European DTC Proposal Could Lead to $1 Billion Bonanza for Ad Shops

EXCLUSIVE: EU Weighs Rule to Allow Consumer Drug Ads for The First Time

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More than $1 billion in advertising spending could flood into the European Union following a proposal to allow a form of direct-to-consumer drug ad spending for the first time.

The practice is banned in the 25-member EU, but DTC ads are a $4.1 billion business in the U.S., the only country that allows it. DTC advertising had been permitted in New Zealand, but that nation slapped a moratorium on ads from drug makers last year.

Pharmaceutical companies spend about $1.2 billion in measured media in Europe, a figure estimated by Advertising Age to more than double if the EU allows its version of DTC, known as ITP, or "information to patients." Most of the spending is allocated to advertising to physicians, sponsoring symposia, hosting advisory boards and general sales-force activities. Expanding that to include the consumer could result in a big boon for EU media as well as advertising holding companies.

"We are in this ludicrous situation in Europe where anyone is free to give information, quite legally, about pharmaceutical products-except the industry which makes them," said Colin Webb, patient advocate representative on the European Commission's Enterprise and Industry Directorate-General.

The EU Commission is considering a draft proposal from the High-Level Pharmaceutical Forum to basically allow a trial run for ITP in the diabetes category. A decision is due this month.

"It's a parliament, so they'll debate it and vote on it," said Peter Pitts, the former associate commissioner of the Food and Drug Administration who now runs the health-care practice at public-relations firm Manning Selvage & Lee, and also is the director of the Center for Medicine in the Public Interest.

Mr. Pitts, who sat on a panel conference earlier this year in Brussels that discussed the subject of ITP, cautioned, however, that Europe has been down this road before-defeating a proposal for a form of DTC in 2002-and that it won't allow any form of DTC without government inclusion.

"The EU has said it will allow ITP under the supervision of, and cooperation with, the government," he said. "But it calls into question whether or not government and industry should cooperate on educating patients on health issues."

"The entire argument is really not whether information should be given to the wider public; generally people agree to this," Mr. Webb said. "The question is: 'Who is going to be the gatekeeper?"'

Some European residents and patient groups have already begun clamoring for more information on prescription medications. Allowing DTC in Europe is partly a cost-containment issue, since many European countries have universal health coverage. Consumers play little to no role in choosing or paying for their drugs, hence no need for advertising.

Governments are fearful that health-care costs will rise if patients demand certain prescription medications that are costly, a problem germane to DTC in the U.S., as is the issue of physicians who feel pressured by patients to prescribe drugs that patients say they have seen advertised.

Government's role

"Part of the problem, of course, is that information and advertising are not mutually exclusive," said James Copping, principal administrator of the European Commission Enterprise & Industry Directorate-General. "Legislation cannot decide it, although it has to play a role."

Translation: One way or the other, the government will have a hand in Europe's version of DTC.

Several drug companies contacted for comment either declined to speculate on the EU proposal or did not return calls, but the prospect of being able to advertise in an untapped market has to be enticing.

"It will be big-not as big as here, but big," said Stu Klein, CEO of Omnicom Group's professional health-care ad agency KPR. "The magnitude of DTC here, with the breadth of category and the number of products-it just won't get that broad or that deep in Europe. There are still too many overall restrictions."
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