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WASHINGTON (By Arlene Weintraub, Business Week) July 16, 2007 — If Representative Henry Waxman (D-Calif.) had his way, the little butterfly used to advertise the insomnia remedy Lunesta might not be allowed to flutter all over our TV screens, as it has incessantly since the drug was approved in late 2004. Waxman believes the U.S. Food & Drug Administration should be able to forbid companies from advertising directly to consumers until new drugs have been on the market for at least three years. He tried to mandate such a restriction by attaching it to a drug-safety bill. But on July 11 he came up short. After a debate centered on drug companies' right to free speech, the bill passed with virtually all restrictions on drug advertising stripped out.

The end of Waxman's proposal, however, may be the beginning of a fierce new debate over drug advertising. Critics are increasingly concerned that the ads encourage consumers to demand drugs they don't need, and in the process put themselves at risk of suffering dangerous side effects. A moratorium on advertising, some say, would give the FDA and drugmakers more time to understand the risks a particular drug poses before they plaster it all over the media.

With Democrats resurgent in Washington, some members of Congress are coming up with alternative ways to limit drug marketing. Representative Pete Stark (D-Calif.) has introduced a new bill that would prohibit pharma companies from claiming tax deductions for ads promoting drugs that have been on the market for less than two years. Hitting the industry where it hurts—the bottom line—is his attempt to discourage the advertising while circumventing freedom-of-speech concerns. Drug ads, he says in an interview with BusinessWeek, "don't tell the whole story. We need to give people time to understand the pros and cons of a drug."

Revolt on Madison Avenue

It's an almost uniquely American phenomenon. Only one other country in the world—New Zealand—allows drug companies to market their products directly to consumers. All others deem it too dangerous. However unusual, marketing drugs to consumers has become a huge business. Since 1997, when the FDA relaxed the rules on Big Pharma's television marketing, drug advertising surged to $5.3 billion in 2006, up 14% from 2005, according to TNS Media Intelligence. Ad spending in the pharma sector grew faster than that of any other industry among the top 10 spenders, including autos and telecom. And the three most heavily advertised drugs—Lunesta and Ambien CR for sleep, Cymbalta for depression—were approved just in the past three years.

The prospect of all that lost ad revenue is enough to get a lot of industries reaching for the heartburn medicine. (Perhaps Nexium, the fifth most heavily advertised drug of last year?) The revolt against Waxman's bill was led by three members of Congress from New York, home to most of the major TV networks and ad agencies, not to mention drug giants Pfizer and Bristol-Myers Squibb.

Critics say it's no coincidence that the opposition to the ad moratorium came from the part of the country that has the most to lose. "Public policy is about capital, not public interest," gripes John Abramson, clinical instructor at Harvard Medical School and author of the book Overdosed America, which explores the commercialization of health care. Abramson adds that there are now two drug lobbyists for every member of Congress, up from one when his book was published in 2004. None of the three members of Congress—Edolphus Towns (D-N.Y.), Anthony Weiner (D-N.Y.), and Eliot Engel (D-N.Y.)—responded to BusinessWeek's requests for interviews.

Facing a Powerful Drug Lobby

Some lawmakers seeking to muzzle the endless stream of "ask your doctor" pitches believe that doing so will not only protect consumers but will preserve the rights of physicians to make the best decisions for patients. "If I ask for Viagra six times, I might get a prescription," Stark says. "Doctors are getting pressure from people who don't have the ability to make decisions about whether these drugs are good for them or not." Stark, a longtime critic of the health-care industry, tried to introduce legislation to limit drug advertising a couple of years ago. But now that the power is shifting toward the Democrats, he thinks he might have a good shot of getting it through this time. "We could never get a hearing with Republicans," he says.

Stark will face tough opposition from the powerful drug lobby. The industry's trade group, Pharmaceutical Research & Manufacturers of America (PhRMA), believes drug ads benefit public health by encouraging people to see their doctors about conditions they might not otherwise know they can treat. Safety shouldn't be a concern, says Scott Lassman, PhRMA's senior assistant general counsel. "Our feeling is that when a drug is approved, the FDA has already made an assessment that it is safe."

Perhaps, but sometimes the FDA doesn't recognize safety issues until long after drugs hit the market. In the past year the agency has demanded that tough new warnings about side effects be added to all insomnia and depression drugs. That means that Lunesta, Ambien CR, and Cymbalta might have been introduced to American consumers with more complete information about their risks, had their manufacturers refrained from advertising the drugs for three years after they launched them.

Leaving Out Key Facts

Some experts say the lack of safety information is part of a bigger problem with drug advertising. Dominick Frosch, assistant professor of medicine at the University of California in Los Angeles, studied drug ads earlier this year and concluded that they often leave out key pieces of information that would help people make better choices about their health care. For example, most of the ads don't say how many people suffer from the conditions the drugs are meant to treat, nor do they explain what causes the diseases. Instead, "the ads are driven by appeals to peoples' emotions," says Frosch. "Doctors would prefer that decisions be driven by rational choices."