Drug-Ad Fight Looms in Congress
Advertising trade groups are bracing for a fight as lawmakers threaten to dampen what has become a $2 billion-plus market in the five years since federal law opened up direct-to-consumer advertising to drug companies.
One lawmaker earlier this month introduced a bill to curb pharmaceutical advertising, and another has vowed to revive efforts to introduce similar legislation that was defeated last year.
When this year began, lobby groups were breathing a little easier about the prospects for anti-drug-ad legislation, hoping that new Senate majority leader Bill Frist, R-Tenn., would not back the passage of such laws. Frist, a doctor and strict constitutionalist, has so far been silent on the issue.
On Jan. 7, Rep. Jerrold Nadler, D-N.Y., introduced a bill to end tax deductions for prescription-drug advertising. Michigan Sen. Debbie Stabenow, a Democratic leader on healthcare issues, sponsored a similar bill in the Senate last year that did not pass. However, she "still has great concerns," said a spokesman from her office. "We'll certainly do something [about the issue in 2003]."
Advertisers and broadcasters say they will join drug companies in efforts to repel any such legislation and to protect an advertising category worth more than $1.6 billion annually in television media spending alone.
"We're certain this will be part of the prescription-drug debate in this Congress," said Daniel Jaffe, executive VP for government relations at the Association of National Advertisers. Attacks on drug advertising could set "a very dangerous precedent," he added, with implications for other categories.
At issue is what role advertising has played in rising healthcare costs. Spending on direct-to-consumer drug advertising has expanded rapidly since federal restrictions were eased in 1997, jumping from $1.2 billion in 1998 to $2.2 billion in the first 10 months of 2002, according to CMR. Several studies on the subject have linked higher sales of heavily advertised drugs to increased ad spending on those drugs.
"There is strong evidence that dramatic increases in advertising and marketing are a major reason [for higher drug prices]," Stabenow contended last year when she announced her legislation.
Defenders of pharmaceutical ads say they help to inform consumers about health problems and medical advances. "There have been any number of studies showing this is enormously valuable to consumers," said Jaffe.
Pharmaceutical companies also argue that drug use and drug costs are going up in part because of advances in medical research. "We have more medicines for more diseases," said Jeff Trewhitt, a spokesman for Pharmaceutical Research and Manufacturers of America, a trade group.
Other defenders say the First Amendment protects drug advertising from interference by the federal government. "We'd take exception to any efforts to limit free-speech advertising of legal products," said Dennis Wharton, spokesman for the National Association of Broadcasters.
Last year, under Democratic control, the Senate passed several measures to restrain prescription-drug costs, but the Republican-controlled House did not act. Legislators like Stabenow now hope to attract a few maverick Republicans to the issue in the closely divided but GOP-controlled Senate.
Should that happen, it would throw the pharmaceutical ad issue to the House, where Republicans sympathetic to corporate concerns are in firmer control but, at the same time, are under pressure from voters anxious about prescription-drug prices.
"There is going to be a serious effort to address this issue in the larger context of healthcare costs," said Adonis Hoffman, Senior VP for the American Association of Advertising Agencies. "I know the issue is not going to go away."
Added Hoffman: "Sen. Frist understands the value of an educated population."
Posted on aef.com: February 12, 2003.
Todd Shields, Adweek. January 27, 2003
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