the other drug war [home]

Pros and Cons of Drug Advertising and Marketing
Most countries don't allow drug companies to advertise directly to patients. In the U.S., however, the rules were relaxed in 1997 and drug companies no longer had to include warnings about symptoms and side effects, which are required in ads to doctors. Since then, direct-to-consumer television, radio and magazine advertising has increased faster than the industry's other marketing activities -- the bulk of which are still aimed at doctors who have the power to prescribe.

Commenting on the debate over drug ads and marketing are: Sidney Taurel, chairman, president and CEO of Eli Lilly; Uwe Reinhardt, an economist who specializes in health issues; Marcia Angell, former editor in chief, The New England Journal of Medicine; Richard T. Evans, pharmaceutical analyst, Sanford C. Bernstein & Co.; and John Kitzhaber, former governor of Oregon.

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Sidney Taurel
Chairman, president and CEO, Eli Lilly

As to direct-to-consumer advertising [DTC], first of all, I'd like to put things in perspective. I think there has been a criticism of the industry that we are spending more on DTC than we do on the rest of marketing, or more importantly, on R&D. In fact, in 2001, the total expenses for direct-to-consumer advertising was $2.4 billion for the whole industry, versus $30 billion on R&D.

I think direct-to-consumer advertising has some very important public health benefits. One is you can see for the majority of the products which are advertised that they deal with conditions which, according to medical experts and the data available, are under-treated -- diseases such as depression, such as diabetes, such as hypertension, such as high cholesterol. All of these areas are today under-treated, and direct-to-consumer advertising helps educate patients and bring them to the doctor's office. The most expensive disease is the one which is not diagnosed or treated.

The other benefit of direct-to-consumer advertising, from a public health standpoint, is that, according to surveys of both physicians and patients, one out of five, approximately, says that to see the advertisement helps that patient remember to take his or her medication. Non-compliance is a very, very serious issue.

If you look at statins, for example, the products for high cholesterol, after two years of treatment, more than half the patients do not comply with the treatment. They are not taking their medications as prescribed. For antidepressants, we have seen studies that patients who have been prescribed an antidepressant stop taking it after four months; while studies show that longer-term usage results in less relapses and less problems, and therefore economic as well as clinical outcome.

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marcia angell
Former editor in chief, The New England Journal of Medicine

[These ads] still refer the patient to go see the doctor. So why should this distort?

Well, because it is the age of consumerism. It convinces consumers that they need drugs that they might not need, that they need some drugs at all. ...

There is this kind of marketing that is designed to convince people that they need pills. And then it's designed to convince them that they need particular pills that happen to be more expensive, or [are] just going on patent rather than coming off. And then armed with this feeling, the consumer goes to the physician, who often just prescribes the pills. It's a buyer's market here. Doctors don't want to lose patients. They don't want to say no to patients. They're in some sense too busy to say no to patients. They are forced to see more and more patients more and more rapidly. It's faster to write out a prescription than it is to try to talk with patient and convince the patient that he or she may have been manipulated by these ads.

And in addition, the doctors themselves are manipulated by the same ads, and also by what amounts to bribery from the drug companies. The drug companies turn up. They have $8 billion worth of free samples that they give to doctors. The doctors hand out the free samples to patients. It makes the doctor look good. The patient has free samples. But both the doctor and the patient, from that point on, are hooked on that particular drug. And believe me, it's not going to be a generic, and it's not going to be a drug that's just going off patent. It is going to be a new, newly patented, high price drug. ...

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Uwe reinhardt
Professor of economics and public affairs, Princeton University

I may be the odd person out, but I always felt advertising to consumers is a reasonable thing for the industry to do. A) There is the First Amendment. You make new products. Why can't you tell people about it? Why should that industry be forbidden to do it, when the auto industry can advertise SUVs? Right? You can ask yourself.

Secondly, we've found in research that quite a few patients don't actually get the drugs. There were these studies on beta blockers that said only about half the patients in America got beta blockers after a heart attack. Well, you could ask, "Wouldn't it have been good if on television they had seen, 'If your loved one has a heart attack, be sure to ask that he gets beta blockers?'" So I think I'm on the industry side on that.

The money isn't that overwhelming. I think it's something like $8 billion, maybe $10 [billion], that they're spending on it. Doctors and HMO executives are vexed by this, because you have patients coming to the doctor and say, "I want Vioxx," or "I want this drug or that drug." My feeling is, that's why we have doctors. A good doctor should say, "Yes, it's a drug," or say, "Actually, let me show you. I have a study here. That drug, for the money, isn't worth it." That is the doctor's job. So I don't understand why you would take away freedom of speech to an industry, when it's so easy to counter it.

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Richard Evans
Senior research analyst, global pharmaceuticals, Sanford C. Bernstein & Co.

Why not cut some marketing costs ... The industries, they act like all cost cutting has to come out of R&D.

I actually disagree with the notion that industry feel that all cost cutting has to come out of R&D. Let's look at the competitive reality. Assume that you run a drug company and prices are cut and what you would really like to do, quite honestly, is fire salespeople. ... There're just way too many salespeople. We're spending as an industry far more on sales and marketing than needs to be done. ...

The best thing to do, for the industry model, is to pull back sales and marketing 5 percent and spend it on R&D. ... So, let's say you go ahead and do that, but you move first. This is a marketplace, this market responds to sales promotions. So you cut back your sales promotion first. The price cut is now your smallest problem.

Your biggest problem is your competitors have more share of voice in the market and more product demand than you do. So, you not only lost price, you lost market share. If you cut your sales force, the market reality is it's a pathway to putting yourself out of business. It is not that the industry loves having a lot of sales reps -- I don't know a single CEO that wouldn't prefer to trade salespeople for research. You can't unilaterally disarm. ...

So why don't they get together and call off their sales reps? Why don't they all get together and get rid of marketing?

... The competitive reality is two-fold. One is, at least through 1998 and for many companies through 2000, you were being paid to hire that next sales rep. You were being paid to do that next consumer ad. You were generating return for your shareholders by doing that. So that near-term historic reality is kind of tough to let go of. It is a strategy that worked financially. It doesn't work so well now.

The second, we are in this prisoner's dilemma. Everybody is beginning [to think] that that next salesperson is not such a good idea. It is really more of a defensive investment. Everyone is afraid to back down first. From a fair trade point of view, they can't exactly get in room and call a truce. From my point of view, it is probably not even legal. Either someone who is the lead, for example, Pfizer, has to unilaterally back down and set the pace so that other company's can pull back on their sales and marketing or you have got to have a third party come in, i.e., regulators.

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john kitzhaber
Former governor of Oregon

There's this huge targeted advertising campaign, which creates a market demand without a clinical context. It creates a demand for a particular brand name drug, without any consideration of the fact that there may be other drugs to treat the same condition, that are just as effective or more effective, for less cost.

And so when a person shows up in a physician's office demanding the latest drug they saw on television, because that's where they're getting their information, the doctor doesn't have good objective research information on which to base his or her clinical decisions. In fact -- and I can tell you this as someone who practiced medicine for a long time -- a lot of the information doctors get is market research provided by the drug companies' detail representatives, the same people that fill your cupboards with samples and take your staff to the NBA game.

Look. Imagine how difficult it would be for you, as a consumer, to buy a toaster or a car or an appliance without Consumer Reports. It gives you objective information to compare those products. That doesn't exist in the drug market today. Really all we're trying to do in Oregon is to create a Consumer Reports for prescription drugs, for providers and for consumers. ...

There's a direct connection between the dramatic increase of prescription drug costs and the 1997 repeal by the Food and Drug Administration on the ban of direct-to-consumer advertising. It's just linear. It's just linear.

You don't think there's any benefit to direct-to-consumer advertising?

I'm not saying you shouldn't advertise. Chevy advertises. Ford advertises. But you can also go to Consumer Reports and get a good sense as a consumer of what they're really worth, and what you're getting for that expenditure. You can't do that with drugs today.


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posted june 19, 2003

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