• by John Gaffney , June 28, 2002

Threatened regulation of prescription drug company advertising may have lost momentum now that the House of Representatives has passed a bill to provide prescription drug benefits.

Such regulation had been proposed as a possible way to lower prescription drug prices. Several bills, including one from Michigan democratic Senator Debbie Stabenow, would require drug companies to cut their advertising budgets in the hopes that the reduced expenditures would enable the companies to lower drug costs. Stabenow’s measure was not part of the House bill. Adonis Hoffman, senior counsel for the American Association of Advertising Agencies, said he was searching the voluminous bill passed early Friday morning for language that might affect the ad business.

“We expected that they could call for a General Accounting Office study on the impact that prescription drug advertising could have on pricing,” Hoffman said.

According to The Washington Post, advertising was not a feature of the bill. As it currently stands, the plan would spend approximately $320 billion on such coverage over the next decade, starting in 2005, and an additional $30 billion on payments to health care providers. Patients would pay about $33 in monthly premiums and a deductible of $250 before the coverage began. A complex patient payment formula is also detailed in the bill.

Hoffman was concerned, and still is, that Congress is taking a potentially unreasonable and unconstitutional action versus the drug companies, by limiting their advertising. According to Nielsen Monitor Plus, the prescription drug category spent $614 million in the first quarter of 2002, making it the fourth biggest media category.

“There is a prevailing opinion in Congress that the amount of advertising the drug companies spend on must somehow be correlated to the pricing of prescription drugs,” Hoffman said. “It is a very difficult to hurdle to overcome and it is absolutely untrue.”