Xpectives News

DTC in Perspective: Celebrating DTC Success While Defending It

March 11, 2016 by Bob Ehrlich0
Last week I wrote about the recovery in DTC spending in 2015. That should have been a happy event and one we all should have celebrated. Yet, another anti-DTC bill emerged in the Senate, sponsored by Al Franken and three other Democrats. This bill calls for ending the tax deductibility of advertising.
The bill will probably go nowhere based on constitutional free speech issues. Putting barriers on commercial speech uniquely for drug companies will fail. What industry will be next? Politicians do not like a lot of industries and why not limit those tax deductions as well? We know they dislike health insurance companies, gun companies, video game makers, tobacco producers, liquor companies among others.

Bob Ehrlich
“Let’s err on the side of more not less information.”
-Bob Ehrlich

What drug company executives have realized is that DTC is only one of many things critics hate about them. They know that if they stopped doing DTC to appease Al Franken, then he would still demand European prices, shorter patents, less detailing and sampling, and less tolerance for side effects. Therefore, drug makers have gone all in on DTC. They recognize that offering to give up their right to advertise a lawful product serves no purpose.

What politicians seem to think is that a public denied information is better served. They want an ignorant public because then they can influence providers and payers to avoid higher priced drugs. I have absolutely no problem with government and insurers offering effectiveness and price/value data to the public. An advertised drug may in fact not be better than a generic or non-drug alternative. Insurance companies, drug critics, government, and consumer watchdog groups are all free run counter advertising to drug ads with information on drug effectiveness, cost, and safety.

Instead politicians like Franken make the mistake of thinking the consumer is too ignorant to understand drug selection. It is a scary thought that FDA vetted advertising claims are considered dangerous and must be stopped. The rationale that $5 billion of advertising is too much in an industry that has $374 billion in sales is shaky logic. There is no impact on drug prices resulting from advertising. Advertising creates competition and consumer and doctor awareness of competing brands keeps price competition alive. Banning advertising means established brands face no DTC challenges from newcomers. Advertising certainly speeds up adoption as providers are pressured to learn about newly advertised drugs.

The drug industry cites numerous studies about advertising causing more diagnosis of disease earlier. That is a very positive benefit. Drug companies should not be afraid to also say they advertise to sell more drugs. That ability to advertise gives drug companies incentive to speed up drug development knowing they can tell the world through mass communication what they have discovered.

I know Sanders, Clinton and Franken would prefer some all knowing government agency overseeing drug development, testing, selection, and pricing. In that world of central planning, we as consumers, would have no say in drug selection. Advertising is just one source of consumer information and is of course designed to create brand requests. That is why the FDA reviews the ads for accuracy and why there are hundreds of health web sites to offer reviews of those drugs. Let’s err on the side of more not less information.

While consumers may complain about drug ads most learn about new drugs from advertising and I doubt they want to go back to the pre-1997 era. FDA is planning its first comprehensive consumer attitude survey since 2002 and I welcome that study. That could be fielded in late 2016, or 2017 as FDA moves at a government agency pace.

At the DTC National this April we will be discussing what the drug industry should do to respond to the latest threats and how marketers can influence public policy. Drug makers need to carefully balance the public concern while maintaining their right to advertise.


Bob Ehrlich

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