutical manufacturer (Bristol-Myers Squibb) recently announced a voluntary moratorium on direct-to-consumer advertising for drugs in the first year after FDA approval. And PhRMA, the industry trade group, has recommended that manufacturers delay such campaigns for new drugs until after health professionals have been sufficiently educated, although no details have been provided on how long a period was deemed necessary.20 Finally, in a recent study of drug safety, the Institute of Medicine recommended that the FDA restrict advertising for newer prescription drugs.8 Our data show that a mandatory waiting period on advertising for new drugs would represent a dramatic departure from current industry practices.

The number of regulatory actions taken by the FDA against companies marketing prescription drugs to consumers has fallen dramatically in recent years. This decline may reflect either better industry compliance with advertising regulations or a worsening of FDA oversight.21 Although a systematic assessment of the compliance of pharmaceutical advertisers with advertising regulations is beyond the scope of this article, some insights into this issue can be gained from examination of policy changes and staffing levels within the FDA over the period of our study. Three observations from such an examination suggest that the FDA’s capacity to enforce advertising regulations has weakened in recent years.

First, in 2002 the Secretary of Health and Human Services began requiring that all draft FDA regulatory letters, including letters related to advertising violations, be reviewed and approved by the FDA’s Office of Chief Counsel before they are issued. A GAO report found that this legal review has led to a reduction in the number of letters issued, as well as to delays such that FDA warning letters are frequently sent out long after the false or misleading advertising campaign has run its course.22 Notably, the number of regulatory letters sent by the FDA in 2002 was less than half that in 2001 (28 vs. 68) (Figure 1).

A second indication of weakening FDA oversight of direct-to-consumer advertising in recent years is that the number of staff members who are dedicated to reviewing advertisements has remained relatively stable, whereas the use of such advertising has grown substantially. In 2002, three FDA staff members were dedicated to reviewing direct-to-consumer advertisements.22 In 2004, four staffers were reviewing such advertisements, even though spending on this form of advertising (and probably the volume of ads to review) had increased by 45%, from $2.9 billion to $4.2 billion (Table 1).23

Finally, consistent with the hypothesis that staffing has not kept pace with the number of prescription-drug advertisements, the proportion of broadcast advertisements that underwent FDA review before airing declined from 64% in 1999 to only 32% in 2004.23 Thus, even if manufacturers were to increase submission of advertisements to the FDA, the agency has said that “current FDA resourcing for this work would probably result in delayed reviews . . . and discourage [manufacturers] from submitting the materials for prior FDA review.”23

Our study has some key limitations. We obtained data on industry sales from PhRMA, which includes in its annual reports sales data only for its members. Ideally, we would include sales of all branded drugs sold by prescription, including pharmaceutical and biologic agents, and exclude sales of generic drugs (because generic drugs typically are not promoted). PhRMA sales data may include some generic sales (if a member reports both branded and generic sales) and typically exclude sales of biologic agents, which are manufactured by companies that belong to another trade group (Biotechnology Industry Organization). As a result, the sales figures may underestimate total dollar sales for the industry. We provide data on spending on free samples valued at their approximate retail price, which is how they typically are valued in industry promotional audits. Thus, the value of free samples we present probably overstates the opportunity cost to manufacturers, which would lie somewhere between the marginal cost of production and the retail value.

Since 2000, direct-to-consumer advertising of prescription drugs has continued to grow both in absolute dollars and relative to other forms of promotion. Although the evidence base is growing, there are few data to support an assessment of the balance of the costs and benefits of such advertising.24 The debate over whether and how direct-to-consumer advertising should be more tightly regulated takes place against a backdrop of growing concern about the growth of health care spending, particularly in the Medicare program. Gaining a better understanding of the effects of direct-to-consumer advertising for prescription drugs has important public health implications not only for the United States and New Zealand, where such advertising is also permitted, but also for Canada and the European Union, where such advertising is banned but has been subject to recent challenge.25,26

By Julie M. Donohue, Ph.D., Marisa Cevasco, B.A., and Meredith B. Rosenthal, Ph.D.

To view charts CLICK above on ‘More Images’.

Source Information

From the Department of Health Policy and Management, University of Pittsburgh Graduate School of Public Health, Pittsburgh (J.M.D.); the Department of Health Policy and Management, Harvard School of Public Health, Boston (M.C., M.B.R.); and Vanderbilt School of Medicine, Nashville (M.C.).

Address reprint requests to Dr. Donohue at the Department of Health Policy and Management, University of Pittsburgh Graduate School of Public Health, Crabtree Hall A613, 130 DeSoto St., Pittsburgh, PA 15261, or at jd******@**tt.edu.

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