Obama Expected To Regulate DTC Advertising

Barack ObamaAs Democrats celebrated Barack Obama's victory on Tuesday, pharmaceutical companies, ad agencies and publishers braced for a possible series of new restrictions on direct-to-consumer pharmaceutical advertising after the president-elect takes office next year.

The industry has lobbied both parties intensively over the last few years, but the alignment of a left-leaning Democratic president with Democratic control of both houses of Congress delivers what might be a fait accompli, according to close watchers of the industry, which has traditionally leaned toward Republicans.

Obama has made general reform of health care a centerpiece of his campaign, giving voice to widespread dissatisfaction with spiraling health-care costs among middle- and lower-income voters--especially families with more than two children and single mothers. The pharmaceutical industry is definitely his list of targets.

For example, part of his plan for a national system resembling Medicare calls for controlling health costs by imposing price controls on expensive specialty drugs for less common conditions.

Obama has also proposed regulating DTC advertising specifically. Although his proposals here have been vague, his future FDA appointees might pursue options such as restricting advertising for certain kinds of drugs; instituting moratoriums on advertising new drugs to give doctors time to discover unexpected side effects; requiring more stringent FDA review of ads; limiting the nature of claims made by DTC advertisers; and requiring the inclusion of even more information and warnings.

Regulations could also require larger, more eye-catching warnings similar to those found on cigarettes. Finally, an outright ban on DTC advertising, while unlikely, is favored by some opponents.

In 2007, lobbyists for the pharmaceutical industry, led by PhRMA, managed to derail a congressional push to impose these kinds of regulations, but this time, Democrats seem more determined. The process for legislating restrictions on DTC advertising will likely begin with joint congressional hearings proposed in September by Sen. Herb Kohl (D-WI) and Rep. Bart Stupak (D-MI).

Kohl seemed hopeful that the FDA and pharmaceutical companies would work out new standards for industry self-regulation that would satisfy congressional Democrats, but he warned of legislation if they didn't: "Future actions in this regard will be guided by the action, or inaction, of the FDA and industry in response to the testimony and the specific criticisms outlined at the hearing."

It's not all bad news for publishers that carry DTC advertising. TV would suffer from requirements to include more information, while magazines would benefit.

Looking to the more heavily regulated future, Bob Ehrlich, chairman of DTC Perspectives, wrote that "the increased vigilance of the FDA may make it more appealing to use vehicles where adding information is cheap, such as Internet, print, direct and point of care. It may make television ads more difficult to execute."

DTC advertisers themselves seem ambivalent about the political situation.

According to several polls, Obama was heavily favored by pharmaceutical marketers, which traditionally support Republicans. That support came, in part, because Sen. John McCain has a long history of criticizing the pharmaceutical industry as greedy.

Ehrlich, chairman of DTC perspectives, said before the election that "Obama is probably no worse for pharmaceutical companies than McCain. Both blame big drug companies for high prices and reduced innovation. Both would try to significantly change the health insurance industry. In either case, we should expect more price negotiation and re-importation."

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