Prescription Drugs and the Cost of Advertising Them-Part I

Please also see: Research and Marketing of Drugs: a Challenge-Part II

(2/27/05)- We will continue to point out situations where the FDA warns a drug company about a misleading promotion, only to see that the promotion has been long withdrawn from the market. The reason why we will continue to do this, is because we hope that a more meaningful penalty, other than a slap on the wrist will be imposed on these companies that illegally puff their products.

The FDA has sent a letter to Centocor Inc., a subsidiary of Johnson & Johnson, asserting that its promotional material for the drug Remicade was misleading. The FDA letter asserted that a pamphlet that the company's sales representatives used in marketing the drug to physicians was misleading because it "contained unsubstantiated effectiveness claims and omits risks associated with Remicade in the treatment of rheumatoid arthritis,"

Michael Parks, a spokesman for Centocor said the material hasn't been used since October.

(1/24/05)- All too frequently we see the situation where the FDA warns a drug company about one of its ads, only to hear that the ad is no longer appearing, so that the drug company can not be penalized for its action. In the latest case of this happening, the FDA has warned Pfizer Inc. about problems with some ads for the pain killing drugs Bextra and Celebrex.

The FDA letter dated January 10, said five of the ads for the drugs failed to include important information about their risks and made misleading or "unsubstantiated effectiveness claims". The ads included a 15-second Celebrex commercial featuring a woman playing a guitar, and a 27-minute infomercial about Celebrex and Bextra.

A Pfizer company spokesman said the Celebrex ads cited by the FDA were no longer running. She had no comment on the other material. It seems clear to us that some penalty has to be imposed on the drug companies for violating the law even though the commercial in question is no longer being actively used.

(1/6/05)-According to Verispan, a health-information company, drug companies spent about $8 billion on "detailing" to office based physicians for the 12 month period of time ended October 2004.. "Detailing" involves dropping off free samples at the doctor's office by the drug companies sales people, while at the same time trying to educate the doctors and their staff as to the advantages of the product. That is more than double the increase from 1996 when Verispan estimated that the drug companies spent about $3.6 billion in "detailing".

Verspan estimated that Pfizer spend about $406.3 million in direct-to-consumer ads for Celebrex from 1999 to 2003, while Merck spent about $459.8 million during that same period of time in doing the same for its drug Vioxx, which it recently removed from the market.

(12/26/04)- Since September, the FDA has sent out nine letters warning companies about false promotions. In a recent matter involving AstraZeneca and its ads for its cholesterol lowering drug Crestor, the letter called the ads for the drug "false and misleading", and also accused the company of misrepresenting the agency's opinion in the ad.

The ads in question included the statement that "the FDA has confidence in the safety and efficacy of Crestor", and also stated the "(the agency) had publicly confirmed that Crestor is safe and effective." Neither of these statements was true. This case shows that in merely slapping a company on the wrist for its misdeeds, the agency has little power to truly punish the wrongdoers in these matters involving false ads.

AstraZeneca began the ads shortly after November 18th, when Dr. David J. Graham, a safety official at the agency, testified before Senator Chuck Grassley's committee that Crestor was one of five approved drugs that he felt were unsafe. Astra began the campaign to counteract this testimony, and in fact succeeded in halting the decline in the sale of Crestor.

One of the problems is however that these letters come too late since the damage has already been done. Astra had already stopped showing the ads when it received the letter. No penalty is enforced against the company, so there is nothing to stop them from doing it again. In this particular case top FDA officials were widely quoted as expressing their concern as to the safety of Crestor. Public Citizen, a health advocacy group, has in fact called for the withdrawal of the drug.

According to an analysis by Public Citizen there were 29 reports of kidney failure or insufficiency among patients given Crestor in the first year of its approval in the U.S. This was 75 times greater than the rate of kidney failure or insufficiency for all other similar drugs combined. Astra has responded that the drug may actually improve kidney function.

Dr. Christine Hemler Smith wrote the FDA letter, which stated, "This claim is misleading because it minimizes the risks associated with the 40-mg dose of Crestor." Astra has agreed to reserve the 40-mg dose for those patients who failed to lower their cholesterol with a 20-mg dose.

The FDA has approved a new sleeping pill, Lunesta (eszopicione, Sepracor). The manufacturer expects to spend at least $60 million next year to advertise this pill.

(12/23/04)- President Bush has nominated Michael O. Leavitt, the former three-time governor of Utah, and the present head of the EPA to replace Mr. Thompson as secretary of health and human services.

Departing Representative Billy Tauzin (Rep.-La.), a onetime Democrat who became a Republican in 1995, will become president of the Pharmaceutical Research and Manufacturers of America (PhRMA). PhRMA is the retail trade-lobbying arm for the pharmaceutical industry. Mr. Tauzin was a major force in the passage of the Prescription Drug Law that was enacted on December 8, 2003. This is the law that established the Medicare prescription drug discount cards program, and the prescription drug insurance law that begins on January 1, 2006. Mr. Tauzin headed the House Energy and Commerce Committee until he stepped down in January because of his bout with intestinal cancer. His son Billy recently lost an election to replace him in Louisiana.

The 61-year old Mr. Tauzin will replace Alan Holmer in January 2005 at an estimated salary of $2 million a year. Under present rules of ethics in Congress he will be barred from lobbying members of Congress for one-year, but he is free to lobby the administration and Medicare officials. He can make campaign contributions to members of Congress and can interact with them socially. In January he turned down an offer to succeed Jack Valenti as president of the Motion Picture Association of America. Dan Glickman, a House member from 1977 to 1995 took the job.

(11/6/04)- Former secretary of health and human services Tommy G. Thompson told an audience of medical professionals in 2001that there is no reason why they should be prescribing Nexium, AstraZenca's next generation of drug to Prilosec for acid reflux. Both drugs are very chemically similar. The patent for Prilosec had expired so the drug became available as on over-the-counter medication at a cost nowadays of about $40 per month. Here it is 3 years later and mainly because of an advertising campaign for Nexium that cost $257 million in 2003, according to the research firm of Nielsen Monitor-Plus, the drug is the 7th best selling prescription drug in this country. Its sales were $3.1 billion in this country last year and it continues to grow this year. It is estimated that the drug industry spent over $3.8 billion on advertising last year.

The FDA is studying a proposal aimed at loosening the restrictions as to what has to be included and how it is worded in drug advertisements. The change would permit the print ads to be more reader friendly while concentrating on the most common side effects which would be highlighted in larger type than the present case of very tiny type being used to tell about the negative side effects.

(10/8/2004)-On September 17, 2001 the FDA sent a warning letter to Merck & Co. saying "in a promotional campaign for Vioxx that minimizes the potentially cardiovascular findings that were observed" in a clinical trial comparing Vioxx to naproxen, a much cheaper painkiller. The letter went on to allege that the promotional campaign failed to inform the consumer that Vioxx had a four-to-five times increased risk for heart attacks than did users of naproxen.

The reason why we point out this example of a warning letter to a drug company involves the issue of promotion of an expensive brand name drug as compared to the non-advertising of cheaper alternative medicines that may be just as beneficial to the consumer. Keep in mind the drug companies spend hundreds of millions of dollars to advertise their products to the consumer. Keep in mind also that the rest of the western world does not allow its drug companies to advertise their products directly to the consumer. Generic companies do not as a rule advertise their products since they constantly are striving to keep their costs down.

It wasn't until the federal government passed legislation in 1997 that legalized advertising by the drug companies directly to the consumer. Before the enactment of this law the drug companies had to advertise in medical journals only. Over the ensuing years, as we have written about in this article, the drug companies have consistently increased their budgets for advertising at a far larger percentage than they have for new discoveries.

With the costs for our drugs rising much faster than the rate of inflation, isn't it time for us to go back to revisit this law? Is the "informed consumer" is better off today, or were they better off when the advertising could only be done directly to the medical professionals? We also ask what part can modern technology and the Web play in this issue? We would like to hear from our viewers on this matter.

The pharmaceutical industry continues to increase the amount of money it is spending to advertise their products. Ad spending on prescription drugs rose 24% last year to $3.2 billion, according to TMS Media Intelligence/CMR. There seems to be no let up in sight since the first half of 2004 saw an increase of 30% over a comparable period in 2003.

Pfizer Inc. announced that it had retained the William Morris Agency to come up with entertainment-marketing ideas, including embedding Pfizer products in movies and television programs. Please keep in mind that the 1997 law that allowed direct-to-consumer advertising requires that the negative side effect of the drug be included in the ads.

Pfizer Inc. announced that it would shift its ad agency in connection with a new advertising campaign for its erectile dysfunction drug Viagra. Spending for the campaign is expected to hit the $100 million mark this year as the company tries to head off the inroads that have been made by Levitra (Bayer Corp. and GlaxoSmithKline) and Cialis (Eli Lilly & Co. and Icos Corporation).

Sales for drugs dealing with erectile dysfunction hit the $2 billion-a-year category this year. Originally Viagra had the field to itself, but it is now estimated that Cialis accounts for about 19% of the sales and Levitra accounts for about 14% of the sales. The shift of ad agencies in the promotion of Viagra meant that McCann Erickson Worldwide in New York gained the assignment from Cline Davis & Mann in New York.

When a drug company spends over $100 million on an ad campaign for one of its drugs, we are all too painfully reminded that direct-to-consumer ads are taking an inordinate amount of the pharmaceutical companies spending on matters totally unrelated to research and development of new drugs.

The FDA has sent an "untitled" letter to GlaxoSmithKline requesting that the company stop using a TV ad for Paxil Controlled Release its anxiety treatment drug. The letter stated that the ad was "false or misleading" because it suggested that the drug could be used by a broader range of patients than it was actually approved for. The ad also implied that the drug was safer than actually demonstrated. An "untitled" letter from the FDA difers from a "warning" letter in that the penalty for the violation is less odorous.

The impression on the public as a result of the ad is hard to change. Although the company was given until June 23 to respond to the letter, it had already stopped using the ad on May 9. The company said it would not run the ad again. Glaxo stated that the FDA had approved the ad before the company ran it on TV, but the agency said that this was not so.

The Bush administrations' promotion of the new Medicare law is a violation of the law that prohibits the usage of public funds for propaganda purposes according to a report by the General Accounting Office (GAO). The videos appeared as if they were news releases, when in fact they were actually ads to accentuate the positives of the new law.

The materials were in English and Spanish and were produced by the Health and Human Services, the agency that oversees Medicare. The GAO report said that the videos did not identify inform the viewers that the source was the government. The viewing audience does not know that the actors were also being paid by the government and were not independent news reporters.

Senator Frank Lautenber (D.-N.J.), who requested the GAO inquiry, said that President Bush's re-election campaign should repay the government for the cost of the videos which was about $43,000. He said that he would introduce legislation in Congress to force the repayment.

In another sign of the continued crackdown on the illegal promotion of off-label usage of drugs by the pharmaceutical companies, the U.S. Attorney in Boston, Michael Sullivan and all 50 states attorneys general announced the negotiation of a settlement against Pfizer Inc. for the promotion of its drug Neurontin. The pharmaceutical giant agreed to pay $430 million in both civil and criminal penalties to resolve the matter. Thus the Justice Department in addition to the FDA has entered into this legal battle in connection with promoting off-label uses for drugs.

A petition has been filed with the FDA,by a personal-injury law firm, Finkelstein & Partners (Newburgh N.Y.), asking that the agency act on claims that the drug may be tied to suicidal behavior. The law firm has filed three lawsuits against Pfizer on behalf of people who committed suicide or attempted it while on the drug.

The petition is based on the agency own adverse-event reporting database, and it asks that the FDA require the company to add a suicide risk item on its label for Neurontin. According to the petition, the number of suicides reported by Pfizer to the FDA jumped to 17 in the first 6 months of 2003 compared with a total of 8 reported in 2002. In a statement, Pfizer said it remains "confident of the safety and effectiveness of this product".

Earlier efforts by the FDA to crack down on off-label advertising were hamstrung by court decisions holding that certain types of drug promotions were protected by the First Amendment. Once the FDA has approved a drug, doctors are free to use the drug for other ailments also, but it is illegal for the pharmaceutical company to promote the possible additional unapproved usages.

The penalty was assessed against Warner-Lambert, since all the activities in question occurred between 1994 and 2000, which was before Pfizer acquired Warner in late 2000. The violations came to light as a result of a whistle-blower suit brought by Dr. David P.Franklin in 1996 who was a medical advisor to the Warner-Lambert, Parke-Davis sales staff. Dr. Franklin filed his suit under a Civil-War era whistle blower statue that allows private individuals to sue on behalf of the government. Dr. Franklin is now a marketing executive with Boston Scientific, a medical device manufacturer.

Warner-Lambert agreed to plead guilty to two counts of violating the Food, Drug and Cosmetic Act and pay a $240 million criminal fine. It will also pay $83.6 million in civil damages for losses suffered by Medicaid and $68.4 million to settle civil liabilities for the losses to state Medicaid programs. Thirty eight million dollars will go toward educating the consumers and doctors about the potential hazards of off-label usage of drugs. Dr. Franklin will receive $26.6 million as his part of the settlement.

Pfizer has also agreed to sign a "corporate integrity" agreement that allows for monitoring of its marketing practices. Neurontin was originally approved by the FDA for epilepsy and later for a shingles-related condition. Last year Neurontin brought in $2.7 billion in sales to Pfizer of which 90% was for off-label purposes. The basic patent for Neurontin expired a decade ago, but Pfizer asserts that other patents including one related to manufacturing protect Neurontin. It is expected that some generic versions of Neurontin will be on the market in late 2004 if the Pfizer patent extension claim is denied.

Pfizer has a successor to Neurontin called Lyrica, or pregabalin waiting in the wings. After delays during animal testing and subsequent human trials Pfizer applied to the FDA for approval to sell the drug in October of 2003. The Lyrica application simultaneously seeks approval of the drug for the treatment epilepsy, neuropathic pain and generalized anxiety disorder. The company filed for approval of the drug in Europe also and expects to gain that approval some time in the month of June 2004.

The drug manufacturing companies in Europe are attempting to change the law over there, so that direct-to-consumer advertising would become legal, just as the law was changed in this country in 1997. As a first step in this process, the European Commission is considering allowing pharmaceutical companies to work together with governmental regulators and patient groups to disseminate basic drug information.

"We don't want to impose a massive cultural shift in one swoop, said Scott Ratzan, a physician and vice-president of government affairs for Johnson & Johnson. He is chairman of an industry task force lobbying for the change. The European Commission acknowledges that patients need more information about the various drugs which are now available to them through the Web, but also realizes that the drug companies spent over $2.6 billion on advertising these drugs in the U.S. according to IMS Health, the health-consulting firm.

A new television ad, sponsored by AARP is aimed at legalizing the importation of prescription drugs from Canada. The ad shows a couple watching a news program about the war against cocaine and other illegal drugs. A voice says: "another drug war-the fight for affordable prescription drugs" by pushing to "legalize the safe importation of drugs from Canada." The ad closes with the comment: "It's a drug war we can win."

Pfizer Inc. has launched its first advertising campaign aimed at directly comparing the benefits of its migraine headache medication Relpax against GlaxoSmithKline's Imitrex. Pfizer plans to spend about $20 million advertising Relpax, for which it had spent very little money on any advertising campaign for up till now.

In the print ad there is a line that states: "Clinical studies prove that with Relpax, more people get relief with just one dose than those taking Imitrex." Imitrex had about $1.2 billion in sales last year versus Relpax's sales of $43 million in 2003 according to NDCHealth, a health-care-information provider. Imitrex spent about $70 million on its advertising budget in 2003.

Ad spending by prescription drug companies grew by 21% last year to $3.43 billion, and with comparative product ad spending just beginning to emerge, this figure will soar even more. Pfizer said that this was the first time that it will use a superiority claim against a rival product in consumer ads. According to Dorothy Wetzel, Pfizer's vice-president of consumer marketing for U.S. pharmaceuticals: "We have to give consumers a reason to talk to their doctors about the drugs."

In order to make such comparative claims companies must conduct two head-to-head clinical trials that yield meaningful clinical results. This will of course lead to increase expenditures by the drug companies. That in turn means even higher drug costs down the road for all of us.

Eli Lilly & Co. said that the U.S. Attorney in Philadelphia has launched a civil investigation into its marketing and promotional practices. Lilly said the products likely to be involved in the investigation include the osteoporosis drug Evista and the mental health drugs Prozac and Zyprexa. This is in addition to the Justice Department's subpoena to the company in July 2002 concerning the marketing and promotional practices for Evista from the Office of Consumer Litigation.

Total advertising spending in the U.S. rose 6.1% to $128.3 billion in 2003 according to TNS Media Intelligence/CMR, a New York research firm that tracks ad spending in 14 media platforms. The greatest percentage increase took place in Internet advertising where the increase was 15.7% from 2002 to 2003. One of the areas of smallest percentage increases was in network TV, where the increase was only 1.8% from 2002 to 2003.

Outlays for ads on cable TV rose 15.6% to $12.3 billion in 2003. For the Spanish-language network TV rose 12.8% to $2.2 billion last year. It is the need to reach niche markets that is causing the biggest jumps for advertising dollars. Again according to TNS Media, advertising on the Internet rose to $6.5 billion last year. Local newspapers saw their share of advertising revenues increase by 13.4% to $22.8 billion in 2003.

The U.S. Supreme Court in a 5-4 decision upheld a federal district court's decision that upheld the right of pharmacists, who sell so-called drug compounds to advertise this specialty. Compounding is often needed to create a specialized drug for an individual patient who may be allergic to an ingredient in a mass-produced drug. Thus the pharmacist must mix ingredients form different drugs to create the specialized medication.

Under the Food and Drug Administration Modernization Act of 1997, pharmacists or physicians were denied the right to advertise the fact that they specialized in the compounding of certain drugs. The U.S. Court of Appeals for the Ninth Circuit in San Francisco upheld the right of the compounders to advertise their skills. Judge Cynthia Holcomb Hall wrote "compounding is not only legal under state law, but most states require their pharmacists to know how to compound." The government argued in the case that they were trying to protect the public by "preventing wide spread distribution of compounded drugs."

Justice Sandra Day O'Connor wrote the majority opinion in the case, Thompson v. Western States Medical Center, No.01-344. The case had been brought by eight licensed pharmacies, each of which specialized in compounding particular types of drugs. Justice O'Connor stated: " If the First Amendment means anything, it means that regulating speech must be a last-not first-resort. Yet here it seems to have been the first strategy the government thought to try."

Direct-to-consumer advertising is becoming a bigger and bigger element in the sales growth of the drug companies. Because of the dearth of new products introduced by the drug companies over the last few years, coupled with the loss of patent protection for many of the blockbuster drugs, this will continue to be true for the next few years. According to Robert Ehrlich, a consultant and founder of DTC Perspectives, a trade magazine, spending on such ads "pays back from $1.30 to $4 and change per dollar invested."

The FDA has announced three new proposals in regards to consumer advertising and the health industry. One of the proposals dealt directly with the matter of direct-to-consumer ads, which first became legal in 1997. The proposal would require that all direct-to-consumer ads for prescription drugs contain language that the consumers can understand better. It would also require that the adverse reactions be printed in larger type.

Under the proposal, drug companies would not have to print all the technical details that come from a drug's label for physicians. The new proposal urges the drug companies not to use "technical, scientific terms or jargon." The ads would have to contain all of the warnings, contra-indications and major precautions. The ads would require the listing of only between 3 and 5 of the less serious adverse reactions that happen to people who use the drugs.

The second proposal dealt with ads that educate consumers about diseases and health problems without promoting a particular drug. The third proposal dealt with ads for medical devices.

Meredith Rosenthal at the Harvard School of Public Health reported in The New England Journal of Medicine that the pharmaceutical industry spent roughly $15.7 billion to market its drugs in 2003. Of that amount about $4.8 billion was dedicated to detailing individual physicians. Studies have shown that on average physicians meet with pharmaceutical representatives about four times a month.

The FDA announced that it would propose changes to its guidelines governing direct-to-consumer drug ads within the next month. Analysts think that these changes would involve a reduction in wording, and change in the format for adverse side reactions that are required in print media ads. In all likelihood a boxed summary of side effects would have to be included in print media ads instead of the extensive wording for adverse side reactions that the regulations now require.

According to the latest statistics available from TNS/Media Intelligence/CMR, part of Taylor Nelson Sofres, which covers the year 2002, the drug industry spent $2.4 billion on print media ads. Because of the lack of truly new medications that are due to come to market in 2004, most of the drug companies have indicated that they intend to increase their spending for ads, so that they can increase their sales for their existing drugs. It may even reach the point where you will see generic drug companies doing direct-to-consumer ads for some of their better selling products.

Google announced that it would stop running ads from Internet pharmacies that sell prescription drugs in violation of the U.S. drug laws. Thus Google became the third of the major search engines to stop taking such ads. It joins Microsoft Corp.'s MSN and Yahoo in cracking down on the ads from online drug companies. With the passage of the new drug law by Congress, this in effect means that they will not accept ads from any overseas pharmacy except from those licensed in Canada. The law allows only the re-importation of drugs from Canada if the Secretary of Health and Human Services attests to the safety of the drug. Secretary Tommy Thompson has already announce that he would not be willing to make such an attestation at this point

Novartis, the Swiss drug maker has announced that it intends to increase it advertising budget to promote more of its new and already existing drugs through direct-to-consumer advertisements. Novartis has introduced 11 drugs, which is more than any other drug company since 2000. Its biggest selling drug is Diovan, a blood pressure pill that competes with Merck's Cozaar. The company hopes to achieve over $4 billion in sales for the drug in the next few years, and according to Thomas Ebeling, the chief executive of the drug division of the company, direct-to-consumer ads will be the driving force behind the expected increase in sales.

The company spokesman went on to show that sales of two of its leading drugs, Zelnorm, a drug for irritable bowel syndrome, and Elidel which is an eczema medication rose sharply whenever the company promoted these drugs through direct-to-consumer ads. According to Mr. Ebeling: "There's a big opportunity for consumer awareness campaigns."

Sadly we say that when one drug company decides to markedly increase its advertising budget the other big drug companies will also follow suit in order to remain competitive. On the other hand you will not see their R&D budgets increase proportionately to the increase in their advertising budgets.

Direct-to-the-consumer ads is being extended another step as is shown by the battle going on between the medical device makers Stryker Corporation and Zimmer Holdings. Stryker has been featuring the famous golfer Jack Nicklaus, who had hip replacement surgery, featured in their ads on television promoting their new hip replacement device. The new device made from ceramics and titanium sells for $4,000 to $5,000.

On the other hand Zimmer has placed ads in Time and Newsweek, featuring an older woman on a swing. The ads talk about the advantages of having minimally invasive hip-replacement surgery as developed by Zimmer. The surgery requires use of the Zimmer device and instruments. The market for hip-replacement devices is estimated to have reached $2.6 billion worldwide last year. About 300,000 hip-replacement surgeries took place in this country last year.

Recently DePuy, a Johnson & Johnson subsidiary ran television ads for its knee-replacement devices in Phoenix and West Palm Beach, Fla. Medtronic took another direction for advertising by placing ads in the rest rooms in dozens of restaurants in Minneapolis and St. Paul for its implantable device to relieve incontinence.

The FDA requires strict advertising rules for drug advertisements, such as the inclusion of negative side results in the ad. There are very few rules that apply to the device makers, so it is more or less a free for all as far as ads go in the device maker area. Only ads for the riskiest devices, such as pacemakers and artificial hearts require negative side results to be included in the ads.

The Stryker television ads do include a statement that "surgery involves potential risks and recovery time." The Zimmer media ads include no information on risks other than advising that a hip replacement involves surgery and a period of time for rehab. Advertising for medical devices is also regulated by the Federal Trade Commission, which simply requires that companies not to make face or deceptive claims.

Proctor & Gamble began advertising its generic version of AstraZeneca's heartburn medication Prilosec on September 1, 2003. Johnson & Johnson-Merck Pharmaceuticals Co., a joint venture of J&J and Merck & Co. that produces a rival heartburn drug Pepcid, sued P&G for falsely advertising that Prilosec OTC treats heartburn with one pill.

A judge in the U.S. District Court of New York issued a temporary injunction to stop the P&G advertisement. P&G's advertisement stated: "1 pill, 24 hours, 0 heartburn." The joint venture's lawyers allege that the OTC version of Prilosec treats heartburn with 14 pills not 1 pill and thus the advertisement was false advertising.

The label for Prilosec OTC instructs consumers to take it "once a day (every 24 hours), every day for 14 days." The district court judge ordered P&G to adjust its advertising and to file a report within 30 days to the joint venture and to the judge. The joint venture has to post a $5 million bond to cover P&G's costs if the ruling is overturned. P&G will appeal the ruling but at the same time it will adjust its advertising till the matter is resolved. P&G will also change its ad to read "1 pill a day, 24 hours, every day for 14 days."

Novartis is removing its television advertisements for Lamisil, its toenail fungus treatment, after the FDA objected that the ads overstated the medicine's effectiveness. Lamisil is Novartis' fourth-biggest selling drug, garnering over $416 million in sales for the first 6-months of 2003, up 19% from 2002. The drug competes mainly with over-the-counter products that do not advertise.

The ad shows a cartoon battle between a giant Lamisil pill and a monster, nicknamed Digger, who represents a toenail infection. In a letter to the company from Jennifer Murphy, an FDA consumer promotion analyst the fact that the cartoon may distract the viewer from the voice-over listing the risks of the medicine. The animated battle also suggested that Lamisil works all the time, although studies show it is completely effective in only about 38% of patients.

Mark McClellan, commissioner of the FDA disclosed at a speech that his agency would soon finalize an agreement with the SEC to share more information, and punish drug companies that mislead investor with false information in connection with discussion that they are having with the FDA. At that same meeting Dr. McClellan revealed that his agency is requiring Bristol-Myers Squibb Co. to run ads correcting exaggerations it made in a print campaign for Pravachol, its cholesterol drug. Bristol is also having an internal investigation in connection with a subpoena it received as to whether or not it was giving the correct information in connection with the "average wholesale price" data that it supplied to Medicare and Medicaid.

The FDA warning letter that it issued to Bristol was the third one so far in connection with misleading advertising in connection with Pravachol. For the first 6 months this year, the drug has garnered $1.3 billion in worldwide sales. The ads in question erroneously said the drug is the lone medicine approved to prevent strokes in patients not diagnosed with coronary heart disease and in diabetics. Pravachol's stroke-prevention approval is only for patients with coronary heart disease. Merck's Zocor is the only cholesterol lowering medication that is approved by the FDA in connection with strokes.

The FDA has issued another warning latter to Allergan Pharmaceutical Co. in connection with its advertisements for its drug Botox. The warning was issued because the ads minimized the drug's risks and promoted it for uses that it had not been approved for. The FDA first approved Botox in 1989 for the treatment of crossed eyes and uncontrollable blinking.

The ads identified by the FDA state that " more than half a million people have already been wowed by Botox Cosmetic, America's most popular cosmetic treatment." The FDA said that this type of ad does nothing to point out the risk of the drug. The ads also say that the drug is approved for the treatment of "frown lines" when its cosmetic approval is limited to the temporary improvement in the appearance of "moderate to severe glabellar lines" or the vertical lines between the brows. This was the second warning letter that the pharmaceutical company has received from the Center for Biologics Evaluation and Research of the FDA.

According to the latest figures the drug companies spent $2.6 on advertising directly to the consumer last year. Much of this money has gone to promote medications that are new high cost variations on older drugs, or even on the next generation of drugs whose patent has expired. Secretary of Health and Human Services Tommy Thompson brought this point home when he condemned any physician who prescribed Nexium for his patient.

Prosecutors have filed a brief in support of Dr. David P. Franklin's "whistle blower" lawsuit against Warner-Lambert in connection with his suit alleging illegal actions by the drug company to promote the "off-label" sales of the drug Neurontin. The U.S. attorney in Boston, Michael J. Sullivan asserted in the brief that Dr. Franklin's lawyers had "presented evidence of an illegal off-label marketing scheme that is rife with false statements and fraudulent conduct." Warner-Lambert was taken over by Pfizer Inc. in 2000.

In his brief Mr. Sullivan also alleged that Warner had invited doctors to some continuing medical education sessions in which the company claimed it would present unbiased information about Neurotin. These classes were however massive promotional sessions to promote Neurotin for pain relief and were planned not by independent experts but by Warner-Lambert employees. David Westerbury, assistant attorney general for Washington State, said in a court filing in this case that he was leading the investigation by 47 states into whether or not Pfizer Inc. made illegal payments to doctors who have Medicaid patients.

Corporate documents that were made public showed that Warner focused it attention on respected doctors in major teaching hospitals who would serve as "Neurontin champions." Dr. Steven C. Schachter, a professor at Harvard Medical School and a physician at Beth Israel Deaconess Medical Center in Boston received $71,477 from May 1994 to September 1997 to speak to other doctors about off-label usage of Neurontin. Dr. B.J.Wilder, a former professor of neurology at the University of Florida received more that $300,000 for speeches given from 1994 to 1997. Six other doctors, including some from top medical schools received more than $100, 000 each.

Documents in the lawsuit disclose that a marketing campaign by Cline Davis & Mann, a Manhattan advertising firm, laid out a "tactical plan" with detailed strategies to increase "off label" sales of Neurontin for uses such as pain management, psychiatric disorders, migraine headaches and a condition related to diabetes. Newly filed court papers show that Warner hired Scott-Levin, a health industry consulting firm in Newton, Pa. was hired by Warner to track what its sales reps were saying to doctors. In performing surveys of doctors after visits from its sales representatives Scott-Levin found a substantial number of them increased their prescribing of Neurontin.

Dr. David P. Franklin, a former Warner-Lambert employee as a so-called "whistle-blower", brought the civil lawsuit in the Federal District Court in Boston in 1996. Warner-Lambert was the parent company for Parke-Davis, and it in turn was taken over by Pfizer in 2000. Details of the case did not come to light until recently because the case was kept under court seal until this past March. The newly released documents include a 1996 report written by the Cline Davis agency for Parke-Davis called "Neurontin War Games". Dr. Franklin was employed by Parke-Davis as a medical liaison in 1996 and at that time he alleges that he was trained to "cold call" doctors and to push Neurontin for "off label" usage at that time.

Many drug companies use medical liaisons, who often have medical or science degrees to answer doctor's technical questions but they are not supposed to introduce "off label" information to the doctors to whom they are speaking. Neurontin accounted for almost $2.4 billion in sales for Pfizer last year, with about 78% of that total coming from "off label" usage in 2000. Dr. Franklin worked for Warner-Lambert for 4 months before deciding to retire because of the improprieties that he felt was ongoing in the company.

Dr Franklin also alleged that doctors allowed the Warner-Lambert detail person to be in the examining room with the physician. It is further alleged that the detail person encouraged the doctors to recommend Neurontin for "off label" usage, including pain, bipolar disorder and attention deficit disorder in children.

According to Dr. Franklin's attorney, Thomas Greene, Warner-Lambert's marketing executives urged their superiors to let them promote the drug for off-label uses. It is further alleged that the marketing people urged this usage even though they were well aware that no clinical trials had been performed to prove that the medication was safe for off- label usage.

Mr. Greene cited two memos in support of his position in the case. In a memo dated June 26, 1995 a marketing executive at Warner-Lambert said that in the Northeast, doctors who attended educational dinners that were held where Neurontin was the featured drug, wrote 70% more off-label prescriptions for the drug than doctors who did not attend.

In a memo dated May 5, 1997 the marketing department proposed that Neurotin be promoted to treat pain in diabetic patients by creating education classes for doctors and sponsoring a symposium with the American Diabetes Association. Dr. Franklin stated that one of the reasons why he resigned from Warner-Lambert was because he felt that the company was involved in an illegal campaign to market Neurontin even though the safety of the drug had not been proved for these off-label purposes.

Dr. Franklin further alleged that Warner gave financial incentives to hundreds of physicians to prescribe Neurontin for unapproved uses, by inviting them to dinners and weekend trips to resorts. Doctors were paid to speak about Neurontin and encourage its usage for off-label purposes. It is alleged that each doctor was paid $350 or more for each day they let sales people watch as they examined their patients. The federal investigation alleges that Medicaid paid many millions of dollars for Neurontin prescriptions written for unapproved uses.

It is also alleged that Warner-Lambert hired two marketing firms to write articles about the unapproved uses of Neurontin and find doctors willing to sign their names to the articles as the authors thereof. The marketing firms were allegedly paid $12, 000 for the articles and the doctors were paid $1,000 for signing the articles as the authors of the pieces. 

In its 10-Q filing with the SEC, Pfizer Inc. had disclosed that the marketing and pricing of two of its drugs have drawn the scrutiny of federal and state investigators in the last several months. The drugs involved are Lipitor, the cholesterol lowering drug and Neurontin, which is a drug used in connection with epilepsy which was developed and marketed by Warner-Lambert before Pfizer took it over. Neurontin has been approved by the F.D.A. for the treatment of epilepsy, but has been prescribed by many physicians for off-label usage.

Pfizer has admitted that over 78% of the prescription that were written for Neurontin in 2000 were written for off-label uses. Sales of the drug are expected to reach over $4 billion this year. As a matter of fact the writer of this article has been using Neurontin as prescribed by one of my doctors in connection with the treatment of the inflammation and pain in sural nerve in my lower left foot. This problem arose in connection with the spinal stenosis that I wrote about in the article "Spinal Stenosis-A Personal Saga". I was never informed by my doctor that this was an "off label" usage of the drug, but so far I have had no adverse reactions from using the drug.

WJMK, a Boca Raton, Fla. production company had hired newscasters Aaron Brown of CNN, and Walter Cronkite, the former CBS News anchor, to serve as the hosts of a program called the American Medical Review. WJMK hired the two newscasters to replace Morley Safer of the CBS program "60 Minutes" who had worked for them for four years. Safer had left the employment of WJMK when he realized that the job was not consistent with the network's standards for newscasters. After the NY Times published an article by Melody Petersen, entitled "A Respected Face, but Is It News or an Ad?", Mr Aaron withdrew from the arrangement and Mr. Cronkite also followed suit.

It turned out that drug companies and other health care companies pay WJMK about $15,000 to have their companies or products featured in the videos that seemed to show the newscasters in a news setting rather than in an advertising setting. The videos ran for between two to five minutes long and ran between regular public television broadcasts.

Although Mark Kielar, the president of WJMK said that the videos were educational and not promotional no mention was made of the companies that paid WJMK to produce the videos. Several of the companies that were contacted by the reporter stated that they were told that they could have any promotional material they wanted be included in the program. Under regulations that cover public broadcasting such sponsorship would be required to be disclosed under the law.

The FDA has undertaken a survey of doctors to try and determine the effect of advertising on doctor's prescription drug writing habits. In announcing some of the preliminary results, Janet Woodcock, head of the FDA stated that most of the time, when a patient asks for a specific drug that they saw in an ad, the patient would get that drug.

The survey encompassed over 500 physicians. Of the about 59% of the physicians who recalled being asked for a specific brand-name drug, about half prescribed that drug according to Dr. Woodcock. Only 40% of the doctors believed that their patients understood the possible risks and side effects of the drugs based on the ads. Direct-to-consumer ads were first made legal in 1997. Last year direct-to-consumer ads accounted for about $2.7 billion in drug ads, a threefold increase since 1997. Fifty nine percent of the physicians said that having seen a drug commercial added no benefit to a patient's subsequent doctor visit.

Investigators from the General Accounting Office estimated that at least 8.5 million Americans each year request and receive prescriptions for specific drugs after seeing or hearing advertisements for these products. According to Senator Susan Collins (Rep-Me) who was one of the five senators who requested the report, " The evidence suggests that consumers are paying a lot of attention to these ads, so it's imperative that they be accurate. If the increase in utilization is based on false claims, that's very troubling."

The report went on to say that the deceptive ads run their course before the FDA can undertake any action. Many ads are on the air or in print for only a short time. About one-fifth of the ads are on the air for only one month, and about one-third of the ads are on the air for less than two months. The accounting office stated that recent changes in the procedure to issue the letter of admonition by the Bush administration had "adversely affected" the government's ability to curb deceptive practices. Some companies "have received multiple regulatory letters over time for new advertisements promoting the same drug."

The report went on to further state that the drug companies spent much more on research and development then they did on advertising. Last year the companies spent $30.3 billion on research and development and $19.1 billion on all promotional activities, including $2.7 billion on direct-to-consumer ads. As we point out however the drug companies make much more in net income than they spend on R&D. As the report also points out, the ad spending rate is increasing at a far greater rate than is spending for R&D.

As part of its investigation as to the effect of direct-to-consumer advertising the FDA announced it would pay about 500 doctors, randomly culled from an American Medical Association list, anywhere from $50 to $100 to answer a 15-minute telephone survey. The FDA felt the payment was necessary because it found that doctors are not that anxious to participate in governmental surveys of the industry.

Of the 500 doctors selected to participate in the survey, about 250 are general practitioners and the other half are specialists in medical conditions that are particularly targeted by direct-to-consumer ads. About 1000 patients will also be included in the survey but they will not be compensated for participating in the study.

The FDA had announced several months ago some other preliminary findings of its surveys in connection with the advertising question. One survey involved telephone interviews with 943 adults who had visited a doctor during the previous three months. About 5% of the patients surveyed said that a direct-to consumer ad had sparked the visit, and 4% said they visited the doctor because they wanted to get the advertised drug.

The survey found that 69% of the doctors gave their patients the specific pill that the patient had requested. In only 6% of the cases was no medication whatsoever prescribed for the patient when the patient requested the advertised drug. When a patient asked about any pill in general, only 41% of the requests were approved. The survey also showed that doctors recommended over-the-counter medication in only 13 % of the cases where a direct-to-the-consumer advertised medication was requested.

The FDA has announced that it will begin a review of its direct-to-consumer ad policy to see if drug ads "confuse consumers and adversely impact the relationship between patients and their health-care providers." The commission will be conducting two surveys to help it decide whether the 1997 guidelines, which were finalized in 1999, should be changed, rescinded or kept in place.

Nancy Ostrove, an official with the FDA's Division of Drug Marketing, Advertising and Communications, says the agency is especially interested to learn if "inappropriate prescribing" is going on, leading to "people getting drugs they shouldn't be getting." According to IMS Health and Competitive Media Reporting spending on TV ads for prescription drugs has more than quadrupled from $220 million in 1996 to $1.13 billion in 1999.

Pfizer Inc. announced that it had settled an investigation into the advertising for its anti-biotic drug Zithromax. The investigation was led by Hardy Myers, the attorney general of Oregon, and included the attorney generals from 19 states. The investigation centered on the alleged misrepresentation by Pfizer as to the effectiveness of Zithromax in treating ear infections in children. The allegations also included one in which Pfizer failed to disclose the risks of overusing antibiotics.

Under the agreement, Pfizer will pay the 19 states $4 million for the cost of the investigation and legal fees. Pfizer will also finance a $2 million public service campaign over the next 3 years to tell parents that antibiotics cannot be used to treat an ear infection that is caused by a virus. Incidentally we see herein-another example of incorrect usage of an antibiotic to treat a virus. This is just another example of overuse of antibiotics that are helping to make them useless in the battle against bacteria.

Pfizer had promoted Zithromax for children's ear infections by creating a fictional mascot, Max a zebra. Zithromax sales representatives have handed out small plastic zebras that doctors hang from their stethoscopes. The company even donated a zebra to the San Francisco zoo which they named Max. Sales of the drug brought in more than $1 billion in 2002. It was also alleged that Pfizer claimed that Zithromax could be used to treat ear infections with fewer doses over fewer days than a rival drug.

As an interesting development in the area of advertising and prescription drugs, the consumer advocacy group Prescription Access Litigation project announced that it was suing Pfizer (Pharmacia) for false and deceptive advertising. The matter in question involves Pharmacia's advertising campaign for Bextra. The complaint alleges that Pharmacia is telling doctors that Bextra alleviates acute pain even though the FDA refused to approve Bextra as an acute-pain cure.

A study published by the New England Journal of Medicine in 1998 reviewed 70 medical journal articles that discussed calcium channel blockers and found that 96% of the authors who supported the drugs had financial relationships with the drugs' makers. A 1995 study showed that diuretic use declined to 27% from 56% of the anti-hypertensive prescriptions between 1982 and 1992.

The National Heart, Lung and Blood Institute (NHLBI) paid $85 million for an independent study that was conducted on 42,418 patients aged 55 and older who had high blood pressure and at least one other risk factor for heart disease, such as diabetes or cigarette smoking. Dr. Claude J.Lenfant, the director of the NHLBI undertook the study in 1994 in order to try and ascertain which of the over 100 marketed antihypertensive drugs were best suited to deal with high blood pressure.

The study found that a diuretic, chlorthalidone, was more effective in preventing fatal and nonfatal heart attacks than were three other classes of drugs: amlodipine (sold as Norvasc, a calcium channel blocker; lisinopril (Zestril and Prinvil), an ACE inhibitor; and doxazonsin (Cardura), an alpha-adrenergic blocker. Diuretics are generic drugs sold by companies that do not spend money on marketing. The diuretics have lost their patent protection, so the brand name drug companies do not actively market this drug.

In 1999, researchers at the Massachusetts General Hospital reported that calcium-channel blockers were the most heavily advertised drug in the New England Journal of Medicine in 1996, while there were no ads in there at all for the diuretics. Analysts feel that the drug makers will continue their spending on their drugs that deal with hypertension as additional treatments for heart patients who need more than one drug to control their blood pressure.

According to the results of a study done by Datamonitor, a marketing analysis firm, the 14 top drug companies generated $17 in sales in 2001 for each dollar that they spent on marketing in this country, down from $22.20 for each dollar that they spent in 1998.

The report went on to further indicate that promotional spending in the U.S. by these largest drug companies increased at an average annual rate of 32.4% from 1998 to 2001. On the other hand the industry's annual increases in research and development increased by 8.2% in 1999 to 16.6% in 2001 according to data from PhRMA, the industry's trade association.

The drug industry spent over $9 billion on direct marketing to consumers and to health professionals according to the Datamonitor study. Datamonitor recommended that either the industry should reduce its promotional spending, or find more effective ways to spend its money. In France and England, marketing spending fell at an annual rate of around 4% from 1998 to 2001. From August 1997 through August 2002, the FDA issued 88 letters accusing drug companies of advertising violations. 44 of the violations were for broadcast advertisements, 35 for print ads and 9 that cited both types of ads.

We have been writing about the pharmaceutical companies complying with the requests from the FDA to stop what the agency considers false and misleading advertising, but what happens if the company refuses to comply with the request? Allergan Inc., an Irvine, Ca. drug company received such a request from the FDA in connection with its advertisements for Botox Cosmetic, a product that is used for the removal of wrinkles.

According to Christine Cassiano, a company spokeswoman, the company said "we are not intending to pull any of the material and wasn't "currently changing any" of its advertising material. She further stated that the FDA's criticisms are "factually incorrect and taken out of context."

Botox was approved for use in 1989 to treat eye-muscle disorders, but gradually it became more widely used for "off label" purposes such as cosmetic uses. A product can not be advertised for "off label" uses. In April, the FDA approved the injection of Botox to temporarily improve the appearance of moderate to severe frowns. Botox has the ability to smooth wrinkles by relaxing muscles, but the effect lasts only for several months at most.

The company said it has plans to spend about $50 million in 2002 for it marketing of the wrinkle removal treatment. The FDA objects to the company's ads which refer to Botox's ability to "reduce your toughest wrinkles within 7 days." The FDA said that its approval of the treatment stated that it was good for the temporary removal of wrinkles. The FDA complaint that the ad "strongly suggest that the product is intended to treat the signs of aging."

If there were no agreement on this matter between the FDA and the company, the first step for the FDA would be to send a "warning letter" to Allergan. If Allergan does not comply with the warning letter, the FDA will take them to court, so that the court can issue and order making the company comply with the FDA request.

For the fourth time since 1998, the FDA has told Pfizer Inc. to stop running misleading ads in connection with its cholesterol lowering drug Lipitor. Once cited, most drug companies usually comply with the FDA request. Pfizer said it had already complied with the request. The most recent ad episode for Lipitor occurred in the fine-print section that details potential risks and side effects. The Pfizer ads, which appeared in several top selling magazines, indicated " that Lipitor may lack the side effects of other members" of the class of drugs known as statins. Liipitor agreed to change the wording in the ads.

In the ads cited by the FDA, Pfizer indicated that other statins had potential risks but not Lipitor. The ad stated that the risk of a type of muscle deterioration " has been reported with other drugs in this class." The package insert for Lipitor states that the muscle-deterioration condition has been reported with atorvastatin and with other drugs in this class." Atorvastatin is the chemical name for Lipitor. A Pfizer spokeswoman said that the inconsistency between the ad and the package insert was corrected immediately.

A report from the Washington based consumer health organization Families USA takes issue with the drug industry's claim that present day drug prices are needed to sustain its research and development expenses. To view the report entitled "Off the Charts: Pay, Profits and Spending by the Drug Companies" in its entirety see:

"Most pharmaceutical companies make considerably more in net income than they spend on R&D. Indeed, the pharmaceutical industry continues to be the most profitable U.S. industry, with profit margins in 2000 nearly four times the average of Fortune 500 companies." The report also discusses the pay and compensation level of the top executives of some of the drug companies. According to the report "All of the nine U.S. pharmaceutical companies that market the top-selling 50 drugs for seniors spent more money on marketing, advertising and administration than they did on R&D." According to the report the percent of revenue allocated to marketing/advertising and administration compared to percent allocated to R&D is as follows:







Pfizer Inc.









Abbott Labs






Ely Lilly






Allergan, Inc.



As you can note from the above, 8 of the 9 companies spent more than twice as much on marketing, administration and advertising as they did on R&D.

When we examine some of the figures from some of the individual drug companies in regards to the increase in the percentage of their revenues spent for marketing and administrative costs we see that it far exceeds the percentage spent on research. In the year 2000 GlaxoSmithKline spent 37.2 % of its revenue on advertising, marketing and administrative costs versus the 13.9% spent on research. Bristol-Myers Squibb spent 30.4% of its revenue in 2000 on advertising, marketing and administrative expenses versus spending 10.6 per cent on research.

Although we have researched and written a great deal about the issue of advertising and the drug industry there are always some interesting new facts that come to our attention. Melody Petersen's article in the November 23, 2002 issue of the New York Times contained several interesting factual items in connection with this issue.

She states in the article: " A 1998 survey of named authors writing for some of the nation's top journals, including The Journal of the American Medical Association, which published the survey, found that 11 percent of the articles had been ghostwritten." She went on to state that "just $2.8 billion of the $11.8 billion the drug industry spent on marketing was aimed at consumers; the rest paid for everything from dinner meetings with doctors to sales calls and medical education, according to Verispan, a health-care information company." She concluded the article with the statement: " In Washington, the FDA's new chief counsel, Daniel E. Troy, who fought restrictions on drug promotion as a private lawyer, is leading a review of regulations that could relax existing limits on behind-the-scenes marketing of drugs."

Ad agencies owned by drug companies are playing an ever increasing role in direct-to-consumer (DTC)) ads. DTC ads for prescription drugs were first allowed in 1997. Pharmaceutical companies spent about $2.8 billion on consumer ads for prescription drugs in 2001, which represented about an 8% increase from the spending in 2000. The industry spent about $30 billion in R&D in 2001 up from about $26 billion in 2000.

CommonHealth, a division of the London based WPP Group ad agency is spending about $70,000 on an ad campaign defending the drug industry and its right to have DTC ads. The Prescription Access Litigation project, a coalition of law firms and public interest groups brought the first lawsuit against a drug company in connection with DTC ads. The suit was brought against Schering-Plough Corp. and CommonHealth for using deceptive ads in connection with the anti-allergy drug Claritin.

Vanessa O'Connell wrote and interesting article in the Wall Street Journal entitled "Agencies Join in Drug Development". In her article she wrote "…agencies are helping drug companies recruit patients for clinical trials and are even conducting medical experiments in agency-owned labs." She went on to further state that "According to PhRMA, the industry trade group, drug companies invested an estimated $30.3 billion in research and development last year. For an agency, getting involved early in the process can be lucrative on its own but can (also) greatly increase the chance of getting the account if the product ultimately comes to market. For the drug maker, agency involvement can shorten the costly process of getting a drug form development to market."

Some of the big agencies have marketing labs known as "contract research organizations" which operate independently to test the chemical compounds on patients and keep track of the results. Omnicon owns a 20% stake in Scirex, a clinical research organization that specializes in mental and neurological experiments for drug companies. It bought Matthews Media Group Inc. in 2001, a company that specializes in recruiting patients for clinical trials of drugs.

In determining drug company costs for marketing of drugs, an area of concern that has grown to a great degree in the last several years is the role of the pharmaceutical companies in the medical school education process. Many medical schools require students to attend drug company presentations or conferences that are paid for by the drug companies. Critics complain that these sessions are used to push the drug company's products. The drug companies often do not get involved directly in these sessions, but instead use medical-education service suppliers to get their message across.

In a survey of 42 medical-education service companies 76 % of their clients were drug makers, and 45 % of their revenues were attached to the presentations or conferences held in conjunction with medical school events. A consumer group named the Public Citizens has complained to the Accreditation Council for Graduate Medical Education, which is a body that reviews the nation's medical-residency programs. The accreditation council's executive board plans to discuss the issue at their September meeting.

The letter from the group alleged that they were "anxious to make sure medical students and residents are trained in environments that have high professional standards". According to Mariana Daniels the executive vice-president for CPE Communications, a unit of Donahoe Purohit Miller in Chicago, a medical education services provider, the sessions present educational materials about the product of the sponsor and its competitors.

The financial section of Sunday's New York Times dated August 27, 2000, contains an article entitled " What's Black and White and Sells Medicine" by Melody Petersen. The article describes how Pfizer, Inc. has become a marketing machine on a scale comparable to a Proctor and Gamble. Through the usage of plastic and stuffed zebras, and other marketing techniques the company has made Zithromax a billion-dollar drug in just a few years. The drug is an antibiotic that has been used extensively for children even though federal officials have stated the other antibiotics were better and cheaper. Pfizer spent about $193.4 million last year on direct to the consumer advertising, and when you combine that sum with the spending of Warner Lambert of $63.8 that makes the company the number one spender in the direct to consumer market.

The issue of advertising and prescription drugs has entered a new arena, namely cyberspace. According to a study from Jupiter Communications, the New York research firm, 90% of the drug companies plan to increase their advertising spending on the Internet, with 20% of them indicating that they would double their spending in the next year.

As a further indication as to what will be occurring, the advertising agency holding company Omnicom Group announced that they would be taking minority stakes in five health-care-related Internet companies. Omnicom is the holding company for several companies including BBDO Worldwide and DDB Worldwide. Two of the sites are aimed at consumers; Healthology Inc, and Caresoft Inc., which runs the consumer site Two of the other sites are aimed at physicians, namely Inc. and Inc. The fifth site eResearchTechnology Inc is a clinical-trials site where drug companies can better track tests of new medications.

Tom Harrison, chief executive of Omnicom's diversified services division felt that the pharmaceutical companies would be more inclined to come to Omnicom's database derived from visitors to the sites, which he says will help companies "fine tune their promotions" aimed at doctors and patients.

Up until now the drug companies have set up separate sites to promote their brand drugs. Of the estimated record $1.8 billion that drug companies spent on advertising in 1999 less than 1% was spent on Web sites. The approach that the drug companies will be taking means that they will be putting much greater emphasis on selling their drugs through advertising on "independent" Web medical sites. Once again we are faced with the issue of increased cost to the consumer for the increased spending that will be taking place in the coming years for cyberspace advertising. What if any rules should be set up in regards to what the ads can or can't say on the Web sites? Another question that will arise in connection with these Web sites will be the issue of privacy.

Even though generic drugs filled 41% of all prescriptions sold, they accounted for a mere 9% of the total cost spent on prescription drugs in 1998. Merck-Medco Managed Care, a subsidiary of Merck & Co. is now giving free samples of some generic drugs to doctors. This represents a novel approach for the generic drug industry, which normally has not been giving out free samples. IMS Health estimates that the drug companies gave medical professionals about $7.2 billion retail value of free drugs in 1999. GM Corp. has estimated that it would save $3 million a year for every one-percentage point increase in the use of generics.

We now see estimates that run as high as $13 billion a year as the total cost to the drug companies for the free promotional expenditures, advertising expenses, medical educational expenses, etc. We realize that marketing and promotion is a major expense for any company that wants to sell its products, but at what point do you call these expenses excessive?

The July 6th, 2000 edition of The Wall Street Journal had an interesting article re the drug companies and their advertising campaigns. It was entitled "Drug Firms, Stymied in the Lab, Become Marketing Machines". We cite the following paragraph from the article since it gets to the core of the problem very succinctly:

"In fact, the pharmaceutical industry is gradually shifting the core of its business away from the unpredictable and increasingly expensive task of creating drugs and toward the steadier business of marketing them."

In looking into the marketing area for prescription drugs we must look at both major aspects involved in this topic, and that is advertising and the use of free samples. According to IMS Health the drug companies gave out over $7.2 billion at retail of free samples to doctors and nurse practitioners. Please keep in mind that these free samples are for the newer drugs not for the ones that are about to go off of patent protection. The industry states that the free samples enables a patient to use the drug, before spending money on it, so that the drugs effectiveness can be judged by the patient, and also to see if the patient will have any side effects from using the drug.

The Food and Drug Administration regulations require that a doctor must sign for any free samples that he/she receives. Thus even if it is only for a minute or two, the salesperson will have a chance to discuss the drug with the physician. As of the latest figures there is 1 salesperson for every 10 doctors in this country.

Some insurance companies and HMOs will be instituting a free sample system of generic drugs to doctors to see if this will encourage the medical professionals to recommend generic drugs for their patients as well as brand name drugs. Listed below in the millions are the top 5 sample prescription drugs left in doctor's offices:

Claritin (now off patent)-Antihistamine-Schering Plough

35.7 million


18.5 million

Augmentin-Antibiotic-SmithKline Beecham

18.5 million


16.5 million


13.0 million

Source: IMS Health

The industry spends about twice as much for marketing and administration as it does for research and development. This year drug makers will spend $26 billion, or 20 % of revenue, finding new drugs and then winning approval for them. The industry utilizes about 70,000 U.S. salespeople costing nearly $7 billion per year. Prescription drug sales totaled in excess of $100 billion for the first time in 1999.

Merck & Co. has drawn the scrutiny of the FDA in connection with two of it ads for Vioxx and arthritis. Under FDA rules, when an ad mentions a drug's name and it benefits, it must also contain a statement about any of the adverse risks associated with the drug.

In the two Merck ads that are at issue in this matter, the Olympic figure skater Dorothy Hammill is featured along with the same mountain ice rink and the same theme song. One of the ads mentions Vioxx but not arthritis; the other ad mentions arthritis but not Vioxx. The running time of the two ads taken together is 45 seconds long. Merck contends that the two ads are separate and distinct ads, so that there is no requirement that need be met to mention the possibility of the adverse risks that the consumer of Vioxx is faced with.

The ad that mentions arthritis but not the drug in question is called a "help seeking ad", since the ad usually ends with the admonition to see your doctor and seek his help with the ailment. The ad that specifically mentions the drug is called a "reminder ad", since it mentions a drug's name, but does not detail its benefits or risks. The FDA said that if the ads ran back to back, they would be considered one advertisement, and could constitute a violation of the FDA ad rule.

October 10th, 2002 was National Depression Screening Day. Students at dozens of colleges, high schools and hospitals filled out questionnaires about sleep, weight loss or gain, feelings of hopelessness and thoughts about suicide and dying. If warranted or if requested by the student, he or she would be referred to an appropriate medical professional. The event has been underwritten by four of the largest manufacturers of anti-depressants. The four are Wyeth Inc. (Effexor), Eli Lilly & Co. (Prozac), GlaxoSmithKline PLC (Paxil), and Pfizer (Zoloft).

Wyeth has also undertaken a campaign to bring a mental-health educational forum to college campuses to increase student awareness of depression, and the medications that can be taken to help anyone with this condition. The 90-minute forum is called "Depression in College: Real Life, Real Issues." The program will feature free screenings for depression, and the speakers will include physicians, medical professionals, and professors.

Cara Kahn the star of the MTV reality show "Real World Chicago" will be the spokeswoman for the forum. Ms Kahn who is 23 years old, is a graduate of Washington University, and she started to take Effexor while she was a student at the University. As a matter of fact she has spoken about taking the drug on the TV show. Both Wyeth and Ms. Kahn declined to say how much she is being paid by the company for her appearances. According to Ms. Kahn, "In accepting the job, I really made it clear that I am not a walking commercial."

Wyeth said that the forum is meant to educate the students about depression, and not to sell pharmaceuticals. There will not be any ads or signage for Wyeth at the forum, although the company will be acknowledged as a sponsor of the event on a brochure.

The forum raises an interesting issue in that it can be looked at as one in which the issue of depression will be brought out into the open on the campus, or in fact, will it be used to "plug the drug". Will the adverse effects of the drug be pointed out, or will it be pushed back in the corner?

Judge Mairana R. Pfaelzer of the U.S. District Court of Los Angeles rescinded her earlier order that barred GlaxoSmithKline, PLC from advertising the antidepressant Paxil as "nonhabit forming". The ad restriction was sought in a lawsuit by about 35 Paxil users who contended that some patients experience withdrawal symptoms like nausea and insomnia when they stop using the drug.

Previously Judge Mariana R. Pfaelzer had issued an order effective September 1 that required GlaxoSmithKline to cease claiming in its ads for Paxil, that the drug is "non-habit forming". Paxil was the second best selling anti-depressant drug last year (sales of $2.6 billion in 2001), with Pfizer's Zoloft being the top selling anti-depressant in 2001.

In the lawsuit the plaintiffs allege that they suffered severe nausea and other psychological problems when they stopped taking the drug. The lawsuit is seeking to establish class-action status for the 35 plaintiffs in the case, and for everyone else who suffered dependency or withdrawal symptoms when they stopped taking Paxil. Prior to this suit the FDA had reviewed the Paxil ads and had agreed that the drug company could make the claim that the drug was "non-habit-forming".

The U.S. Justice Department had filed a brief in the case urging the judge to reconsider her decision to limit Glaxo from claiming that the drug is "non-habit forming". The government's brief claims that her decision was contrary to federal law, and that the FDA's allowance of the ad should be the controlling factor in the case. The brief goes on to claim that federal law should take precedence over the state of California law.

In her decision Judge Pfaelzer stated that she was not making any finding as to whether Paxil "is in fact addictive or induces dependency." She did however find that the plaintiffs "are likely to succeed in their argument that the ads were misleading and created inaccurate expectations about the ease of withdrawal from the drug. Glaxo's attorneys admit that a patient who stops taking Paxil can suffer "discontinuance symptoms" similar to what happens when a patient stops taking a medication. This however is much different than the "withdrawal symptoms" as alleged by the patients in this case.

The pharmaceutical industry is planning to expand its direct to consumer advertising by using a 24-hour-a-day TV network, which was recently launched to 50,000 hospital patients. The network hopes to be able to reach 22 million hospital patients by the year 2003.

Hospital patients are the captive audience that the Patient Channel hopes to entice, with the bulk of the advertising coming from the pharmaceutical industry. According to the Nielsen-Media Research organization, the pharmaceutical industry spent $2.7 billion on advertising in 2001. According to Kelly Peterson, director of network marketing at the Patient Channel, the service allows big "marketers to directly associate their products with a particular condition in a hospital setting." The Patient Channel is owned by General Electric Co.'s GE Medical Systems.

Federal regulations require that a hospital educate patients about their condition. Thus instead of a hospital using a nurse to give the instructions to the patients the hospital might use the television program to do the educating of the patient. Many consumer advocacy groups fear that the ads shown in the hospital setting for the pharmaceutical products will leave the impression in a patient's thought process that the hospital is therefore recommending the drug being advertised.

The United Seniors Association committed $8 million to promote nearly two dozen House candidates who favored the Republican prescription drug bill passed by the House. The Association also had ads aimed at the Senate to pass similar legislation to the bill passed by the House on the matter. Most of the money will come in the form of a "general educational grant" from PhRMA. Another group advertising in favor of the industry's point of view is the 60 Plus Association. According to Ken Goldstein, a professor of political science at the University of Wisconsin, "The drug industry is once again on track to be the biggest industry-group spender in American elections."

In an interesting development in attempting to restrict the pharmaceutical companies direct-to-consumer advertising several states are in the process of passing legislation to deter the drug companies from having such advertisements.

In New York State, a bill in the assembly (A.6220) would amend the state tax law to eliminate the deductions for certain expenses incurred in the advertising of prescription drugs. The bill is presently pending in the Assembly Ways and Means Committee. A bill in California that would have disallowed any tax deduction for expenses incurred by drug companies to advertise their products died because of inaction in February 2002.

Hawaii passed and the governor signed legislation that requires drug manufacturers to report costs of advertising and marketing of prescription drugs in the state in an annual report. In Kentucky a resolution is pending (B.R.433) in the Senate Judiciary Committee that would urge the U.S. Congress, the Department of Health and Human Services, and the FDA to limit or ban advertising directly to consumers.

AARP has launched a new $10 million advertising campaign aimed at increasing the public's awareness as to generic drugs, and also to make people more aware as to the side effects of the drugs they are taking. Please keep in mind that Bill Novelli, who is the new head of AARP, led the advertising campaign against tobacco usage 6 years ago.

Mr. Novelli acknowledged that the campaign by AARP is little more that a "drop in the bucket" compared with the $2.5 billion spent by the pharmaceutical industry on direct-to-consumer ads. One of the ads will state: " Do not let advertising sell you on drugs you don't need." Two trade groups, the National Association of Chain Drug Stores and the American Pharmaceutical Association, which represents pharmacies, will help AARP in the campaign with counter displays and pamphlets.

Celebrity advertisements for certain drugs have come into the limelight lately. Rob Lowe, the actor from the television hit show "The West Wing" has starred in an ad campaign for Amgen Inc.'s new drug Neulasta, which is the next generation for its blockbuster drug Neupogen. The drug is used to treat neutropenic infections, which result from cancer chemotherapy's weakening the body's disease fighting white blood cells. Neupogen required daily injections while Neulasta needs to be administered every two to four weeks.

FDA rules state that if a particular drug rather than a condition is mentioned in a celebrity ad, the ad must state what the main side effects of the drug are, and also show where the consumer can find more detailed information via an 800 number or a Web site.

In its battle to try and retain sales for its new allergy drug Clarinex, Schering-Plough wants you to call them or visit their Web site for information on how to get a free seven-day sample of the drug. Clarinex is Schering's wild card in trying to replace Claritin's patent is due to expire on December 20th of this year. This free sample is worth about $15 retail.

In the same vein many brand name drug companies are offering free samples or through rebates for their drugs through free coupons. For Viagra, the promotion involves a six free pill sample worth about $50 retail; for Xenical a weight-loss drug the promotion involves buying a 3-month supply in return for which you get a free 3-month supply worth about $356. In the case of Prozac, the antidepressant drug you can get a one-month free trial package worth about $75. The offer allows only one per household and you must have a doctor's prescription in order to be able to get the drug.

In most of the cases where these offers are being made there is a generic version of the drug that is available at a cheaper price. In order to get the coupon you must be willing to answer several questions involving your personal medical history.

In order to find these offers you should go to the Web site of the brand name drug company. (Please see our article Drug Manufacturers Directory.) Check the site regularly because there is no definite timetable as to when these offers are made. Sometimes the site does not even mention the fact that by requesting additional information about a particular product, you may in fact receive a coupon in the informational package that you receive. Sometimes the coupons are sent to physicians so you should ask your doctor when he prescribes a particular drug to you, if he has any coupons issued by the manufacturer of the drug.

Centocor, a subsidiary of Johnson & Johnson, has been cited by several doctors for improper marketing in connection with its rheumatoid arthritis prescription drug Remicade. Centocor had a document on its website that stated that one of the "benefits" of prescribing Remicade was the "financial impact" on the physician's practice.

This situation arises because Remicade is covered under Medicare, since the drug must be administered intravenously in the doctor's office. Rick D. Anderson, vice-president of Centocor's immunology division stated that this document was outdated and inadvertently had remained on the company's website. The document in question is no longer on the site. Most of the drugs used to treat rheumatoid arthritis are in pill form. Enbrel is an injectible medication that is self-administered by the patient and therefore not reimbursed by Medicare.

In addition to the financial benefit that may accrue to the doctor, many physicians prescribe Remicade for their elderly patients, since Medicare does not cover most other medications. The cost for a full year's treatment of rheumatoid arthritis with Remicade comes to about $20,000, while a year's treatment with a generic drug such as methotrexate would cost about $400. 

A new facet in the debate about advertising and medicine has appeared in the on-line site Inc. that provides peer-reviewed reference material on disease to physicians. This site is partially owned by Seneca Investments LLC that is a joint venture formed by the ad agency Omnicom Group Inc.

The ads on the site are appearing in the middle of clinical papers, written by doctors and scientists about research work that they are doing. The American Medical Association specifically states that "Placement of advertising adjacent to editorial content on the same topic is prohibited."

Before direct-to-consumer advertising was made legal in 1997 there were 28 full time workers on the staff of the FDA's Division of Drug Marketing, Advertising and Communications. According to Thomas Abrams, who is director of this division there were 30 full time staff members in his division in 2001. This is in spite of the fact that the number of ads submitted for review increased more than 34% from 25,236 in 1996, to more than 34,000 in 2001.

On the other hand the number of citation letters alleging that ads or marketing material were false, misleading or otherwise out of compliance decreased from more than 150 in 1996 to 71 in 2001. According to the pharmaceutical industry the reason for the decrease in the number of citation letters was due to the fact that the industry learned how to advertise within the boundaries of the law.

GM launched a "Generics First" ad campaign in 2001 promoting generic drugs in e-mails, paycheck stubs and corporate newsletters. The company's cost for drugs under its health plan had risen 14% in 2001 over 2000 to $1.3 billion. Its pharmacy-benefits manager has been dropping off samples of generic drugs at doctor's offices. AARP is also promoting generic drug usage among its 35 million members. According to one drug-benefits company, Express Scripts Inc., drug costs for large employers have risen more than 16% annually since 1997.

In 2001 about 16.5% of retail drug purchases were paid directly by the consumer, according to NDC Health, a health care information company. The rest was paid for by the government or managed care. According to NDC the industry spent about $7.2 billion on their sales force, which is almost 2 1/2 times more than they spend on ads. The industry employs over 80,000 sales reps as of the latest figures available for 2001.

According to CMR the top advertised drug in 2001 in millions were as follows:



2001 ad dollars














































The results of a study from NDCHealth, a health care information company, show that Americans paid about $208 billion for prescription drugs in 2001. This was an increase of about 18 % over what we paid in 2000. The pharmaceutical companies spent about 6 % more on sales representatives, consumer advertising and meetings with doctors to promote drugs than it did in 2000.

The NDC results showed that total prescriptions written rose 6.6% to 3.3 billion in 2001. This is the equivalent of almost one prescription a month for every American. More than 7 million people took anti-depressants last year which was an increase of 700,000 people from 2000.

According to researchers spending for direct-to-consumer drug ads increased almost threefold from 1997 to 2001 to nearly $2.8 billion. The study was done at Harvard University and the Massachusetts Institute of Technology, and their report is entitled "Promotion of Prescription Drugs to Consumers". The results were recently published in the New England Journal of Medicine.

The study found that direct-to-consumer ad spending accounted for 15% of the spending to promote drugs in the U.S. in 2000 up from almost 9% in 1996. The year 1996 is an important year to look at because the law regarding direct-to-consumer drug advertising was changed in 1997.

The study concluded however that: "The initial surge in direct-to-consumer advertising preceded the 1997 guidelines...thus the 1997 guidelines may not have been the most important reason for the overall increase." In looking at the total of the print and broadcast ads, 60% were for just 20 medications. Total spending on prescription drug promotion grew about 70%, from about $9.2 billion in 1996 to $15.7 billion in 2000.

Television advertising saw an almost sevenfold increase in spending, to $1.6 billion from $220 million from 1996 to 2000. The researchers also reported that overall spending aimed at doctors, which included direct-to-consumer ads, free samples, medical journal ad spending, etc. slipped to 84% from 91% during the period from 1996 to 2000.

As part of its campaign to get users of Claritin to switch to Clarinex, Schering-Plough is now utilizing a "free 7-day coupon". The patent life for Claritin has expired so Schering is trying to get the consumers to switch to its newest anti-allergy drug Clarinex as quickly as possible. Schering has also announced that it would be switching Claritin from a prescription drug medication over to a drug that would be sold over-the-counter.

Clarinex won the FDA approval to tell patients that the medication helps cure year-round indoor allergies, which is something that Claritin had not been approved for. Pfizer's allergy drug Zyrtec is approved to treat both indoor and outdoor allergies, but Zyrtec isn't approved as a non-sedating antihistamine. Aventis's anti-allergy drug Allegra has not been approved for indoor approval.

For all of 2001 the most heavily advertised drugs in the U.S. were Celebrex (Pfizer) and Vioxx (Merck), each of which spent more than did Coca-Cola in advertising for the year. Celebrex replaced Vioxx as the most heavily advertised prescription drug in the U.S. in 2001, with Vioxx dropping into second place.

Quintiles reported that the drug industry had 81,600 sales representatives in 2001 an increase of 45 % over the number reported in 1998. Thus the increase in the percentage of sales representatives in the industry continues to grow at a much faster pace than the spending the industry is doing on research and development.

The Institute's research showed that consumer drug advertising increased by about 35% in 2000 to $2.5 billion up from the $1.8 billion spent on consumer drug ads in 1999. GlaxoSmithKline, the British drug company spent more on consumer advertising than any other company. It increased its consumer drug advertising campaigns spending to $417 million in 2000 which was a 40% increase over its spending in 1999. The 50 top selling drugs accounted for almost half the $20.8 billion increase in consumer drug spending last year, with the remainder of that spending coming from the 9,850 other drugs in the industry's arsenal.

According to an earlier study from the Institute 25 of the most heavily advertised drugs accounted for more than 40% of the increase in retail drug spending last year. While retail spending for prescription drugs rose from $93.4 billion in 1998 to $111.1 billion in 1999, the amount spent on consumer advertising rose from $1.3 billion in 1998 to $1.8 billion in 1999. According to these figures advertising expenses grew 38% while sales grew at only and 18 % rate. The study further stated that: "Mass media advertising of prescription medicines is heavily concentrated among a relatively few drugs, about 50". Steven D. Findlay, author of the report stated: "Our analysis suggests that consumer advertising could be responsible for 10% to 25% of the recent increase in prescription spending".

We all agree that it is important to make the public aware as to the deadly consequences of heart disease. Bristol-Myers Squibb has embarked on such a campaign, with stars such as Angela Bassett, Dana Carvey, Kirk Douglas and Sylvester Stallone appearing in magazine ads in the forefront of the campaign. These celebrities are volunteering their time in the ads, which will urge the viewers to take the "Pravachol Just for Your Heart Challenge". Nearly 1 million people died last year from cardiovascular disease.

In addition to the celebrity ads, Bristol embarked on another ad campaign, which features "Three Reasons To Ask How Pravachol Can Help Protect Your Heart". The ad includes a coupon that entitles the holder to a free 30-day supply of Pravochol, if the user is a new potential customer. The ad also highlights " High Cholesterol Isn't Just a Number. It's a Warning".

Bristol-Meyer's Pravachol is presently in third place among the statin drugs that help to lower cholesterol levels. Bristol's partner in the campaign is the Entertainment Industry Foundation, a charitable arm of the movie and television industry. According to Lisa Paulsen, president of the foundation the ads should be looked on as public service announcements rather than as ads for Pravachol. Ms. Paulsen further stated that Bristol made a "significant gift" to what has grown to be a $10 million campaign called the National Cardiovascular Research Initiative. Some of the money raised will help finance research at some of the nation's top cardiovascular centers.

On the other hand Pfizer, the maker of the best selling cholesterol lowering drug Lipitor has also taken out ads which urge people to have their cholesterol levels checked. The ads do not contain any mention of their drug Lipitor. Incidentally, Lipitor has become the number 1 selling prescription drug in the U.S.

The Food and Drug Administration, in a September 17, 2001 warning letter to Merck & Co. complained of the company's false and misleading advertising in connection with its rheumatoid arthritis drug Vioxx. The FDA in the warning letter stated that Merck has "engaged in a promotional campaign for Vioxx that minimizes the potentially serious cardiovascular findings that were observed in the Vioxx Gastrointestinal Outcomes Research (VIGOR) study, and thus, misrepresents the safety profile of Vioxx." The warning letter went on to further state that Merck has failed to modify its promotional practices in response to previous complaints from the FDA and that the company's actions have been "particularly troublesome". There has been a potentially serious interaction between Vioxx and Coumadin.

The agency also requested that Merck send out letters to all health care providers who were or may have been exposed to the misleading promotions, advising them of the misleading information that Merck disseminated. Merck had until October 1 to notify the FDA as to what kind of corrective measures the company will undertake to rectify this matter. It was also alleged that the company made unsubstantiated claims about the relative benefit of Vioxx. A warning letter from the FDA is more serious than the more usual routine citation that the agency sends to an offending drug company. Thus time and time again we see that drug companies continue to flout the rules in regards to advertising their products.

In another example of how the drug companies flout the rules in regards to advertising their drugs, GlaxoSmithKline PLC had been cited 5 times by the FDA since 1999 for improper, misleading, or false marketing involving its popular diabetes drug Avandia. In the latest episode a more serious warning letter has been issued because of the "seriousness of your violations" and "the fact that violative promotion of Avandia has continued despite your written assurances" that it would stop.

Avandia had sales of $534 million in the first 6 months of 2001. The warning letter was issued because the company's sales representatives, speaking with doctors at a recent medical conference denied the existence of serious side effects as to cardiac related matters even though the drug's label specifically warned about such side effects. The company was also cited for misrepresentations about the drug in its TV commercials.

The American Medical Association and nine major drug companies are combining their efforts in a major advertising campaign in which the thrust will be to tell doctors not to accept gifts from the drug companies. The issue involves the free gifts, trips and even payments to attend seminars from the drug companies to the members of the medical profession.

The AMA is contributing about $500,000 to the ad campaign and the nine drug companies are contributing anywhere from $50,000 to $100,000 towards the campaign. AMA policy specifically states a limit of $100 on such gifts and states it should not include trips and hotel accommodations. Many medical ethicists question the propriety of such a campaign itself wherein the drug industry and the A.M.A purportedly act in a united fashion to question unethical conduct caused by one of the parties inducing the other party to act improperly.

In recognition of today's era the Federal Trade Commission and the Food and Drug Administration announced that they were stepping up joint enforcement actions against companies marketing fraudulent health products over the Internet. The initial action called Operation Cure dealt with false claims made by 6 small companies. The companies' products made claims about treating such various ailments as cancer, diabetes, Alzheimer's and AIDS using herbs and dietary supplements. In addition to these 6 companies, dozens of other companies have received warnings about their claims for health products.

Earlier this year these governmental agencies sent out warnings to 48 Internet companies that promoted a consumable form of silver, known as colloidal silver, as a cure for everything from acne to AIDS. About 25 % of the 48 companies voluntarily agreed to remove these ads. Last year the trade commission found nearly 1,200 Internet companies selling products with curative claims that must, by law, be approved by regulators. About 25% of these companies also voluntarily agreed to remove these claims.

The results of a study of drug advertising conducted by Scott Neslin, a marketing professor were released in the Association of Medical Publications. The study compared the return on investment for the 4 marketing tactics most often used by drug companies. According to the study the drug companies spent the following:

According to the results of the study, print ads in medical journals deliver a higher return than do the other marketing tactics. We must point out however that the Association of Medical Publications funded the study, even though the Association denies that this influenced the findings. Incidentally the spending on advertising by the drug industry brought it into 5th place as far as industry groupings were concerned in ad spending.

The industry that spent the most in 2000 was the automotive industry, which spent about $11.50 billion on advertising. The retail industry spent about $10.10 billion, the media industry spent about $6.90 billion and the financial industry spent about $5.80 billion according to Competitive Media Reporting, PERQ/HCI and Scott-Levin.

IMS Health estimates that $4.04 billion was spent by the pharmaceutical industry on marketing directly to doctors, which is up 64% since 1996. This is about 40% more than the $2.5 billion that was spent by the industry on advertising to consumers in 2000. The Wall Street Journal recently highlighted this issue in an article by Chris Adams entitled "Doctors on the Run Can 'Dine 'n 'Dash' In Style in New Orleans". The article highlighted the matter of the drug companies giving inducements to doctors "to learn more about their products".

Claritin was the 3rd most widely advertised drug in the United States. Schering-Plough has spent over $322 million in advertising the drug in 1998 and 1999. In the year 2000 Schering has spent over $100 million advertising Claritin. With Claritin having come off prescription status, Schering is now switching their ads over to using Clarinex, the next generation prescription drug to Claritin.

For the fourth time in 16 months the Food and Drug Administration cited Pfizer Inc. and Pharmacia Corp for improper marketing of Celebrex, the anti-arthritic drug they co-market. The "warning letter" dated February 4, 2001 cited the "repeated promotional activities that minimize the potentially serious risk of using Celebrex" together with a common blood-thinning medication.

This most recent episode involved a doctor trained by the drug makers who called a group of other doctors over a speaker phone and made "several unsubstantiated comparative claims" regarding Celebrex. A Pharmacia spokesperson stated that the company had taken action to prevent the situation from happening again. The "warning letter" went on to further state: " Despite your assurances, however, your violative promotion of Celebrex has continued". The previous letters were not considered "warning letters" but nevertheless we must ask how many times can a violation re-occur without incurring a more severe punishment than a slap on the wrist.

In October 1999 the Food and Drug Administration's Division of Drug Marketing, Advertising and Communications warned Pfizer Inc. and Pharmacia Corp., the co-marketers of Celebrex, that the marketing material for the drug was false and misleading. In April 2000 the same warning was issued to these 2 companies concerning false and misleading advertising of the same drug. In November 2000 guess what? Yes! The same warning was once again issued to the same companies because of false and misleading advertising concerning the efficacy of Celebrex.

The FDA criticized the continued use of certain homemade promotional pieces, even though the companies insisted that these were only isolated occurrences. According to the FDA such activities by the companies " demonstrate a continuing pattern and practice of violative behaviors that evince widespread corporate involvement and acquiescence with your employees' activities." No fines were issued, just another slap on the wrist even though we are talking about false and misleading advertising. Remember the background for this advertising relates to the battle between Celebrex and Vioxx the competing anti-arthritic drug made by Merck for supremacy as the number one selling anti-arthritic drug.

When you add up the total of monies that the drug companies spend on advertising you come across a difficult expenditure to classify. Should money spent in opposing Medicare coverage for prescription drugs be classified as a political contribution, or should it be included as a research and development cost in assessing what price a prescription drug should cost the consumer. Bruce Josten, the top lobbyist for the U.S. Chamber of Commerce confirmed that the organization intends to spend "multiple millions of dollars" in promoting a non-governmental solution to the prescription drug-Medicare coverage question.

Pharmaceutical companies are the main donors to the expected $20 million dollar ad spending campaign from the Chamber, which will promote the candidacy of mainly Republicans who side with them on this issue. In addition to this $20 million spent by the industry on the Chamber campaign, we discuss in this article below the $35 million the industry is spending to fund the Citizens for Better Medicare.

According to figures from the Citizens for Better Medicare, the drug industry has spent about $8.46 million on issue ads related to opposing Medicare coverage for prescription drugs. The Public Citizens Congress Watch estimates that the drug industry has spent about $167 million on its lobbying effort so far during the 2001 election campaign. We realize that every industry has the right to spend money to promote their own interests, but at what point do these expenditures become so excessive and costly to the members of the public who end up paying for these costs in the form of higher prescription drug prices? It has been estimated that the industry made about $19 million in direct donations, mostly to Republican candidates and the party.

The FDA approved 53 novel drug applications in 1996.This number dropped to 35 in 1999, and was down to 16 for the first half of 2000. With the shortfall in research discoveries to overcome the easiest way to do this is to increase the price of the new drugs that are discovered. Add to that the big increase in advertising the product from the industry and we get to the core of the problem.

Several new groups have been formed recently to deal with the issues that have arisen as a result of the increase in prescription drug advertising. One of the new groups is RxHealth Value, of Berkeley, Ca. RxHealth members include consumers, employer health-care associations, physicians and health-care organizations. The group hopes to get the U.S.Food and Drug Administration to issue stricter rules regarding prescription drug advertising.

Two of the hot spots in connection with this issue are inaccurate ads and also advertising that fails to tell the user about all of the risks and side affects associated with a particular drug. In an AARP survey it was determined that about one-third of the 1,300 consumers questioned failed to notice the small print in the advertisements indicating the side effects and risks of the medication being advertised. Under the "fair balance" provision of the FDA rules regarding prescription advertising both the benefits and risks associated with a particular drug should be fully disclosed in the same communication.

In August of 1997 the FDA relaxed its rule regarding television advertising. Instead of having to point out the negative effects in written ads that a drug may result in when used, the commercials on television merely require the posting of an 800 number to call or to ask your doctor for more information about the potential negative consequences of the drug.

A non-activist group involved in this issue is a group named EthicAd Inc.which is based in Atlanta. This group consists of physicians from John Hopkins University School of Medicine, Harvard Medical School, U. of North Carolina Medical School and the Mayo Clinic. This group is seeking voluntary guidelines to be set up regarding the advertising of prescription drugs. The group will host a national meeting in January to better define standards for prescription drug advertising.

The Health Insurance Association of America and Blue Cross based out of Chicago announced the results of their study showing that expenditures in the U.S. for prescription drugs have doubled since 1993 to just over $101 billion, and are expected to double again by 2004. Television prescription drug advertising rose 70 % in 1999 to $1.13 billion.

A report by the National Institute for Health Care Management dealt with the cost of advertising prescription drugs. To read this report see It is a 44-page report full of facts and data on prescription drugs. The Institute is a non-profit organization supported by the insurance industry and government funds. With the drug industry claiming that Research and Development costs are soaring, this report shows that the cost of advertising for prescription drugs on a percentage basis is growing faster than is the percentage cost for R&D. In Europe direct-to-consumer advertising is prohibited. The drug industry there is not allowed to spend more than 9 % of its revenue on advertising to health professions. At the same time we must keep in mind that England has socialized medicine, so their drug industry is operating under a different economic system than is ours.

The report shows that the drug industry spent $17 billion on R&D and product approval in the U.S. in 1998. The latest figures show that the drug industry spent $20 billion for R&D and product approval in 1999.

The median profit for pharmaceutical companies in 1999 was 18.5 %, which is the highest return for any industry. According to Stephen Schondelmeyer, a professor at the University of Minnesota's College of Pharmacy, " The 18.5 % profit is accounted (for) separately from the 20% they say they spend on R&D". The median for all other industries is 4.4 %. According to Professor Schondelmeyer " On average, for every $100 spent on a drug at the manufacturer's level, the actual cost of making it is $10 to $15." He also stated: " A further $20 goes to R&D. About $15 goes to taxes and administrative costs. About $30 goes to advertising and marketing". We certainly do realize on the other hand that very few drugs go on to become "blockbuster drugs" and the cost and expenses for the failure is very high.

Direct to consumer advertising for prescription drugs was illegal until 1997. By advertising the ailment instead of the brand name drug the drug companies do not have to contend with mentioning the potential side effects of their drug. The Food and Drug Administration's "fair balance" guidelines set up in 1997 require indicating the side effects only when the particular drug, not the ailment is advertised.

The average price per prescription grew from $40.96 in 1999 to $45.27 in 2000. The number of prescriptions filled increased from 2.7 billion in 1999 to 2.9 billion in 2000. In 1998 the average price per prescription for new drugs (those introduced in 1992 or later) was $71.49 more than twice the $30.47 for previously existing drugs. The drug industry claims that Medicare coverage for prescription drugs means a lowering of their profit margin and thus would result in a lowering of their R&D expenditures. The drug industry sharply increased its direct to consumer advertising in 1997 when the FDA relaxed its guidelines for television advertising for pharmaceuticals. It is estimated that the drug industry spent about $1.5 billion on direct to the consumer advertising in 1998.

We feel that this direct advertising to the consumer has resulted in more negatives than positives. Is the increased cost that we all are bearing worth the supposed more knowledge that the consumer gains? We feel these ads only serve to confuse the public more than they benefit us.

A lobbying organization named Citizens for Better Medicare (CBM) spent over $38 million advertising its opposition to former President Clinton administration's prescription drug proposals. That is more money spent on this campaign than any other organization. So far this year the industry has contributed an estimated $11.2 million in campaign contributions up from $4.8 million in 1992. According to a Congress Watch study the drug industry has hired 297 registered lobbyists since 1997 at a cost of $235.7 million. The latest figures show the organization (CBM) is now spending about $1 million a week on campaign-related issues.

Timothy Ryan the group's executive director has acknowledged that the majority of the groups funding have come from the pharmaceutical industry. Mr. Ryan previously had been the marketing director of the Pharmaceutical Research and Manufacturers Association (PhRMA). CBM was established as the lobbying and grass roots organizing arm of PhRMA. "There isn't any other industy that has spent this kind of money" on an election, says Kathleen Hall Jamieson, dean of the Annenberg School for Communications at the University of Pennsylvania.

CBM was set up under Section 527 of the Internal Revenue Code, which governs political activities, by nonprofit organizations. Click on the IRS Web site ( to see contributions and spending by political groups organized under tax-code section 527. It does not have to report its income or divulge its spending, so long as it sticks to advocacy issues and not the individual candidates involved in a particular election.

It has a web site for young people that originally offered $10 worth of free calling card time urging the user to call your grandparents to tell them to oppose the administration's prescription drug proposal. They were so inundated with calls that they changed the offer to eliminate the free $10 calling card, and replaced it with the call "on our own dime" line. The group's advertising campaign has been focused in the district where Democrats who favor Medicare coverage for prescription drugs are running.

Please see our article "Ace Inhibitors and Beta-Blockers Fight Heart Failure" in connection with costs and prescription drug benefits.

The following is a quote from a press release dated May 3, 2000 from the National Institutes of Health's National Library of Medicine and refers our readers to an excellent source of information about the drugs we use.

"Recognizing the public's concern for good information about available medicines, the National Library of Medicine has enhanced its consumer health Web site, MEDLINE"plus", with extensive information about more than 9,000 brand name and generic prescription and over-the-counter drugs. The site (at gives information about side effects, dosing, drug interactions, precautions, and storage for each drug. Because the articles are intended for the use of patients, they are written in non-technical language.

The information is provided in MEDLINE"plus" through a special arrangement with the United States Pharmacopeia, located in Rockville, Maryland. Specifically, MEDLINE"plus", now makes available the USP's Drug Information (USP DI), Volume II, "Advice for the Patient." The USP DI, one of the most authoritative sources for drug information in the United States, is now in its 20th edition. Because it is in such high demand, the "Drug Information" link is prominently featured on every page of MEDLINE"plus".

MEDLINE"plus" links to authoritative information on nearly 400 health topics, and, although just 18 months old, this site is used by consumers and health professionals some 1.3 million times each month. MEDLINE"plus" also connects users to medical dictionaries, lists of doctors and hospitals, and "Health Topic" pages that have links to carefully selected resources on subjects such as diseases, fitness, and nutrition. In April, MEDLINE"plus" added the "" Medical Encyclopedia, which contains articles on health topics as well as an extensive collection of medical illustrations.

The National Library of Medicine, which is the world's largest library of the health sciences, is a part of the National Institutes of Health in Bethesda, Maryland. The Library has an extensive Web site at that provides a great variety of information for the general public and for health professionals. The site requires no registration and users are assured of complete privacy."

For an excellent article on the topic of prescription drug costs please see Jeanne Findlater's article "The Cents and Nonsense of High Cost Prescription Drugs"-


By Allan Rubin
Updated February 27, 2005

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