Healthy Skepticism Library item: 1669

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Direct-to-Consumer Advertising of Pharmaceuticals
2002 Feb 5

Full text:

“Read Two Drug Ads and Call Me in the Morning”- prepublication March edition of State Legislatures magazine

Soaring drug costs have become a matter of concern for lawmakers and their constituents, especially those on fixed incomes. One question is just how much is advertising on television and in the popular press contributing to these increased costs.

At an estimated annual cost of $2.5 billion, pharmaceutical advertising to consumers has indeed made drug companies and their brand products household names.

A new analysis provided by the managed care industry reports that from 1999 to 2000, prescriptions written for the top 50 most heavily advertised drugs rose 24.6 percent, compared to 4.3 percent for all other drugs combined. Drug manufacturing is a $122 billion industry, so a small increase in market share can reflect a multimillion-dollar boost for any particular company.

With pressure to try to curb the increased costs of prescription medicine, lawmakers are taking a closer look at the implications of pricey advertisements on state-funded programs.

Legislative lawyers point out that it is nearly impossible for individual states to control national advertisements, now regulated by the Food and Drug Administration. But this has not prevented some states from seeking solutions. Twelve considered bills regarding direct-to-consumer advertising in 2001, and at least one-West Virginia-enacted a law that gives the director of the West Virginia Public Employees Insurance Agency discretion to use “innovative strategies,” such as requiring prescription drug manufacturers to show how much they’re spending on advertising and what that adds to drug costs.

However the current director, Tom Susman, believes that West Virginia will most likely train a team of pharmacists to meet with and educate doctors about the fiscal impacts of prescribing higher priced and advertised drugs. “The pharmaceutical industry [representatives] don’t talk about costs,” Susman stated, “We go in and educate [doctors] about less expensive and therapeutic equivalent drugs and then they can make decisions to use less costly generics.” Susman added that physicians [who participate in Medicaid] have an incentive to prescribe less costly drugs. “With only so much money to go around and using less expensive drugs, we have more money to put into paying the West Virginia physicians’.”

Several states-such as Florida, Michigan, Oregon and Vermont-are creating drug lists for Medicaid patients that emphasize cheaper generic products over the popular advertised pharmaceuticals.

2001-2002 DTCA State Bills and Laws

Many states have attempted to legislate different aspects of DTCA. This chart summarizes some examples.

State/bill/ web link
yellow = passed Description / excerpts of bill text
(Bill status may change frequently – check state legislatures for most recent actions. In some states special sessions can reconsider bills not passed in a regular session)

CA
SB 1099 If enacted, “No deduction shall be allowed under the law for specified expenses paid or incurred by pharmaceutical manufacturers to advertise the sale, use or consumption of pharmaceuticals.” (1/7/02 First hearing cancelled at request of author; 2/4/02 Returned to Secretary of Senate pursuant to Joint Rule 56.)

CT
H 5607 Part of a larger bill. If enacted would state, “Any manufacturer of pharmaceuticals which were sold in this state during the preceding year shall file a report with the commissioner of consumer protection… shall disclose the total amount of expenses for advertising and promotions of pharmaceuticals in this state and in the US for the preceding year. (1/12/01 Referred to Joint Committee on Human Services Committee; 5/30/01 Tabled for CAL House.)

CT
H 6076 To determine the impact of pharmaceutical companies’ advertising and promotional costs on the price of pharmaceuticals and on practice patterns in CT. If enacted, would “Require all pharmaceutical companies doing business in CT shall provide an annual report …that discloses aggregate advertising costs and by-category promotional costs expended in CT to market pharmaceuticals to health care providers.”

IL
HR 303 Directs the Illinois Health Care Cost Containment Council to conduct a cost/benefit analysis of advertising associated with the provision of prescription drugs to citizens of Illinois by pharmaceutical companies and distributors. (7/2/01, Re-referred to Rules Committeee.)

KY
BR 925(HCR 62)’ 01

BR 433 ’02 Resolution would urge the US Congress, Dept of HHS, FDA to limit, ban or otherwise impose strict standards on DTCA of drugs by pharmaceutical companies. This perhaps effects the physician/patient relationship and quality of care received by patients, and the increasing cost of pharmaceuticals.
(1/8/02, Introduced in House; to Health and Welfare (H) ; 1/23/02, 3rd reading, adopted 93-1 with Committee Substitute; 1/24/02, Received in Senate; 1/29/02, To Judiciary (S))

ME
HP 778 or LD 1022 Act that would require full disclosure of pharmaceutical marketing costs. “A manufacturer, etc. that sells pharmaceuticals in the state shall make available for public inspection all costs associated with marketing the pharmaceuticals including advertising and direct promotion to the physicians including educational programs, samples, and gifts.” (6/11/2001 House Receded and Concurred to Indefinite Postponement of Bill and accompanying papers. (DIED); 6/11/2001 On motion by Senator Mitchell of Penobscot Bill and accompanying papers INDEFINITELY POSTPONED (19-16) in NON-CONCURRENCE Sent down for concurrence Under suspension of the Rules ordered sent forthwith.)

ME
SP 353 or LD 1167 “An Act to disclose Prescription Drug Marketing Activities” This bill would require prescription drug manufacturers, wholesalers and labelers to register persons employed by them to make informational, educational and sales presentations in this State. It requires the reporting of information about those activities. It requires reports of the average wholesale price of certain drugs, the lowest prices for which those drugs were sold and any rebates or discounts applicable to those drugs. It requires certain disclosures for persons making informational, educational and sales presentations. The bill charges the Bureau of Medical Services within the Department of Human Services with implementing the law and provides for public access to nonconfidential information and for an annual report. The bill makes a violation of the registration or the disclosure requirements a civil violation enforceable by the Attorney General. The bill authorizes the Department of Human Services to adopt rules as necessary to implement the law. ( 2/28/2001 Referred to Health and Human Services In concurrence. Ordered sent forthwith. Last Senate Action: 05/21/2001 Pursuant to Joint Rule 310.3 Placed in the Legislative Files (DIED))

MA
S1979 ’01
and S547 If enacted, would be relative to the collection of data relative to direct to consumer advertising.
(7/11/01 S Reported from the committee on Health Care, Accompanied by S547; 7/11/01 Bill reported favorably by committee and referred to the committee on Senate Ways and Means.)

MT
HB 565 Would establish interim committee to study purchasing pools for individuals and small group insurance, provider reimbursement rates and cost shifting of health care costs, access to affordable Rx, strategies to decrease the number of uninsured MT, factors causing health insurance rates to increase above the rate of inflation, and any other issue that the committee or staff deem appropriate and relevant to the problem. (mentions the rising cost of pharmaceuticals perhaps due to advertising that extols the virtues of the newest expensive drugs) (3/24/01, Missed House Deadline for Appropriation Bill Transmittal (DIED).)

NJ
A 3195 ’01

A 1635 ’02 “Prescription Drug Cost Containment Act”

(This is more in regards to grossly unprofessional conduct as a pharmacist or assistant.)

If enacted, it would be concerning the distribution of premiums or rebates by pharmacists in connection with the sale of certain drugs. “Advertising of pharmaceuticals in a manner inconsistent with rules and regulations promulgated by the Dir. of Consumer Affairs. Provided, however, no such advertising of any drug or substance shall be authorized unless the Commissioner of Health shall have determined that such advertising is not harmful to public health, safety and welfare. (1/31/02, Introduced And Referred To Assembly Health and Human Services Committee.)

NM
HJM 20 If enacted, would state, “Whereas the cost of pharmaceutical advertising is $1.8B and growing, be it resolved that the US Congress be urged to review and revise the FDA’s regulations that permit DTCA of pharmaceuticals, revising them to a stricter interpretation of the previous FDA guidelines or a limitation on such advertising … Develop regulations that encourage the pharmaceutical industry to promote its products more responsibly, regulate DTCA more effectively and provide guidance for the medical and public health communities to educate the general public about drug therapies and alternatives in more constructive ways.” (DIED))

NY
A 6219 If enacted, would state, “The manufacturer of a medical device or pharmaceutical that is not reasonably safe due to inadequate warnings or instructions is subject to liability for hard to persons caused by such defect.” In any civil case, the jury will determine whether the warnings supplied by the manufacture were adequate. (1/09/02, Referred to consumer affairs and protection.)

NY
A 6220 Would amend tax law to eliminate the deductibility for certain expenses incurred in the advertising of prescription drugs. “Expenses incurred buy a manufacturer or distributor of a drug, the dispensing of which to a consumer without a prescription is prohibited by either federal or state law, for the advertising of such drug to consumers.” (1/09/02, Referred to ways and means.)

NY
A 8870 Would amend public health law, in relation to requiring a cost/benefit analysis of pharmaceutical advertising and promotional expenses. Must disclose aggregate cost of advertising pharmaceuticals in the media in all formats. (1/09/02, Referred to health.)

NY
S 2722 If enacted, would state, “The manufacturer of a medical device or Rx that is not reasonably safe due to inadequate warnings or instructions is subject to liability for hard to persons caused by such defect.” In any civil case, the jury will determine whether the warnings supplied by the manufacture were adequate. (1/09/02, Referred to consumer protection.)

NY
S 3333 Would amends tax law to eliminate the deductibility for certain expenses incurred in the advertising of prescription drugs. “Expenses incurred buy a manufacturer or distributor of a drug, the dispensing of which to a consumer without a prescription is prohibited by either federal or state law, for the advertising of such drug to consumers.” (1/09/02, Referred to investigations, taxation and government operations.)

PA
S 127 If enacted, would state, “Advertising is making the cost of pharmaceuticals go up” therefore the Health Care Cost Containment Council shall conduct a cost/benefit analysis of advertising and promotional activities associated with the provisions of pharmaceuticals to this Commonwealth’s citizens by pharmaceutical companies and distributors. Disclose aggregate data of all advertising and promotional costs to the councils. Report back to the general assembly. (1/29/01, Referred to public health and welfare.)

TX
HB 915
Rep. Gray Would create a system of bulk purchasing of prescription drugs by state agencies, including Dept. of Health, Mental Health, state employees, retirees, teachers, prison system and any other agency that purchases pharmaceuticals. It would create the Interagency Council on Pharmaceuticals Bulk Purchasing, and would use existing distribution networks. The Council “shall investigate” options of expanding Medicaid purchasing, and using DSH and FQHC facilities. Final version includes provisions for manufacturer and wholesaler price reporting and enforcement powers for the Attorney General.
[fiscal note online estimates savings of $13 million for first two years]
(Amended and passed House, 4/30/01; passed Senate, signed by Governor, 6/15/01

VT
JRH 18 If enacted, would state, “Because of the high costs of pharmaceuticals compared to other countries etc. “Calls upon our congressional delegation to immediately propose and seek passage of legislation that will require any pharmaceutical company which receives or benefits from any federal funding for pharmaceutical research and development to amortize the company’s R&D costs over the entire world market for pharmaceuticals. Would also “Pass legislation that will allow free trade of pharmaceuticals between US and Canada, and propose and pass legislation that will restrain the huge expenditures by pharmaceutical companies on advertising and marketing of their products. (1/17/01, ADOPTED by House, Passed to Senate; 1/17/01 in Health & Welfare.)

VT
JRH 60 If enacted, would send a resolution to the FDA to institute a moratorium on DTCA and urging agency to develop more stringent regulatory restrictions on these promotional activities. (3/13/01 ADOPTED by House, Passed to Senate; 3/14/01, in Health & Welfare.)

VT
S 170 If enacted, would state, “Because a “substantial and significant portion of the pharmaceutical price and cost to the consumer and the state is represented in advertising.” The commissioner of prevention, assistance, transition and health access shall conduct a cost/benefit analysis of advertising and promotional activities associated with the provision of prescription drugs to this state’s citizens by pharmaceutical companies.” Also, they will have to “disclose in aggregate ALL advertising expenses associated with pharmaceutical direct-to-consumer advertising.” (2/27/01, Senate, in Health and Welfare.)

VT
S 178 If enacted, would highlight “cost effective pharmaceutical prescribing practices and counter marketing to DTCA”. Also addresses FQHC, VSCRIPT program. (2/27/01, Senate, in Health and Welfare.)

WA
S 5960 If enacted, would state, “The intent of the Legislature to create an exception to the learned intermediary doctrine for prescription products advertised directly to consumers is stated. The manufacturer of a prescription product that is advertised directly to consumers in this state, who would otherwise be liable for harm caused by the product, is not relieved of that liability solely because the manufacturer warned the practitioner who prescribed the product of its proper use and attendant dangers.” “ This bill would prompt better advertising with clearer, more appropriate direction to consumers.” (Reintroduced 1/14/02, Referred to Health and Long-Term Care Committee 1/16/02)

WV
H 2538 This bill would require DTCA of any pharmaceutical to include the usual and customary price of the drug. (1/09/02, Pending in House GO committee.)

WV
S 127 Allows WV Public Employees Insurance Agency to pursue a multistate buying pool with all state agencies and institutions, as well as “governments of other states and jurisdictions, and “regional or multistate purchasing alliances”. Allows innovative strategies, such as “enacting fair prescription drug pricing policies” and providing discount prices or rebate programs for seniors” and uninsured.
PEIA director’s description.
(Passed House and Senate; signed by Governor 5/15/01 as Chapter 97)

Additional References and Sources