Congress eyes DTC ad threat

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Two House committees blame direct-to-consumer advertising in part for rising health-care costs and are considering steps to force cutbacks in a category that generates more than $2.5 billion in annual ad spending.

As the House Energy & Commerce Committee and the House Ways & Means Committee work together to craft legislation for Medicare reform, they are eyeing four potential measures to curb DTC ads, according to insiders and lobbyists.

They include:

* Forcing drugmakers to include in TV ads the equivalent of the exhaustive warnings that now commonly appear in print, effectively eliminating broadcast ads. The committees are discussing altering a section of federal law that the Food and Drug Administration cited in allowing drugmakers to run ads with lesser warnings on TV.

* Requiring seniors to pay more for advertised drugs than unadvertised drugs.

* Offering drug companies lower reimbursements for advertised drugs than unadvertised drugs. Under this plan, seniors would pay the same share of costs for advertised and unadvertised drugs, but manufacturers would receive less.

* Limiting the deductibility of drug ads.

Chances for congressional action may have lessened last week, as the Office of Management and Budget offered a bleak picture for government revenue. But the House panels could include the curbs in a prescription drug proposal to be unveiled when Congress returns after Labor Day.

Advertising and media groups are worried enough to mount a major lobbying effort. "We are up there and opposing this in the strongest way," said Wally Snyder, president-CEO of the American Advertising Federation. "We've been making arguments for the benefits of advertising ... that at-risk patients are getting information that they would not otherwise have ... the doctors coming in and saying it is helping." Mr. Snyder said if legislation is enacted, the groups will mount a vigorous legal challenge. "If [Congress] acts, we will fight it all the way to the Supreme Court."

Dick O'Brien, exec VP of the American Association of Advertising Agencies, said "We have been predicting that as part of the prescription-drug reimbursement program, DTC would come under scrutiny. We are now hearing talk of reversal of the FDA regulation that permitted DTC. In my mind there is almost a certainty when Congress comes back [in September] there is almost a certainty there will be an attempt to put a restriction on DTC into legislation."

How far DTC restriction will get is uncertain. No clear champion of DTC regulation has yet emerged among Republicans who lead the committees, nor are detailed drafts circulating publicly.

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