The advertising of pharmaceuticals direct to consumers: a critical review of the literature and debate Frank Auton University of Westminster and Autonomy Consulting Ltd Pharmaceuticals are a substantial global industry which is unusual in that with few exceptions direct-to-consumer advertising (TCA) is not permitted. This paper examines the arguments presented for and against the use of DTCA for prescription pharmaceuticals, studies the experience of the two OECD markets which currently permit DICA (USA and New Zealand) and reviews the positions put forward by the many interested stakeholders for and against DICA. INTRODUCTION The purpose of this review is to examine the arguments presented for and against the use of direct-to-consumer advertising (DTCA) of pharmaceuticals, This review was prepared following a detailed study of the experience of the two Organisation for Economic Co- operation and Development (OECD) markets which permit DTCA, namely the USA and New Zealand, and a review of the positions put forward by the many interested stakeholders for and against DTCA. These positions were developed during the current debate within both DTCA-permitted markets and those considering DTCA, primarily Europe and Canada. The opinions presented are highly polarised and despite numerous studies and research there is as yet an absence of conclusive evidence about the real impact of DTCA. International Journal of Advertising, 23, pp. 5-52 © 2004 Advertising Association Published by the World Advertising Research Center, Farm Road, Henley-on-Thames, Oxon RG9 1EJ, UKINTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) DICA has been allowed in the USA since the mid-1980s but a change in US Food and Drugs Administration Agency (FDA) regulation in 1997 opened the floodgates for broadcast prescription medicine advertising on TV as well as in print media. Prescription drug advertising has become a major category of advertising in the USA and is considered required marketing activity for a major drug launch. The only other OECD market which has permitted DICA is New Zealand, although this may end following the establishment of a Joint Therapeutics Agency with Australia. Even where permitted by legislation, DTCA is a hotly debated issue. This is especially true in markets where DICA is being considered: Canada, Australia, the UK and Europe. There are widely divergent views about the value or harm that DTCA causes and each side of the argument has presented wide-ranging studies and research evidence to back up their particular position on the issue. However, despite the weight of argument presented, there is insufficient definitive, independent and objective evidence to allow a final decision to be made on this issue. At best the evidence to date should be regarded as inconclusive. See Table 1. TABLE 1 THE ARGUMENTS SUMMARISED Claimed benefits of DTCA Claimed harmful effects of DTCA (D) Patient education — informed (1) Marketing is for profit not consumer patients are more involved education and health in their healthcare (2 Tackling under-treatment (2) Leads patients to pressure their doctors to prescribe unnecessary of inappropriate drugs (8) Improved economic value (3) Misleads patients if advertisement is of healthcare unbalanced in disclosing benefits versus side-effects @ Improved drug treatment (4) Damages the doctor/patient relationship compliance (5) Improved physician /patient () Increases pressure on doctor visits and relationship workload of physicians (©) Medicalises conditions common to human existence and ageing @ Increased patient risk from new drugs (8) Leads to increased drug budget costs (9)_Diverts funds from research and developmentPHARMACEUTICALS DTCA: A CRITICAL REVIEW METHODOLOGY The paper has been developed following an extensive literature review, collation of industry position papers and a limited number of interviews from a cross-section of the many constituents of the debate, and finally summarised using the industry knowledge and experience of the author. A substantial amount of data, opinion and comment is available on the internet. Searching DTCA using a proprietary search engine generates over 80,000 hits. These have been selectively reviewed as the primary stage of data collection. This data search provided the first screen for limited, targeted sources to be followed up for specific contact and request for further information. A total of 130 research studies, articles and papers have been reviewed in preparation of this review. WORLD PHARMACEUTICAL MARKET The world market for pharmaceutical medicines in 2002 is estimated by IMS Health at $400 billion and showed annual growth of +8%. The US market accounts for over 50% of global sales. See Table 2 and Figure 1. ‘TABLE 2 SHARE OF WORLD PHARMACEUTICAL MARKET World market 2002 Sales ($ billion) % world sales % growth USA 204 51 12 Europe (BU) om 22 8 Rest of Europe i 3 9 Japan 46 12 1 ‘Asia, Africa, Australia 32 8 i Latin America 16 4 -i0 Total 400 100 8 Source: IMS Health RESEARCH AND DEVELOPMENT The pharmaceutical industry has the highest research and develop- ment (R&D) spend of any industry sector. This is due to the critical nature of the new product pipeline to industry success and sustainable long-term profit growth. See Table 3.INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 25(1) usa [= France |= Japan Belgium ttaly Germany Austria UK Sweden Netherlands Ireland Denmark | 0.0 05 10 15 2.0 25 3.0 Source: IMS Health FIGURE 1 ANNUAL MEDICINE SPEND AS PERCENTAGE OF GROSS DOMESTIC PRODUCT In 2001 R&D spend for the US pharmaceutical industry is estimated at $30.3 billion, an increase of +17% over 2000. The FDA estimates that the average development timeline from discovery to apptoval of a new drug is 8.5 years. (Although the most stringent, the US approval timeline is the shortest in the world.) TABLE 3 R&D EXPENDITURE PERCENTAGE TO SALES BY INDUSTRY SECTOR, Industry % to sales Pharmaceuticals Aerospace Electrical machinery Motor vehicles ‘Mechanical engineering Chemicals Other manufacturing 0.6PHARMACEUTICALS DTCA: A CRITICAL REVIEW The estimated period from peak R&D spend to payback for a new drug is 10-15 years. UK PHARMACEUTICAL INDUSTRY The pharmaceutical industry represents one of the largest UK industries with the two major UK registered companies in the global top 10 of world pharmaceutical companies. GlaxoSmithKline is the worldwide No. 2 pharmaceutical company and AstraZeneca the No. 4 pharmaceutical company. In the UK market GSK and AstraZeneca are ranked No. 1 and No. 2 respectively. See Table 4. Pharmaceuticals are one of the UK’s leading manufacturing sectors, generating a trade surplus of £2.8 billion in 2001. Pharmaceutical exports in 2002 were £10.3 billion, Pharmaceuticals are the third largest generator of trade surplus after the petroleum and power generating machinery industries, ahead of telecoms. UK pharmaceutical companies employed over 250,000 people with the highest productivity (gross domestic product per employee) of any industry in the UK. Pharmaceutical sales in the UK were £10,335 million in 2002. TABLE 4 MAJOR UK PHARMACEUTICAL COMPANIES, 2000: SALES (¢ MILLION) UKSales UK Market share Rank Corporation —_ Nationality & million) (%) 1 GSK UK 1,134 126 2 AstraZeneca UK 749 83 3 Pfizer us 650 72 4 Merck us 434 48 5 Wyeth us 413 46 6 Novartis Swiss 384 43 7 Pharmacia us 343 38 8 Aventis, French 338 37 9 Lilly us 251 28 10 Roche Swiss 235 26 u BMS us 220 24 12 J8d us 200 22 13 Sanofi French 179 20 14 Bayer German 171 19 15 Abbott us 138 1.6 Source: IMSINTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) DEVELOPMENT OF EUROPEAN REGULATION OF DTCA The promotion of pharmaceuticals is highly regulated by both UK and EU legislation and industry codes of practice. The pharmaceutical industry is not allowed by statute to advertise its prescription products direct to consumers (DTCA). This is the situation in the majority of the world with the notable exception of USA and New Zealand. Changes in EU regulations have recently permitted information based Disease Awareness Campaigns (DAC) which are usually mounted by pharmaceutical companies in conjunction with patient associations. The use of DAC has been included in UK legislation. Strict regulation of DAC does not permit specific brand name mention The UK is the leading market in Europe for the use of DAC's. Novartis claim to be the pioneer in DAC's with its Stepwise campaign for Lamisil, a highly effective but expensive treatment for fungal nail infections and athlete's foot. This campaign started in 1995 using local and national press and extended to TV in 1998 and launched a website in 2000. Other examples include, Everyman Male Cancer Awareness Week, National Osteoporosis Week, Downs Syndrome Awareness Weck, SANDS (Stillbirth and Neonatal Death) Awareness Week, British Heart Week, National Diabetes Week, Glaucoma Awareness Week, Deaf/Blind Awareness Week. The European Commission has recently been considering a liberalisation of drug advertising rules and in July 2001 proposed a relaxation of the rules of the Advertising Directive that bans DTC advertising. The proposal considered making available accurate patient oriented information and included a five-year pilot programme followed by a review, allowing pharmaceutical companies to promote medicines to thtee long term chronic conditions with a high patient information requirement — Aids, Diabetes and Asthma. The Commission was not proposing to legalise DTCA but to allow patients to request information from the industry about their condition and treatment options. The proposal was rejected by MEPs in the European Parliament by an unexpectedly high margin of 494 votes to 42 on October 23rd 2002. The proposals were then sent to the Council of Ministers before returning to the Parliament. In June 2003 EU Health Ministers rejected the proposals and voted by 33 votes to 18 to uphold the current restrictions on pharmaceutical DTC 10PHARMAC TICALS DTCA: A CRITICAL REVIEW but suggested that the EC should draft a comprehensive patient information strategy. Therefore the debate is continuing and further proposals will be developed and brought forward to the European Parliament with a view to adopting final amended legislation during 2004. ECONOMIC MODELS OF HEALTHCARE DELIVERY The commercial model for pharmaceuticals is unlike any consumer product market. There are broadly two commercial models for pharmaceuticals in the world. The first is State Socialised Healthcate, like the UK NHS, where the government is responsible for the licensing and is the primary purchaser of all medicines through state or insurance operated health schemes. Drugs are made available to consumers through GP or hospital prescriptions and supplied via pharmacies. This is the predominant model throughout the world. Under NHS-type or socialised healthcare provision the patient does not engage directly in the choice or the cost of the prescribed product. The presctibed treatment is free at point of delivery. In the UK the only exception to this is the prescription charge, which is waived for approximately 75% of patients (young, elderly, chronic conditions). Thus the consumer does not engage in the true cost of medicines they are prescribed. The second is Private Commercial Healthcare, almost unique to the USA, where the government is responsible for the licensing of medicines but not the provision of healthcare except at a baseline level for the elderly and socially deprived. (Medicare accounted fot less than 2% of sales in 2001 and Medicaid accounted for 17% of sales in 2001). All healthcare is paid for privately, usually through health insurance based schemes operated individually or for employers by organisations known as Pharmacy Benefit Managers (PBMs) ot Health Maintenance Organisations (HMOs). ‘Thus the US Government does not directly engage in the cost of the healthcare ptovision to the nation funded by taxation. The provision of healthcare in the USA is a commercial transaction industry with the government benefiting directly from the corporation tax from a substantial domestic pharmaceutical industry. 11INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) The decision to permit pharmaceutical advertising direct to consumers has a different potential impact under the two types of healthcare systems. Under a private commercial healthcare system the impact on drug utilisation is not a prime concern of Government. It is therefore not surprising that the USA government has allowed DTCA of prescription pharmaceuticals. In most of the world operating state socialised medicine systems (including UK and EU) where DTCA is not permitted the impact of DTCA on drug utilisation could be substantial. ARE PHARMACEUTICALS A CONSUMER MARKET? Although the patient is the consumer they have traditionally not been the chooser of the drugs they take. In most instances the consumer is not engaged in the true economic cost of the drug treatment at the point of consumption. The traditional role of the retailer as commercial intermediary between manufacturer and retailer is also absent from the transaction process. The doctor acts as the intermediary as the key point of diagnosis and then recommender of treatment regime and selection of brand of drug for the treatment. For this reason pharmaceutical companies have traditionally aimed all of their marketing at the health professional and have been largely unconcerned about the restriction against advertising direct to the consumer. As a consequence the consumer has tended to receive less attention as a consumer in the delivery of healthcare and to be treated as a passive recipient of the chosen treatment. ‘Another feature which separates pharmaccuticals from traditional consumer branded goods is the effect of patents on product life cycles. The patent is often regarded as the granting of a monopoly to the manufacturer. In fact it ensures that all information is placed in the public domain and the 20-year molecular exclusivity is dramatically etoded by the elongated development and regulatory approval timetable. Quite often the pharmaceutical company, having invested £150 million-£250 million to develop a drug and bring it to market through the clinical trial process, may have only 8-12 years of exclusivity to recoup the financial investment, after which time the drug is superseded by low-cost generic copies of the brand. Although 12PHARMACEUTICALS DTCA: A CRITICAL REVIEW there is molecular patent protection, that does not exclude competition. In fact the reverse is true. Under the patent system the majority of all medical research is published. It is therefore usual for a new drug class to face competition from four to six approximately equivalent products in a treatment class within five years of launch. Reflecting the consolidation of the pharmaceutical industry it has become a truly global industry with 70% of the world pharmaceutical sales controlled by the top 20 companies but with no one company holding in excess of 10% market shate. A consequence of this, and the extraordinary R&D budget required to develop a drug, has been the emergence of the global pharmaceutical brand. At the same time information access for consumers and the media and financial analyst interest in health have meant that these brands have become consumer names: Valium, Losec, Lipitor, Prozac and Viagra. As consumets become incteasingly engaged in the awareness and choice of drug treatment so the pharmaceutical brand will become as important as any consumer brand. US EXPERIENCE In the USA the FDA was given responsibility for regulating drugs in 1962. It is notable that DTCA has never been explicitly illegal in the USA. Up until 1983, prescription drug promotion was aimed exclusively at healthcare practitioners. However, during the early 1980s, with growing public health awareness, the pharmaceutical industry began targeting promotional material towards the general public. DTCA in the USA began in the mid-1980s with the emergence of DACs. The first branded advertisements in consumer magazines for prescription pharmaceuticals occurred in the late 1980s. The ads were aimed at recognised non-serious conditions. In 1983 Boots advertised its arthritis pain medication Rufen on TV, encouraging consumers to discuss the product with their doctor. In the early 1990s the first ads appeared for serious conditions such as migraine and epilepsy. In July 1993 the FDA asked all pharmaceutical companies to voluntarily submit proposed DTCA material to give the FDA opportunity to comment before it reached consumers. The requirements also mandated that a major product statement detailing all side-effects and contra indications was contained in the ad. This 13INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) meant that for each page of advertising an equal amount of space was devoted to cautionary small print, which made broadcast ads effectively impractical. In 1995 the FDA held the first public hearings on DTCA. All stakeholders were invited to contribute and air their views. The pharmaceutical industry argued that existing regulations effectively ptohibited broadcast DTCA. Following extensive consultations the FDA published new draft guidance on DICA in August 1997 entitled Guidance to Industry: Consumer Directed Broadcast Advertising, ‘This brought about the most significant change in DTC promotion in 60 years. This guidance relaxed the rules on the information DTCA must carty and made broadcast DICA a possibility. In August 1997, Hoescht Marion Roussel advertised its antihistamine drug Allegra. The FDA issued its Final Guidance on DTCA in 1999 and large- scale multimedia campaigns were launched by several pharmaceutical companies. This had a significant and far-reaching effect on US public health and led to a major strategic shift in the way pharmaceutical companies market major new drug launches. This also changed the way the US public receives education on medical conditions, treatment options and specific drugs. ‘This led, in turn, to a substantial increase in drug promotional spend, which was reported by IMS as $1.8 billion in 1999. Between May and September 2002 the FDA mounted further extensive public consultation after legal challenges that its regulatory structure was at odds with the First Amendment of the Constitution, which protects freedom of speech. The issue was the balance between a company’s rights to communicate with its own customers and the FDA mandate to protect consumers. The outcome of this was a general acceptance that DICA will never be banned in the USA but there is a continual call for tougher restrictions on DTC promotion. DTCA IMPACT ON THE US PHARMACEUTICAL MARKET AND PROMOTIONAL EXPENDITURE This section analyses the dynamics of the US healthcare and prescription drug market and the trends of promotional expenditure and the differing promotional categories to see the impact of DTCA. Some initial studies will be reviewed of the payback estimated for DTCA expenditure. 14PHARMACEUTICALS DTCA: A CRITICAL REVIEW The USA has the highest per capita expenditure on healthcare in the world. In 2001 the total healthcare expenditure was $1400 billion. Of this less than 10% is drug expenditure, at $140 billion. The balance is the cost of physician and clinical setvices, and in-patient treatment and care costs. However, it is the percentage increase in drug spend, which has outstripped all other categories of healthcare expenditure, that has caused such a focus on this area. This factor is examined in more detail below. The rise in drug spend has been responsible for over 27% of the total healthcare cost increase in 2001. This has also caused the largest increases in private health insurance premiums in a decade. This has led to considerable political attention with over 18 states passing laws to contain state and consumer drug costs. See Figure 2. The US drug spend in 2001 of $155 billion has tripled since 1990. It has been the fastest-growing category of expenditure, increasing at double-digit rates for the past seven years. There are three components to this increase: more prescriptions are being written; newer and more expensive drugs are replacing older, cheaper ones; and drug prices are increasing. The relative impact of these three factors can be seen in Figure 4. % 20 0.20 HBB <2 oxperire 16 Physician and 0.16 clinical services 1 0.10 : 8 6 6 6 6 0.05 4 4 3 .00 1 L oo. ees 1996 1999 2001 FIGURE 2 USH' LTHCARE EXPENDITURE ANNUAL PERCENTAGE INCREASE, 1993-2001 15INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) US$ billion FIGURE 3 US DRUG EXPENDITURE 1997-2001 (§ BILLION) Shift to higher cost drugs 24% Price increases 37% Increase in number of prescriptions 39% FIGURE 4 CAUSES OF DRUG EXPENDITURE GROWTH The number of prescriptions written has been steadily increasing and reached 3.1 billion in 2001. See Figure 5. Promotional spending on pharmaceuticals by drug companies mote than doubled between 1996 and 2000, reaching a record $21.2 billion in 2002, representing an annual average increase of +16%. See Figure 6. The A:S ratio of pharmaceutical spending has remained remarkably constant at approximately 14% over the above period. (These figures do not include doctor ‘educational’ events estimated at a further $2.1 billion per year) 16PHARMACEUTICALS DTCA: A CRITICAL REVIEW 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 FIGURE § GROWTH OF PRESCRIPTIONS, BILLIONS, 1992-2001 25,000 20,000 5 US$ million 10,000 5000 1998 «1997-1998 ~=—« 1999 +~=—«2000~=«2001 «2002 Source: IMS FIGURE 6 US PHARMACEUTICAL PROMOTION EXPENDITURE (§ MILLION) Despite the amount of debate and public visibility of DTCA spend, it remains a small percentage (12% in 2002) of the total promotional spend, but is growing at +28% pet year. See Figure 7. 17INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) 25,000 -— DTCA 2638 20,000 Professional 2679 1996 1997 1998» 1999-2000 2001-2002 Sousce: IMS FIGURE 7 US PROMOTION EXPENDITURE SPLIT BY DTCA/ PROFESSIONAL SPEND ($ MILLION) DTCA $2638 (13%) Doctor detail $5327 (25%) Hospital detail $873 (4%) Retail samples 4 Journal advertising $437 (2%) $11,909 (56%) Source: IMS FIGURE 8 US PHARMACEUTICAL PROMOTIONAL SPEND BY CATEGORY, 2002 ($ MILLION) The breakdown of promotional spend shows that traditional methods aimed at the health professional still dominate the promotional expenditure (88%). See Figure 8. Doctor detailing tepresents 25% of promotional spend with hospital detailing at 4%, medical journal advertising at 2% and retail samples the largest spend at 56%. (Calculated for reporting purposes at retail prices. The actual 18PHARMACEUTICALS DTCA: A CRITICAL REVIEW TABLE 5 US PROMOTIONAL SPEND BY COMPANY, 2002 ($ MILLION) Rank Corporation DTCA spend % growth % share 1 Pfizer 2883 26 14 2 GSK 2303 5 i 3 Merck 2089 5 10 4 AstraZeneca 1570 30 8 5 Js 1400 7 7 6 Novartis, 863 32 4 7 Pharmacia 850 4 4 8 Schering 806 2 3 9 Wyeth 803 8 3 10 Avantis, 733 19 3 Posters $873 (6.5%) wv $11,909 (90%) Source: IMS FIGURE 9 US DTCA SPEND BY MEDIA, 2002 (§ MILLION) TABLE 6 TOP 10 PRODUCTS BY DTCA SPEND, 2000 Product Category Corporation DICA (S billion) Vioxx “Axtheitis Merck 159.5 Claritin Hay fever Schering 1175 Viagra Erectile dysfunction Pfizer 108.7 Prilosec Anti-uleer AstraZeneca 107.5 Seroxat Anti-depressant GSK 924 Zocor Cholesterol Merck 91.0 Celebrex. Arthritis Pharmacia 80.1 Flonase Asthma GSK Ee Prempro Menopause Wyeth 69.6 ‘Allegra Hay fever Aventis 66.9 Total 2467, 19INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) cash outlay to the pharmaceutical companies is only cost of goods.) All the major US companies use DICA as part of their promotional expenditure. See Table 5. The majotity of the expenditure (90%) is on television advertising. See Figure 9. DTCA spend is concentrated on a small number of drugs. The top 10 drugs account for 36% of the DTCA spend. See Table 6. These drugs tend to be newer drugs for large patient populations with long- term or chronic conditions. MARKETING IMPLICATIONS OF DTCA IN THE USA Numerous studies have been conducted to try to quantify the marketing impact of the substantial investment in DT'CA. In terms of public awareness DTCA is certainly visible in the USA. Claimed awareness of DITCA tose from 63% in 1997 to 85% in 2002. Drugs that are heavily advertised typically rank high in consumer sales: six of the top 10 drugs advertised by DICA were among the top 20 drugs in terms of sales. Sales of the most heavily advertised drugs have increased more rapidly than other drugs. Between 1999 and 2000 the sales of the 50 most heavily advertised drugs increased by +32%, while sales of other drugs increased by only +14%. Harvard School of Public Health recently researched DTCA effectiveness. They concluded an advertising elasticity of demand of $0.10, meaning that a 10% increase in DTCA within a class increases sales by 1% within that class. This produces a significant return for the pharmaceutical industry. Evety additional $1 spent on DTCA returns additional sales of $4.2. However, an independent study of the promotional effectiveness in return on investment (Return on investment Analysis of Pharmaceutical Promotion) found that DTCA had the lowest return on investment at $0.19 compared to physician meetings at $3.56, doctor detailing at $1.72 and journal advertising at $5.00. NEW ZEALAND EXPERIENCE OF DTCA New Zealand is the only other OECD country, along with the USA, where DTCA has been permitted. Although legal since 1981, the majority of promotion was through traditional print material aimed at 20PHARMACEUTICALS DICA: A CRITICAL REVIEW. health professionals until the late 1990s. The establishment of stricter ctiteria for reimbursement through the pharmaceutical management agency of New Zeealand (PHARMAC) in the 1990s, which has limited drug spend to an annual +3%, is argued as a reason for the pharmaceutical companies to seek mass marketing as a source of business growth. Since 1997 there has been a significant rise in DTCA expenditure. In 2000 the reported spend by AGB McNair for DICA was NZ$10 million, an increase of over 100% from the previous year. The teason for the permission to advertise pharmaceuticals was due to a much larger and dramatic change in social policy re-engineering in New Zealand which has been the subject of much study. This was a deliberate move in health reform from social welfare to a market model. There is a deliberate shift from state social responsibility to a position in which the individual is viewed as a productive economic unit with reciprocal rights and responsibilities. ‘This also shifts the financial burden and risk of healthcare from the government to individuals, employers and providers of healthcare. There exists a two-tier system of state-funded and privately-funded health schemes for pharmaceuticals, doctor visits, specialist care and elective surgery. The government restricts reimbursement for pharmaceuticals, and many drugs, especially new ones, are fully paid for by the patient although registered and authorised by the state. Since 1997 160 new medicines have been authorised but only 48 have been listed for reimbursement by PHARMAC and with nine of these requiring patient co-payment. As a consequence government funding of total healthcare expenditure decteased in the decade to 1997 from 87% to 77% and with a corresponding rise in private household or health insurers from 13% to 23%. Since the passing of the Medicines Act 1981, DTCA has been permitted. Additional legislation has further developed the rules for DTCA in New Zealand. The Medicines Regulations 1984 laid down more detailed requirements for the inclusion of statements about authorised use, appropriate precautions and contra indications. The Commerce Act 1986 established the legal framework for fair competition and the environment for pharmaceutical advertising, The Fair Trading Act 1986 legislated against unfair and misleading advertising. Other legislation which has a beating on New Zealand DTCA is the Misuse of Drugs Act 1975, the Consumer Guarantees Act 1994, the Privacy Act 1993 and the Health Information Act 1994, 21INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) In addition to legislation, various voluntary codes have been established. The Researched Medicines Industries (RMI) Code of Practice requites RMI members to abide by 12 guiding principles regarding business and marketing conduct, including conformity with legislation, adherence to ethical codes, provision of staff training and adherence to prescriptive principles regarding content and conduct of advertising, sales promotion, market research and clinical trials. Complaints ate heard by the Code of Practice Standing Committee, which can impose a range of sanctions from suspension of adverti- sing to fines up to NZ$30,000. The Advertising Standards Authority (ASA) Code of Practice for Therapeutic Advertising is a voluntary code to which some advertisers and all agencies and media owners sign up. The code is administered by the ASA and it requires DTCA to instruct consumers to consult a health professional and direct them to authoritative sources of information. ‘This is usually to company 0800 numbers or websites. This requirement is in place of a full product disclosure statement required by the medicines regulations. The Ministry of Health Medsafe Advertising Guidelines reinforce the ASA approach and have permitted the relaxation of full product disclosure statements above. ‘The Therapeutic Advertising Advisory Service is a user pays service established by the Association of New Zealand Advertisers to enable advettisers to pre-clear advertising compliance against the various codes and regulations. DTC advertisers use this service almost without exception. THE FUTURE OF DTCA IN NEW ZEALAND In November 2000 the New Zealand Ministry of Health published a xeview of DTCA and invited comment on four proposed future models. (1) Model 1: ban DICA. (2) Model 2: maintain the status quo — in other words retain DTCA. under the current rules and regulations with continued industry self-regulation. (3) Model 3: retain DI'CA, but introduce more stringent rules and segulations, and continue with industry self-regulation. 22.PHARMACEUTICALS DTCA: A CRITICAL REVIEW (4) Model 4: retain DICA, introduce more stringent rules and regu- lations and introduce state regulation by a government agency. The debate was extensive and included extensive analysis of the US experience. The Health Ministry maintained that most of the evidence put forward took the form of claim and counter-claim rather than being evidence-based and, where given, the evidence was inconclusive. In August 2001 the Ministry concluded the review with a decision to continue DTCA with mote stringent rules and regulations but maintaining industry self-regulation (Model 3). ‘The regulatory changes being discussed include the following: * Only allowing advertising in the media and preventing the practice of promoting pharmaceuticals by writing direct to patients, offering competitions, free doctor visits and free offers. * Banning DTCA on vehicles due to difficulty reading required information. * Banning event sponsorship by brand name pharmaceuticals. * Incteasing fines for non-compliance. * Specifying the amount of time and space devoted to risk and information provision. * Requiring risk information voice-overs (as pet USA). * Burden of proof for complaints. Shifting the complainant to advertiser. * Requirement of fair balance between benefit and tisk information. The outcome of the current discussion will be made in a proposed revision to the Medicines Act 1981 and the Medicines Regulations 1984 which will then have to be passed by the government. Considerable lobbying is continuing from all sides of the debate. A further development occured in December 2003 when New Zealand signed a treaty with Australia to establish a Joint Therapeutics Agency which will include a regulatory regime ‘for the regulation of quality, safety and efficacy or performance of therapeutic products’. This is intended to come into effect in 2005, and could eventually lead to a ban in both countries, although this would require legislation. Health Minister Annette King announced on 17th December that she should reach agreement with Australia on a harmonised approach to DTCA and disease state (unbranded) advertising by March 2004. 23INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) ARGUMENTS AGAINST DTCA The author’s special thanks go to the Royal Pharmaceutical Society of Great Britain for permission to quote from Meek (2001) and to Scott Ratzen MD for permission to refer to his extensive study on DICA (Ratzen, 2003). Marketing for profit not consumer health and education The pharmaceutical industry view that advertising direct to consumers raises consumer education and hence compliance, which will ultimately solve the recognised issue of patient undertreatment, has been vociferously attacked. The questioning of the motives of the pharmaceutical industry is typified by Hoffman (1999; British Medical Journal 318: 1,301-1,302): ‘These advertisements are intended not to educate patients, nor empower them to be more intelligently involved in their own care, but merely to increase physician prescrib- ing, regardless of need. This is hardly surprising since, even when marketing to doctors, pharmaceutical companies provide far less education than jatgon and promotion, and many claims prove to be inaccurate or misleading. Advertisements are hardly likely to be more reliable. ‘The industry likes to cite undertreatment of important problems such as hypertension as an argument in favour of advertising, exhorting public to “ask your doctor about...” But do not expect to see consumers regaled with promo- tion about inexpensive diuretics or beta blockers, any more than about measles, mumps and rubella vaccination and cervical smears. The issue is not about whether deficiencies in doctors’ and patients’ awareness exist, but whether promotions designed to increase demand and profits, that focus primarily on me-too products in competitive cate- goties can really be expected to benefit the public health’ Arguing the case for DTCA as a means of solving undertreatment, it is clear that patient awareness of treatment options is only part of the issue. Hirschfeld ef ad (Journal of American Medical Association, 1997, The National Depressive and Manic Depressive Association Concensus Statement on the Undertreatment of Depression) 24PHARMACEUTICALS DT CA: A CRITICAL REVIEW conclude that the patient-based reasons for the undertreatment of depression include ‘Failure to recognise the symptoms, underestimating the sevetity, limited access, reluctance to see a mental healthcare specialist due to the stigma, non compliance with treatment and lack of healthcare insurance’, the argument being that, given the wide range of socio-economic reasons which are having an impact on the undertreatment of a disease, DTCA does not represent a single answer, DTCA sceptics argue that the pharmaceutical industry is selective about the conditions it identifies where the problems of under- treatment can be helped by advertising. If people are aware of the condition but have not sought help due to lack of health insurance, then publicity is unlikely to solve this issue. The Medical Director of New Zealand’s pharmaceutical manage- ment agency PHARMAC states that companies frequently argue that DICA means patients are better informed and encourages them to discuss sensitive issues with their physician. He comments: ‘This is a persuasive argument but avoids the fact that the purpose of DTCA is to sell a product, if disease awareness and compliance is the point of the exercise, there are a number of other strategies that could be employed’ (PHARMAC Medical Director, Dr. Peter Moodie, 2000) Inappropriate prescribing In the extensive literature that exists, numerous instances ate cited of DTCA campaigns which are claimed to have led to inappropriate prescribing. This is from both clinical studies and also from FDA action taken following complaints about specific drug advertisements. Hollon (1999) cites a study that revealed that between 1992 and 1995 the use of calcium antagonists and Angiotensin Convertive Enzyme inhibitors for the treatment of hypertension actually increased in direct contradiction to the Joint National Committee on High Blood Pressure recommendations. The reason given was that the effectiveness of phatmaceutical promotion compared to the enforcement of recommendations had led to inappropriate prescribing, A sample of cases upheld by the FDA on DI'CA which could lead to inappropriate prescribing includes the following,INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) LESCOL - 1999 A DICA campaign by Novartis in the USA was found to be misleading in its comparisons of effectiveness and price comparisons with other cholesterol-lowering drugs. XENICAL — 2001 A DTC campaign by Hoffman La Roche for its weight-loss programme Xenicare was deemed to be advertising for Xenical and failed to provide adequate product and labelling information. AVANDIA ~ 2001 A GSK-produced TV campaign for its glitazone treatment for diabetes was found to be misleading and false due to its failure to provide sufficient information relative to its use with insulin treatments. Misleading the public Those who argue against DT'CA claim that the pharmaceutical industry track record of its own self-regulation in advertising to doctors is a legitimate area of focus in the debate. If the industry cannot be relied upon in its promotion to doctors then this raises setious concerns about its ability to communicate with the public. Detractors point to several studies of promotional literature which suggest that promotional literature aimed at doctors is unreliable and misleading. Stryer ef af, (1996) looked at 500 items of promotional material and concluded it was reasonable to assume that drug companies are trying to increase sales of their products, even though their efforts may contribute to inappropriate prescribing. Herxheimer ef af (1993) have reported that important warnings and precautions were missing in half of 6,700 ads they looked at from leading medical publications from 18 countries. Concern has been expressed that DICA tactics have gone beyond patient education and are aimed at increasing sales and market share. Such tactics which are held to be incompatible with public education arguments include the following. 26PHARMACEUTICALS DTCA: A CRITICAL REVIEW FINANCIAL INDUCEMENTS TO THE PUBLIC These have been widely condemned and include a Schering campaign for Claritin, a drug for hay fever allergy, which was promoted with $5 and $20 rebate coupons and similarly the SKB anti-ulcer drug Tagamet. CELEBRITY ENDORSEMENTS Consumer groups and critics have attacked the increasing use of celebrity endorsements of drugs. The dispute began in 1999 with Schering using ABC anchor Joan Lunden for an advertisement for Claritin. Other prominent figures in DTC campaigns include Jennie Garth, an actress from Beverley Hills 90210, for migraine treatment Imitrex; Olympia Dukakis for Novartis; baseball player Kirby Puckett for Pharmacia; and Upjohn and Stephanie Powers for Alza, makers of Ditropan, an overactive bladder treatment. DTCA has a damaging impact on the doctor/patient relationship A key concern of the medical profession is whether DICA has a negative impact on the doctor/patient relationship. The pharmaceu- tical industry argument is that DTCA equips the patient with knowledge in the consultation with their doctor which leads to a more informed and shared decision making. This view is more fully explored in the arguments for DTCA below. ‘The Consumers Association (2001) in the UK strongly rejects this argument. It claims that there are two reasons why DTCA fails to promote rational prescribing. One is patient pressure on doctors to prescribe products the patients see advertised and the other is heavy advertising of only some of the treatments which may ot may not be the best or most cost-effective treatment available. The US Scott Levin DTCA audit for the second quarter of 2000 showed that overall 29% of physicians feel positively about DICA, 25% feel neutral but 46% feel negatively. Specialists who were most positive about DICA were podiatrists (60%), psychiatrists (40%), orthopaedic surgeons (37%), dermatologists (36%), urologists (35%), obstetricians/gynaecologists (35%) and neurologists (34%). Those specialists who felt most negatively were specialists in infectious disease (47%), pediatrics (57%), ear, nose and throat (56%), allergy (51%) and internal medicine (50%). 27INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) A number of studies have shown that doctors prescribe because they think the patient expects it (Britten & Ukoumunne, British Medical Journal 315:1,506-1,510, 1997; Cockburn & Pitt, British Medical Journal 315:5 1997; Macfarlane ef a/, British Medical Journal, 1997 315 p1,211). Perti ¢# al, (Clinical Therapeutics, Vol 21,10 1999) note that a refusal to prescribe a medication requested by a patient has serious implications for both physician and patient. For the physician, it could mean that the patient will seek another practitioner who will accommodate their wishes. For the patient, it could mean protecting them from a medication that could cause harm. Wilkes ef al. (Health Affairs, Vol 19,2 p110-128) note that ads rarely offer any kind of advice on non-pharmacological interventions that may be more important than drug therapy for many patients who then object when their physician insists on discussing low-fat diets, stress management ot allergen avoidance rather than write a prescription. In the USA, doctors tend to be price insensitive because the drugs do not come out of their budgets. They therefore have little incentive to manage drug costs. However, despite this, conflicts can arise when a patient expects a drug that is not included in the patient’s managed care insurance plan or the health organisation’s drug formulary. On the other hand in the UK doctors in the NHS have been given control and incentives to manage their drug budgets, and organisations such as the National Institute for Clinical Excellence have a tesponsibility to decide which treatments should be available on the NHS. If patients request medicines that ate not available or are too costly for NHS drug budgets to bear, there could potentially be a much bigger impact on the doctor/patient relationship than has been the case in the USA. In the 2002 FDA physician study 57% reported to feel a little or somewhat pressurised to prescribe advertised drugs that patients request, although only 28% of them felt it caused any real tension between them and their patients (FDA, 2003). DTCA increases pressure on doctor visits and GP workload Critics of DICA are concerned that prescription drug promotion increases the frequency of doctor visits and GP workload. Physicians have traditionally not favoured DICA, The Ametican Medical Association (AMA) conducted a survey of members in 1984 and found a majority (84%) opposed DTCA. In 1997, a survey among the members of the American Academy of Family Practitioners showed a 28PHARMACEUTICALS DTCA: A CRITICAL REVIEW large majority had negative feelings towards print (80%) and broadcast advertising (84%) for prescription medicines. The latest sutvey conducted by the FDA among 500 physicians indicated for the first time that this attitude was beginning to change, with 53% claiming that DTCA was improving the value of the discussion with patients. However, many reported that DTCA was causing problems in the doctor/patient relationship, with 41% claiming to need to spend time to correct patient misconceptions from DTCA. The report, which is summarised more fully in the ‘for’ arguments section, has been criticised by the President of the American College of Physicians — American Society of Internal Medicine for being too positive about the impact of DTCA. In 1999, the National Institute for Healthcare Management study on rising pharmaceutical costs quoted evidence from Scot Levin (US Healthcare Market Research Agency) that doctors’ appointments rose by +11% for conditions featured in DICA ads compared to +2% for all visits. DTCA medicalises health and ageing The New Zealand government review of DTCA has raised a discussion about the potential risk of encouraging ‘medicalisation’. In their report to the Minister of Health supporting the ban on DTCA in November 2003, Direct to Consumer Preseription Drug Advertising — For Health or Profit, Professor Les Toop ¢ a/ argue that the purpose of pharmaceutical company advertising is to increase sales by encouraging brand loyalty and increase demand by creating new markets. A new group of medicines, so called ‘lifestyle drugs’, have been the subject of much of the DTCA in New Zealand. Three-quatters of tespondents to the New Zealand GP survey felt that DI'CA of lifestyle drugs encourages medicalisation of a well population. Lifestyle drugs are typified as those which fall into the grey area between medical and social definitions of health. Examples include male pattern baldness and obesity. DTCA is felt to redefine normal processes of ageing as medical problems. Pharmaceutical solutions are offered for normal physiological or ageing processes and discourage sustainable behaviour change to address health problems such as exercise and diet. 29INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) DTCA leads to increased patient risk from exposure to new drugs This is one of the polarising debates of the DTCA issue. From an industry point of view the advantage of DTCA is to disseminate marketing information about a newly licensed drug as quickly as possible. The sooner patients hear of newly available treatments the sooner they can benefit from them. This assumes that you believe newer is better. The Centre for Medical Consumers argues that pharmaceutical companies do not need to prove that a new treatment is better than older and cheaper therapies. Cost is not the only issue. Taking a new medication on a long-term basis is going into uncharted territory. Clinical trials may last onlymonths, whereas in real life, experience is gained over many years and adverse interactions and rare side-effects may take a long time to emerge. Rezulin was hailed as a breakthrough in the treatment of type- 2 diabetes. After reported cases of liver toxicity it was withdrawn in the UK but only taken off the US market two years later and was eventually linked to dozens of deaths. The withdrawal of Bayet’s cholesterol-lowering drug Baycol in summer 2001 raises similar issues. The FDA has reports of 31 deaths associated with this drug, which has been marketed since 1997. DICA leads to increased drug budget costs AUS General Office of Accounting (GAO) report (2002) has recently examined expenditure on pharmaceuticals. Prescription drug expenditure in the USA has grown in the last decade by an average of 18%, accounting for 10% of the 2001 US healthcare budget of $1.4 trillion. Between 1993 and 2001, US spending on prescription drugs increased from $50 billion to $155 billion, which makes it the fastest- growing sector of the healthcare budget. The 2001 study released by the National Institute of Health Care Management Foundation examined the 50 most heavily advertised prescription drugs. These drugs generated sales of $41.3 billion in 2001, or about 27% of the total $155 billion prescription drug spend in that year. These 50 drugs accounted for 47.8% of the increase in drug spend between 1999 and 2000. Expenditure on these 50 drugs rose by 32%, compared with a 14% increase for the remaining 9850 other prescription drugs on the US market. 30PHARMACEUTICALS DTCA: A CRITICAL REVIEW DTCA diverts funds from R&D activity The 2002 GAO report found that US pharmaceutical companies spent $30.3 billion on R&D activity compared to $19.1 billion on promotional activities, including $2.7 billion on DTCA activity. Spending on DTCA grew by a faster rate than that on R&D (+145% and +66% respectively) between 1997 and 2001. ARGUMENTS FOR DTCA Patient education: DTCA-informed patients are more involved in their healthcare Until almost the closing decades of the 20th century the majority of patients were content to leave health knowledge and medical information to the expert. The doctor would dispense knowledge and provide answers, preferably without being asked impertinent questions by inquisitive patients. Patients were told what to do, theirs was not to teason why, ‘doctor knows best’ was the rule and on the whole patients were quite happy with it that way. That era has passed. Society has changed along with our access to information. Health is no longer regarded as a matter of good fortune. Thanks to bettet public health and as a result of advances in medicine and surgery we live longer. We have also become more conscious of the need to live healthier lifestyles. The fact remains that when we live longer many of us do so burdened by chronic and incurable illness. ‘The extended family that once would have looked after the eldetly and frail nowadays hardly exists. ‘The decline of the nuclear family and the rise in single-person households are putting a premium on health as a Passport to employment and independent financial security. Health is therefore a top priority throughout life. As a consequence the informed patient as a partner participating in medical decisions is an unstoppable fact. The need to teach out to consumers and advise them of symptoms of undiagnosed conditions and request them to take a medical con- sultation is accepted by many health authorities, health professionals and consumer groups. These groups include the American Centre for Disease Control. Advertising is important because the advertiser precisely targets those people who need and want the information, 31INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) identifies the media to reach them, identifies what they want to know and motivates them to get involved in the process (Mertens 1998). DTCA allows pharmaceutical companies to educate patients on the range of options which are available to help them manage their disease states. Since companies are expected to, and in fact should always, promote the safe use of products, education should provide the foundation for the overall communications programme (Mertens 1998). Those supporting DTCA point to a number of successful campaigns that prove that DICA improves patient education because it improves patient access to information. This in turn leads to more informed medical consultations and facilitates better compliance and outcomes. The Merck campaign for Proscar — a treatment for benign prostatic hyperplasia — is widely regarded as having been successful in raising awareness about a medical condition that men were reluctant to discuss with their doctor. In 1997 a drug campaign was run for a treatment for genital herpes thought to be affecting up to 45 million people in the USA. In a survey of those responding to a toll-free number, 45% claimed to have visited their physician within three months of seeing the campaign. The proponents of DTCA argue that it helps to break down the reluctance of people to talk about difficult or embarrassing medical conditions. This argument is supported by one of the most successful and well-known campaigns for erectile dysfunction treatment — Viagra. The FDA study on DTCA among ’consumets found that 50% of respondents who recalled DTCA had sought additional information. Of those, 81% sought information from their doctor, and 52% from a pharmacist. ‘The Coalition for Healthcare Communication (CHC) points to a range of surveys which demonstrate the usefulness of DTCA. Public opinion surveys by the FDA, Prevention magazine and the National Consumers League suggest that consumers by a two to one majority like to see advertising for prescription medicines. It also states that it has increased consumer knowledge about their own health and has encouraged them to ask more questions and pursue answers from physicians, pharmacists and other sources. The CHC commissioned an extensive study into consumer attitudes by John Calfee from the American Enterprise Institute which 32PHARMACEUTICALS DTCA: A CRITICAL REVIEW confirmed a very positive approval from consumers towards DTCA (Calfee 2002). The concept of the informed patient is becoming a recurrent theme in developing the arguments for allowing DICA in the UK and Europe. There have also been discussions on deregulation linking with the patient’s ‘right to know’. The Chief Executive of the MS Society recently asked: with the principle of the ‘doctor knows best’ becoming history and politicians committed to ending the postcode lottery of treatment, could advertising help tip the balance in favour of more rational and equitable treatment? The Professor of Health Cate Development at the University of Sheffield, Brian Edwards, argues: the world has changed. The existing regulatory framework is creaking under the combined pressure of a more knowledgeable patient, an interested media and communication technology. Advertising might help secure better patient compliance with medicines that need to be taken over an extended time-scale to secure full clinical benefits (Cardy et ah). The US health system is in transition from a purely physician directed one to a more consumer/patient-directed one. This is primarily due to the volume of healthcare information that is now widely available. About 25% of the available online information is health-related. More than 50% of adults who go on the web for information do so for health information. DICA ads are a response to this trend rather than the cause of it. This trend towards greater consumer involvement in healthcare is reflected in FDA policy (and UK/European policy) in deregulating drugs from prescription only to OTC. In the past two decades the FDA has deregulated over 600 drugs from prescription only medicines to OTC. Pharmaceutical companies ate being required to put incteasing amounts of information on leaflets which they are then prohibited from communicating in their advertising. Somewhere between these extremes the industry and regulators need to find balanced and objective advice about medicines sufficient for an informed choice to be made about medication and its appropriate use (Gay ef ai). In January 2003 the FDA released findings from its 2002 physician survey, (FDA, 2003). This was the third survey into DICA. Highlights included the fact that many physicians believed DTCA can play a positive role in their interactions with patients. Most agreed that because a patient saw a DTCA ad they asked more thoughtful 33,INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 25(1) questions during the interview and it also made them more aware of possible treatments. They felt DTCA helped educate patients about their health problems made patients and thus more involved in their own healthcare. The study highlighted that when a patient asked about a drug, in 88% of the cases they did in fact suffer from the condition for which the drug was intended. Physicians believed that DICA did encourage patients to seek advice from a doctor and 82% felt that the patient understood that only the doctor can finally decide if the drug is right for the patient. Consumers surveyed in Prevention magazine in 1999 agreed that DICA allowed them to be more involved in their healthcare (76%), educated them about the risks and benefits of prescription medicines (72%) and helped people make decisions about prescription medicines (72%). Over 50% of participants in the study said that DICA made them feel better about their health. DTCA tackles undertreatment The CHC, operating on behalf of the advertising industry, stated in a submission to the US Senate in support of DTCA that an estimated one-third of Americans suffering from diabetes were undiagnosed. This disease costs $98 billion per year in medical costs and lost productivity. One in five Americans has high blood pressure, yet 18 million of them are unaware of it. Forty-three million Americans suffer from arthritis at a cost of $65 billion per year. It is the leading cause of disability, but despite the availability of treatments to reduce the burden of this disease they are underused. There are numerous studies which are cited as examples of the costs associated with undertreatment. A 1998 study found that the cholesterol-lowering drug Lovastatin produced a 37% reduction in risk of first acute major coronary event, myocardial infarction (MI) and angina and estimated that six million Americans would benefit from cholesterol reduction with statins (Downs ef a/, 1998). Another US study found that only half the people who could be helped by a beta blocker following MI were prescribed this medication (Harlan 1998). Similarly, in a previosuly quoted study (Hirschfeld ef ai, 1997) found that there is overwhelming evidence that individuals with depression ate being seriously undertreated when safe, effective and economic treatments are available. 34PHARMACEUTICALS DTCA: A CRITICAL REVIEW. Epidemiological evidence has shown substantial underdiagnosis of many major diseases for which effective treatment exists, including arthritis, hypertension, diabetes, osteoporosis, depression and childhood asthma. Even after diagnosis these conditions are undertreated. The American Diabetes Association (2002) estimates that of the 17 million people in the USA with diabetes only two-thirds are diagnosed and treated. The report by the International Osteoporosis Foundation (2001) presented to the European Commission that osteoporosis is a silent epidemic that is overlooked, underdiagnosed and undertreated. Only 14% of women 50 and over expected to develop osteoporosis in their lifetime despite the fact that one in two will experience an osteoporosis linked bone fracture. The FDA consumer survey found that as a direct consequence of seeing DTCA, 27%, or 23 million Americans, made an appointment to see a doctor to talk about a condition they had never previosuly discussed. The Weissman study in February 2003 conducted by researchers from Harvard University and Massachusetts General Hospital and Harris Interactive found that 25% of patients who visited their doctor after seeing DTCA teceived a new diagnosis, and of these, 43% were considered as having a ‘high-priority’ health condition. In November 2002 the results of the Oxford Heart Protection Study of more than 20,000 patients demonstrated the benefits of a broad treatment by Simvastatin in people usually regarded as at lower tisk of heart disease. The Oxford study signals that 15 million people in the UK should be given statins while in reality only one million are now prescribed them. Despite the powerful clinical evidence, pharmaceutical companies are prohibited from communicating the benefits to consumers or encouraging them to seek a medical consultation. Economic value of DICA Although ctitics of DTCA point to the rapid rise in drug expenditure in the USA, studies have shown that this is due to the rise in volume of prescribing due to the ageing population and incteased uptake of available treatment rather than drug price inflation. Over the past 10 years the median age of Americans has increased by two years. The fastest growing population set is, surprisingly, the over-85s, Declines in death rates for major conditions such as heart attack have expanded 35INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) the market for patients with long-term medication needs. The expenditure on prescription drugs is less than 10% of total healthcare expenditure in the USA. This figure is consistent with most well- developed healthcare markets. Despite its visibility, less than 2% of US pharmaceutical revenues ate spent on DICA. Although rapidly rising, this aspect of promotion accounts for only about 15% of total drug promotional spend. Health outcome studies have shown that improved treatment and compliance with drug therapy can make substantial healthcare cost savings through the avoidance of highly expensive hospitalisation and surgical procedures. Newer drugs are more expensive and are the most heavily advertised drugs. This is often noted in criticism. However, the use of newer treatments tends to lower all non-drug medical spending, resulting in a net reduction in total cost of treating a condition. On average, replacing an older drug with one 15 years newer increases drug spend by $18 but reduces overall cost by $111 (Lichtenberg, 2002). The Tufts Centre for the Study of Drug Development (2002) reports that the disease management organisations surveyed believe that increased spending on prescription drugs reduces hospital in- patient costs. Since prescription drugs account for about 10% of total US healthcare expenditure, while in-patient care costs 32%, the use of approptiate drug therapy may help moderate or reduce growth in the costliest component of the US healthcare system. DTCA improves drug compliance Poor communication and misunderstandings between patient and doctor are known to lead to suboptimal health outcomes through medication error or non-adherence to a long-term treatment plan. There is evidence that DTCA can improve patient compliance. (It should be noted that these data are disputed and contradicted by other studies from those opposed to DICA.) The 2002 FDA study of physicians (FDA, 2003), found that DICA. did improve patient compliance. When questioned 54% claimed that DTCA improved patient compliance by increasing the chance of the patient taking the medicine properly, and a smaller group (33%) claimed it incteased the likelihood of patients adhering to their drug regime. 36PHARMACEUTICALS DTCA: A CRITICAL REVIEW Ina study conducted by Pfizer in June 2001, utilising the RxRemedy database of the drug utilisation of 25,000 monthly diary panel participants across five major advertised drug categories, persistence curves were created. This highlighted that those consumers who involve themselves in their healthcare by requesting prescription drugs are mote likely to remain compliant with their therapy. Patients who requested and received a drug were more likely to remain on therapy than those where the doctor dictated the treatment. Further, those responding to advertising in their request for treatment were the most highly compliant with therapy of any group tested. Consumers report that DTCA affects their compliance. In the 2000 Prevention magazine survey, 50% of respondents who were taking a prescription drug recalled seeing advertising for the drug they were using. About half the respondents stated that the ads made them feel better about the drug’s safety and its benefits. Twenty per cent said the ads would make them more likely to take their medicine regularly and 33% said the ads reminded them to have their prescription refilled regularly. DTCA improves physician/patient relationship Contrary to concerns expressed by opponents of DTCA, research among doctors and patients is reporting an improved quality of discussion because of greater patient involvement in their healthcare as a consequence of DTCA. The physician/patient relationship is strengthened not weakened. A Scott-Levin survey in 2000 found that 56% of doctors agreed that when DTCA prompts a patient to talk to a doctor about a previously undiscussed condition it improves patient compliance or adds to patient knowledge of medicines’ risks and who should and should not take a drug. Consumers surveyed in Prevention magazine in 1999 said DTCA helped them have better discussions with their doctor about their health. In the 2002 FDA consumer survey patients report getting positive responses when they discussed drugs they saw advertised; 81% said they felt their doctor welcomed such discussions. Only 4% felt their physician got angry or was upset and 71% reported that their doctor reacted as though this question were an ordinary part of the visit. 37INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) STAKEHOLDER POSITIONS US pharmaceutical industry The pharmaceutical industry in the UK clearly supports DICA. This is for business-building and non-financial benefits. The Pharmaceutical Research and Manufacturers of Ametica (PhRMA, the US pharmaceutical industry trade body) contends that DTCA fosters competition, which leads to improved quality and lower consumer prices. In addition the PhRMA indicates that DICA may also benefit public health by starting a patient/doctor dialogue, which leads to health education and compliant treatment. DTCA also improves consumer knowledge of new products as well as identifying symptoms and new treatments. The US pharmaceutical industry is well aware of the arguments against DTCA, especially relating to the escalating drug spend, but argues that higher drug utilisation reduces overall health costs. US managed care industry The managed care industry has an apprehensive view of DICA. Drug expenditure is the largest rising cost of their covered healthcare expenditure. Many health insurers believe DTCA increases demand and for newer, higher-priced medicines, when they are trying to encourage use of older, cheaper generics. They feel under pressure from subscribers to include the most popular prescription drugs on their formularies. US physicians Many doctors feel increasingly pressurised to prescribe advertised drugs. They also believe misleading advertisements lead to unreason- able patient expectations and inappropriate requests for treatment. Others feel at risk of losing professional credibility if they do not keep up with all new medicine developments. The American College of Physicians is in support of greater consumer healthcare awareness but questions if DTCA is the appropriate vehicle. The AMA has for years opposed many aspects of DTCA due to its concern about the impact on the doctor/patient relationship. 38PHARMACEUTICALS DTCA: A CRITICAL REVIEW US pharmacists In 1988 the American Pharmacists Association supported DI'CA ptovided no brand name was mentioned. In 1999 the policy was revised and supported DTCA provided it was complete, comprehensive and understandable and informed patients about tisks and benefits. US consumers The FDA surveys of consumer opinion found an increasingly favourable response to DICA. ‘The National Consumers League stated a consensus view that DTCA is an effective tool to promote consumers to seek health information from their healthcare professional but wanted more research into DTCA promotion and its effects. UK pharmaceutical industry The Association of the British Pharmaceutical Industry (ABPI) is not overtly pushing for the adoption of DTCA, although Trevor Jones, the Director General of the ABPI, is on record as advocating its adoption. There is member concern about antagonising the government, which authorises, sets prices for and pays for the majotity of prescription drugs. There is also member concern about alienating the medical community, who are ABPI’s primary customers, There is a difference of opinion between the larger multi-national pharmaceutical companies with DTCA experience and budgets and the smaller companies which lack the expertise and resources to compete if DICA is permitted. There is also a view that DTCA adds to the overall marketing investment necessary and that existing techniques of public relations, medical education and working with patient groups are providing adequate patient awareness. However, the ABPI is promoting the development of the informed patient, which will permit the ever-increasing availability of patient information about healthcare and treatments available. UK pharmacists The Royal Pharmaceutical Society of Great Britain conducted one of the most thorough investigations of the worldwide experience of DTCA over a period of several yeats in order to develop an informed 39INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) opinion about DTCA (Meck 2001). Its research and report have been used widely (with permission) in this review. It provides one of the most comprehensive and least biased views of what is happening in DTCA that the author has reviewed during this research. The Council of the Royal Pharmaceutical Society decided its position on the issue of DTCA in December 2001. The Council recognises that further developments in DTCA ate likely, and it will revisit the issue as necessary. The Council’s position is: “The demand for information about prescribed medicines from patients and the public is likely to increase, but DTCA is unlikely to be the best way of providing it because the aim of advertising is to persuade, not to give balanced information about benefits and risks. DTCA, moreover, carties a significant risk of exposing more patients to the adverse effects of new drugs. If DICA is successful, it may well adversely affect doctor-patient relationships, distort public health priorities and disrupt the cost controls operated by the NHS. The Society therefore supports increased provision of balanced information to the public, while taking into account the above points’ (The Royal Pharmaceutical Society, December 2001) UK medical profession There is a wide disparity of opinion among individual medical practitioners. It has not been possible to obtain a consensus statement from any of the UK medical practitioner trade associations, Searching the British Medical Journal reveals considerable debate about the value of the so-called ‘expert consumer’. This is a patient with a chronic condition who has made a point of learning everything about their condition to the point of being more aware than their GP. This is now embraced by the NHS and a pilot scheme is running in 100 primary care services. The increasing complexity of medicine puts an extra burden on the professional to keep pace with change. GPs are finding it increasingly difficult to perform their ‘gate-keeping’ role with ever-increasing options and risks as medical knowledge continues to expand. It is also 40PHARMACEUTICALS DTCA: A CRITICAL REVIEW harder for patient or professional to find an ‘expert’ to help resolve rare disorders or to find alternative treatments. UK consumers THE INFORMATION GAP AND ITS CONSEQUENCES There is evidence that patients do not feel that they are getting sufficient or appropriate information (Coulter ef a 1998; Jones ef ai 1999). From a study in the UK, Coulter ef af (1998) identified the main deficiencies of existing patient materials. Patients want information about treatment options and outcomes and want to participate in treatment decision: most do not receive it. The quality of most patient information materials is poor. Many materials contain inaccurate and out-of-date information. Few provide adequate information about treatment risks and side-effects. Technical terms are not explained. Covetage of treatment options is incomplete. Uncertainties are ignored or glossed over. Information about treatment effectiveness is often missing or unreliable. Few materials actively promote shared decision making. HEALTHCARE INFORMATION ON THE INTERNET Internet usage is increasing rapidly in Europe. Navigating the wealth of information already available and bringing it into perspective is the challenge. The ABPI report (Ullman 2001) advocates patient education to enhance information-seeking skills as it was clear that few could grasp the tange of material or know which sites provided reliable, quality information. There are wide concetns about the quality and appropriateness of health information on the internet. The World Health Organisation (1999), among others, has produced guidance on assessing the content of health-related websites. The European Federation of Pharmaceutical Industries and Associations (EFPIA) has also produced guidance for its members. More recently (November 2002), the European Commission has issued guidelines on Quality Criteria for Health Related Websites. The issue is to avoid unscrupulous promotion, creating unneces- sary concern or even panic among the public, or the risk of dangerous self-treatment by the public. Quality marking and the use of evidential 41INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) support (‘evidence-based information’ was a term used) should help information seekers identify reliable information. It is not clear to what degree people distinguish reliable authoritative information from misreporting or untruths. Experience in advertising has shown that the public adapt remarkably quickly to ‘sales ploys’, identifying dissonances and inconsistencies. However, people are still susceptible to plausible suggestions, especially when in need and looking for hope. CHANGING PUBLIC ATTITUDES The provision of appropriate levels of information is generally agreed to be ethically good and necessary to support the principle of ‘informed consent’. It was not something that state governments should opt out of simply to save money. Generally, there have been moves away from a traditional ‘paternalistic’ relationship between the patient and the professional, and there is now more emphasis on individual rights as well as increasing expectations on the healthcare systems. Coulter ef a/ (2003) from a survey across eight European countries found that attitudes are changing. People wanted more information about healthcare than they tended to be given, and were looking to their healthcare professionals to provide it: use of the internet for health information was generally low. People wanted to be involved in decisions about their healthcare, and were enthusiastic about the idea of patient-held healthcare records. Most people wanted to have a choice of healthcare provider. If people generally are seeking more choice, then they will need mote information to support that choice, assuming that there are such options within their healthcare system. ‘THE CONSUMERS ASSOCIATION The UK Consumers Association cites its own survey in June 2002 where only 25% of the public would trust the pharmaceutical industry to provide them with impartial information. In its recent policy report — Patient Information: What's the Prognosis, based on views of patients, carers, academics and representatives of government and industry — the Consumers Association advocates high-quality patient information. Its recommendations include the following. There should be one central, independent and impartial source of information on medicines and treatments which is stripped of any commercial or political bias and which the public can rely on to 42PHARMACEUTICALS DICA: A CRITICAL REVIEW provide or direct them towards accurate and current information. Although several worthy initiatives do exist, what is lacking is an overarching body to ensure consistency and safeguard standards. Information about medicines acquired privately should also be made available. Medicines education should be introduced into the school curriculum within the wider context of health education. The Association believes this will provide children with a basic respect for and understanding of medicines as well as equipping them with the ctitical skills necessary to appraise health information and become involved in shared decision making with health professionals. Health professionals’ communication skills should be strengthened, so that ‘communication’ becomes embedded within training and patients are involved in the design, delivery and evaluation of such communication training. Effective communication — listening, two-way talking and explanation — is key to developing good relationships between health professionals and patients, and across the health service generally: ‘THE INFORMED PATIENT INITIATIVE. The Informed Patient is a research initiative conducted by Professor Don Detmer, Director of Cambridge University Health at the Judge Institute of Management at Cambridge University (Detmer ef al. 2003). The objective is to provide a consensus statement detailing recommendations for policy actions in the future of what information patients require to be fully engaged in the management of their healthcare. The consensus statement has been produced following a literature survey and the convening of five expert panels in November 2002. The major conclusion from the Informed Patient study is the conviction that the future of healthcare in Europe demands far greater health-related information for patients and citizens. ‘The information and knowledge support must be available at the level of the EU/member states and also at regional/local levels to ensure sufficient education and support. The Informed Patient study addressed the key question of how to provide appropriate information to patients/citizens across the EU. This is in order to deliver impartial, sound (evidence-based) and accessible information and knowledge support to address the generally inadequate provision to patients/citizens noted today; to ensure that such support will mitigate some of the burden for the growing numbers of elderly people with chronic illnesses on the 43INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) already constrained healthcare systems across Europe; to help patients and healthcare professionals better evaluate treatment choices as medical science and healthcare become increasingly complex; to increase transparency and accountability of the healthcare system so that choice and cost-effectiveness are evident; and to adopt, on an ongoing basis, new information and communications technologies such as the internet and digital TV, so that healthcare operations will promote best practices, adopt new, effective treatments and discard ineffective and/or unsafe, old treatments. The consensus statement, coming from a conference held in Cambridge in early December 2002, recommends a four-part European initiative including the creation of a framework for the future, support of implementation, coordination of the suppliers of information and continuing leadership and education. Creating a framework for the future can be accomplished by convening key stakeholders in the near future to develop the set of initiatives outlined in the statement. To support implementation the focus is the EU and membet state governments and the private sector explicitly on the accessibility, availability and quality of structured information for patients/citizens; to coordinate the suppliers of information by developing and using agreed standards, promoting the effective provision of quality information; and to provide leadership and education by providing critical support to patient health education and continued professional development. The consensus report calls on the European Commission to take the lead in moving the agenda forward by building on and co- ordinating existing initiatives into a broader framework, bringing together both private and public sector interests to assist developments for the benefit of patients and the healthcare industry in member states and regions and localities as appropriate. THE FUTURE Despite the extensive arguments and citation of studies there is a consensus that not enough is really known about the long-term impact of DTCA. There is a particular lack of understanding about consumer behaviour as opposed to attitudes and knowledge and ultimately therefore about consumer health outcomes. There is not yet enough experience of the impact of the FDA’s effective deregulation of 44PHARMACEUTICALS DTCA: A CRITICAL REVIEW pharmaceutical advertising in the USA in 1977 to determine the long- term impact. Other deregulated industries have shown short-term effects and then a different long-term impact after deregulation, e.g. US airlines and UK passenger rail transport. In his paper Benson (2001) identified three dominant parameters which are critical to the development of DTCA beyond the USA. First, there is suboptimal shared understanding of DTCA such that confident best practice and consistency of approach have yet to be fully defined for broad-scale company action to take place, even where corporate and top-level management support backing DTCA in principle. Second, there is the compounding issue of decentralisation of company and key function organisation structures that fragment common effort along budget control and profit centre lines and responsibilities, often anchoring DTCA initiatives at a local country or tegional level. Third, there is the inherent conservatism of an industry still heavily dependent worldwide on government health expenditure for reimbursement of sourced revenue and product licence approvals, all controlled by powerful regulatory forces resistant to anything that they perceive might upset the public balance sheet. This is also compounded by the conservatism of the industry driven by a desire not to upset the primary customer for theit efforts — the medical fraternity. There is also concern about the payback on the additional invest- ment in DTCA. Most of the pharmaceutical companies are not used to consumer marketing and advertising unless they have consumer marketing divisions. The move into DTCA in the USA was originally seen as a cost shift away from highly expensive 1:1 doctor detailing to cheaper direct-to-the-consumer mass communication. Such is the competitive nature of the industry that most pharmaceutical companies have found that DTCA investment is in addition to existing marketing activity rather than substitutional. There is still only limited, but so far positive, research evidence of the investment payback in additional DTCA expenditure. ‘As a result DTCA activity is moving ahead but very slowly. As Europe and Japan represent over 50% of the world pharmaceutical market these are the next targets for an industry committed to long- term growth and where globalisation and consolidation ate so key with the top 20 companies holding a 70% share of the world market. ‘The role of DICA outside the USA will continue to be low-key but engaging at levels within the regulatory framework: such things as 45INTERNATIONAL JOURNAL OF ADVERTISING, 2004, 23(1) non-product-specific disease and symptom awareness activity often backed by third party and patient group support. This is supported by the ABPI in the UK and the EFPIA in Europe for informed patient initiatives aimed at influencing regulatory change. The European Commission under President Romano Prodi met with the Council in Lisbon in 2000 where they developed an eEurope Action Plan, designed to be a blueprint for a new European agenda to use e-technology to achieve an ‘information society for all’. All member states agreed on the ‘strategic importance of full exploitation of new information technologies in the public administration of health, for the benefit of the citizen as consumer of both healthcare services and health information’, Commision Initiative for theSpecial Euroepan Council of Lisbon, March 2000. One of the key targets of this plan was Health Online, which has the primary objective of developing ‘an infrastructure of user friendly, validated and interoperable systems for health education, disease prevention and medical care’ (eBurope, 2000). This commitment to e- health in Europe has been ratified several times by the Council, the Commission and the European Parliament. In line with this is the EFPIA guidelines on company-sponsored websites. This will allow patients to have direct access to Europe- based companies through the internet. These are in line with the quality criteria established for health-related websites by the Commission workshop in Brussels in June 2001. KEY ISSUES It is clear from previous instances of the deregulation of advertising, particularly in the area of professional services such as those of opticians, lawyers, accountants and engineers, that significant benefits accrue to users and consumers. Improved information generally brings in its train greater competition, better services and lower average prices without in any way diminishing professional standards, as long as misleading advertising is properly controlled by effective legislative or self- regulatory systems. The advent of, and widespread access to, international internet- based patient information groups and other websites devoted to medical conditions and their treatment means that attempts to prevent 46PHARMACEUTICALS DTCA: A CRITICAL REVIEW the widespread dissemination of information on pharmaceutical products have only a very limited chance of success. In any event, few people would believe today that ignorance of medical conditions and possible treatments is preferable to an informed public. The age of the witchdoctor and the quack is surely over and a public informed of the hazards of obesity, smoking, excessive alcohol consumption and so on and the importance of preventative medicine as well as available treat- ment options is generally accepted as desirable from many viewpoints. In this context it is clear and far from controversial to argue that significant benefits ate likely to flow from the advent of DTCA, in the shape of more knowledgeable patients, more able and willing to seek appropriate treatments in good time, as well as to modify potentially harmful behaviour (as has clearly been the case in elation to heatt problems in recent years in most developed countries). However, it is aiso necessaty to accept that allowing DTCA may create some demand for unnecessary and inappropriate treatment, and demands for ‘lifestyle’ drugs that healthcare budgets cannot and possibly should not be required to meet. There are two key questions that need to be answered before an assessment can be properly attempted as to the overall cost/benefits of DI'CA. First, what is the likely scale of the benefits of DTCA in relation to possible negatives, from the patient perspective, and specifically is DTCA likely to be beneficial to the long-term health prospects of patients/customers. Second, in the event that the likely benefits of DICA outweigh the negatives ‘from the patient viewpoint, what are the likely costs and benefits to the government from the health system perspective? For example what extra costs/benefits might result from greater patient awareness, and what more/fewer costs might be incurred in relation to primary healthcare professionals, and greater demand for pharmaceutical products? An overall assessment then needs to be made as to whether the benefits (assuming benefits are found, for if they are not there is little point in going further) to patients can be justified, either by virtue of possibly lower costs to health systems or in relation to higher costs should that eventuality prove to be the case. 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(2002) The customer revolution, Eighth Annual Economist Pharmaceuticals Conference, February. ABOUT THE AUTHOR Frank Auton is Senior Lecturer in Marketing at Westminster University Business School. He is also Managing Director of Autonomy Consulting Ltd, specialising in healthcare. Prior to joining Westminster Business School in 2003 he spent 25 years in industry in marketing and general management positions in both consumer healthcare products and pharmaceuticals. He was most recently Vice President Europe Region for SmithKline Beecham Pharmaceuticals and General Manager International and Global Marketing Director for Nelsons — the largest and longest established UK company in homeopathy and complementary medicine. He is Fellow of the Marketing Society. 52.