Life Science Compliance Update

March 16, 2016

Senate Introduces Bill Eliminating the Tax Deduction for DTC Advertising

Four Democrats have introduced a Senate companion bill to the House bill to ban nearly all direct-to-consumer (DTC) advertising. The Senate bill, "Protecting Americans from Drug Marketing Act," would prevent pharmaceutical companies from writing off the money that they spend on advertising and marketing as a tax deduction, as they currently can do.

The bill was introduced by Senators Al Franken, Sheldon Whitehouse, Sherrod Brown, and Tom Udall, and defines DTC as any advertisement "primarily targeted to the general public," specifically: print, radio, television, telephone communication systems, and social media.

Critics of DTC advertising often repeat the same messages, constantly reminding us that the United States and New Zealand are the only two countries that permit pharmaceutical companies to market directly to consumers.

Senator Franken's Viewpoint

Senator Franken, who had previously introduced this bill in 2009, argued that increased spending on advertising contributes to higher drug costs, since many ads feature newer and pricier medicines. Franken issued a statement, saying that drug makers are "trying to encourage Americans to buy the most expensive drugs, even when cheaper, equally effective drugs are on the market...This is just a common sense measure to help cut down health care costs."

In his statement, Senator Franken stated, "doctors and medical professionals are in the best position to provide information to patients, not drug company advertisers aiming to make a profit."

Senator Franken hopes that without the tax benefits provided through advertising, pharmaceutical companies will stop focusing on advertising, and instead turn their focus and resources to developing new drugs.

Senator Franken's argument follows the argument that the American Medical Association made back in November when they called for a ban on DTC advertising and promotion.

Analysis and Reaction

It has been mentioned that the four senators who introduced the bill would like to have it added to the health care reform legislation, possibly even offering it as an amendment when the full Senate considers the proposed bill. Such a move would put a previous "handshake deal" between pharmaceutical companies and the Obama administration and Senate Finance Committee leaders in jeopardy. That deal called for drugmakers to pick up an estimated $80 billion in health care costs in exchange for no further crackdowns on the industry.

John Kamp, executive director at the Coalition for Healthcare Communication, believes that laws "that ban truthful messages are a violation of the First Amendment and an insult to patients seeking information to enrich their discussions with their doctors and empower their medical decisions."

A spokeswoman for the Pharmaceutical Research and Manufacturers of America (PhRMA), stated that criticisms about DTC advertising "are being drive by the false notion that DTC plays a direct role in the cost of new medicines and ignores the positive impact of health care communications." She also enforced the idea that advertisements "provide scientifically accurate information to help patients better understand their health care and treatment options.

The bill was introduced on March 3, 2016, was read through twice, and has been referred to the Committee on Finance.

March 15, 2016

FDA National Direct to Consumer Advertising Survey – Again

If at first you don't succeed try, try again. That seems to be the theme of a recent announcement by the Food and Drug Administration (FDA) on the proposed collection of consumer attitudes towards Direct to Consumer Advertising (DTC).

Under the Paperwork Reduction Act, federal agencies are required to publish notice in the Federal Register of any proposed collection of information and to allow sixty days for public comment in response. This most recent notice by the FDA solicits comments on research entitled, "National Direct-to-Consumer Advertising Survey." The objective of the research is to survey the American population about their experiences with, and attitudes toward, direct-to-consumer (DTC) prescription drug advertising.

The FDA last surveyed patients about their experiences with and attitudes toward DTC advertising in 2002, and as numerous changes have been made that affect the DTC landscape, the FDA is interested to see whether the changes have had an influence on consumer attitudes and behaviors. Some of the changes include: declines in print readership, the rise in online prescription drug promotion, and self-imposed industry guidelines for DTC advertising.

The survey is expected to contain questions about "respondents' knowledge of FDA's authority with respect to prescription drug advertising, their exposure to DTC advertising, their beliefs and attitudes about DTC advertising, and the influence of DTC advertising on further information search and patient-physician interactions." At the end of the survey, participants will be asked to view one of two ads for fictional prescription drugs intended to treat high cholesterol and will be asked questions about the FDA's authority regarding specific claims found within the ad.

The general purpose of the survey is to build on previous research through a wider range of respondents (approximately 1,765, enticed to respond with 2 $1 bills found in a pre-survey invitation envelope), weighting the data to make it more representative, and asking more questions about DTC promotion. The FDA believes that offering a small token of value to the participates will establish a "latent social contract and subsequent reciprocity."

This survey comes after Representative Rosa DeLauro introduced a bill that, if passed, would prohibit all DTC ads for the first three years after a new drug is approved. Physicians at the American Medical Association (AMA) have also called for a ban on DTC ads for pharmaceuticals.

For those who are interested, information and study summaries of previous FDA surveys about advertising, including DTC advertising, can be found here.

The FDA is asking for comments, in either electronic or written format, to be submitted by close of business on April 29, 2016.

February 24, 2016

Responsibility in Drug Advertising Act of 2016 - Introduced to Restrict DTC - Direct to Consumer Advertising

United States House of Representatives member Rosa DeLauro introduced a bill the Responsibility in Drug Advertising Act to the House of Representatives that would restrict most direct to consumer (DTC) advertising of a new drug for the three years following the drug's approval. The only way around the three-year long DTC ban is if the Department of Health and Human Services (HHS) waived the waiting period. Such a waiver would come only after the drug sponsor submits an application requesting such to HHS and HHS determined that DTC advertising of the drug would "have an affirmative value to public health."

The legislation doesn't stop there, however. It takes it a step further, not only banning DTC advertisement for the first three years of a drugs life, but also granting HHS continued authority to prohibit DTC advertising of certain drugs after that three year period. HHS can invoke that authority if it determines that the drug has "significant adverse health effects based on post-approval studies, risk-benefit analyses, adverse event reports, the scientific literature, any clinical or observational studies, or any other appropriate resource." This authority continues on forever.

Not surprisingly, the bill has no cosponsors. It is possible that if this bill does become law (which is not very likely given the contentious election year and the extreme pressure it places on the First Amendment), it would actually be deemed unconstitutional and a violation of the First Amendment. According to Bob Ehrlich, CEO of DTC Perspectives, he believes that this bill is meant to "permanently kill DTC since the adverse event standard is so vague the Secretary [of HHS] can point to them as an excuse to continue bans after three years."

Not only is the bill a seemingly absurd personal vendetta against the pharmaceutical industry, but it is also an unnecessary reach into the advertising world of pharmaceutical companies. The PhRMA Code itself actually has a provision on DTC advertising, which recognizes that it may occasionally be appropriate to delay DTC, and in other circumstances it may be best to speed DTC up. Having a federal regulation gets in the way of such a self-governing process, and has the potential to seriously tangle up DTC efforts, which can have a direct impact on patient care and health.

The relevant PhRMA Code provision, provision six, reads as follows:

In order to foster responsible communication between patients and health care professionals, companies should spend an appropriate amount of time to educate health professionals about a new medicine or a new therapeutic indication and to alert them to the upcoming advertising campaign before commencing the first DTC advertising campaign. In determining what constitutes an appropriate time, companies should take into account the relative importance of informing patients of the availability of a new medicine, the complexity of the risk-benefit profile of that new medicine and health care professionals' knowledge of the condition being treated. Companies are encouraged to consider individually setting specific periods of time, with or without exceptions, to educate health care professionals before launching a branded DTC television or print advertising campaign. Companies should continue to educate health care professionals as additional valid information about a new medicine is obtained from all reliable sources.

Coalition for Healthcare Communication Executive Director John Kamp stated, "while Rosa DeLauro has never been a friend of the pharmaceutical industry or a leading thinker on medical marketing issues, she is a high ranking minority member of the House Appropriations Committee, including the subcommittee with jurisdiction over the FDA. The Coalition takes her bill very seriously and will be working hard with the 4As and other allies to ensure that it does not advance on the House agenda." The bill was referred to the House Committee on Energy and Commerce the same day it was introduced.

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