The need to reauthorize a prescription drug user-fee act-which allows drug marketers to pay to facilitate faster approval of drug applications by the Food and Drug Administration-along with a push to create a Medicare prescription drug benefit are serving to heighten already strong scrutiny of DTC spending.
With the first drafts of legislation as much as a month away, how significant the challenge will be remains uncertain. But ad groups and drug makers are worried.
"We have to be vigilant on both fronts," said Adonis Hoffman, senior VP-counsel for the American Association of Advertising Agencies. Jeff Trewhitt, a spokesman for the Pharmaceutical Research & Manufacturers Association, said his group "is watching carefully. We are taking nothing for granted."
The groups are concerned about statements from congressional leaders from both political parties that question whether the growth of DTC in the last three years, powered by $2.5 billion in advertising billings last year, are driving up health costs. The issue is also surfacing whether the FDA adequately scrutinizes DTC ads.
U.S. Rep. Bill Thomas, R-Calif., who heads the powerful House Ways and Means Committee that will look at the Medicare drug benefit, has indicated he is examining DTC costs. Rep. Thomas, who couldn't be reached for comment, was quoted recently suggesting that any Medicare drug benefit should pay the cost of needed generic drugs, but not the additional costs of an advertised branded drug that isn't significantly better.
Democrats, meanwhile, have suggested that the Bush administration proposal for a Medicare prescription drug benefit doesn't go far enough. Sen. Bob Graham, D-Fla., has suggested seniors should have to pay no more than $30 a month to get a benefit.
One means under consideration by both the House and Senate to keep costs down: Limit reimbursement for heavily advertised drugs.
The prescription drug user-fee extension, which Congress is expected to approve this year, is expected to offer the first action opportunity. Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee, and Sen. Edward Kennedy, D-Mass., chairman of the Senate Health, Education, Labor and Pensions Committee, have both urged passage of a "clean" bill without "add-ons." An aide to Sen. Kennedy said that the senator would view curbs on prescription drug ads as a controversial "add-on" that should not be included.
But Rep. Sherrod Brown, D-Ohio, the senior Democrat on the Energy and Commerce Committee's health panel, at a recent hearing called prescription drug pricing, advertising and prescription drug inflation "a lethal combination for the U.S. health system."
It is the Medicare prescription drug legislation that most worries ad groups. It's uncertain, however, if the legislation will pass. "It is highly likely that the Congress will take a close look at DTC advertising," said Dan Jaffe, exec VP, Association of National Advertisers. Whether it will finalize action is still far from clear."
John Kamp, a lawyer who handles food and drug clients, said the attention may prompt marketers to pull back on DTC advertising. "If Congress makes enough noise, there might be a perception of it as too volatile."
What: Congressional consideration of DTC ads
Cause: Reauthorization of drug user fee act; push to create Medicare prescription drug benefit.
Possible outcome: Limits on reimbursement for heavily advertised drugs.
DTC billings in 2001: $2.5 billion