Advertising and the Pharmaceutical Industry

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The pharmaceutical industry, which researches, develops, produces, and markets prescription drugs in the United States, is the most heavily regulated of all industries when it comes to the advertising and promotion of its products. Through its Drug Marketing, Advertising, and Communications Divisions, the Food and Drug Administration (FDA) regulates all advertising and promotional activities for prescription drugs, including statements made to physicians and pharmacists by pharmaceutical sales representatives. Advertising of over-the-counter (OTC) drugs, which is not regulated by the FDA, is under the jurisdiction of the Federal Trade Commission (FTC).

Before a new prescription drug is approved for marketing, the FDA and the pharmaceutical company must agree on the "full prescribing information" that will accompany the product and that must be included in all ads, brochures, promotional pieces, and samples. This full prescribing information must include, in the correct order, the following information about the drug: its trade name, its assigned name, the strength of its dosage form, a caution statement (stating that a prescription is required), a description of its active ingredient, the clinical pharmacology of the drug, indications for its usage, contraindications for usage, precautions, adverse reactions, instructions on what to do in case of overdosage, dosage and administration, and how the drug is supplied.

Typically, this information is very detailed, and even when it is given in six-point type, it can run to two printed pages. The majority of pharmaceutical companies pay to have this information published in the Physician's Desk Reference, which is sent to physicians free of charge. The book is also sold in bookstores or is available on library reference shelves for use by consumers who want to know more about specific drugs.

All promotional pieces and ads to be used when a new drug is marketed must first be approved by the FDA before marketing beginsto ensure that the statements being made are consistent with those in the official labeling. After the introduction of a new drug has been completed, copies of all subsequent ads and promotional pieces must be sent to the FDA at the time of their first use, too, but they do not have to be preapproved. The FDA reviews ads, brochures, direct-mail pieces, and sales aids to ensure that a "fair balance" has been maintained in presenting both the benefits and risks of a medication. In the 1990s, the FDA directed its attention to "scientific symposia" and other medical meetings at which information about new drugs, or new indications for drugs, are presented. This ensures that they are not just promotional programs for a single drug. In no other industry are advertising and promotion required to meet such strict standards.


Traditionally, the advertising and promotion of pharmaceutical products were directed primarily to physicians, with some limited advertising and promotion being directed to pharmacists. With the expiration of patents on some major drugs in the 1980s and 1990s, generic versions of the drugs became available from competing manufacturers. The generic drugs were priced lower than the brand-name products, so pharmacists got laws passed allowing them to substitute generic products for the brand-name products. This gave pharmacists more control over which generic company's products to purchase and dispense. Advertising and promotion to pharmacists increased. When committees, usually composed of pharmacists, became very important in deciding which drugs could, or could not, be prescribed or reimbursed under third-party payment programs (medicaid, HMOs, and other insurance programs), advertising and promotion were also directed to the decision makers in those organizations. More recently, advertising is also being directed to the consumer.


In the mid-1980s, two pharmaceutical companies began direct-to-consumer advertising (DTC). Pfizer led the way with its health-care series of ads to the general public. Merrell Dow was next, using DTC ads to inform the public that physicians had a new treatment to help smokers who wanted to stop smoking. When the company's new, nonsedating antihistamine became available, it used DTC ads to tell allergy sufferers that physicians now had a new treatment for allergies. The ads did not mention the name of the products; rather, they asked patients with specific problems or symptoms to see their physician.

The next phase of DTC advertising led to ads in magazines and newspapers that mentioned the name of the product and its indication for use. The advertising of prescription drugs on television or radio remained greatly restricted at this time since it was not possible to include the necessary brief summary of prescribing information on the air. Because of this limitation, the ads on television or radio had to focus on either the name of the product or the indication for the product.

To promote Nicorette, a nicotine-containing gum designed to help smokers stop smoking, Merrell Dow advertised it on television with the message that Nicorette was now available at pharmacies but only by prescription and under a doctor's supervision.

According to FDA rules at that time, Merrell Dow could not say that Nicorette was useful in helping smokers who wanted to stop smoking since it had included the name of the product in the commercial. When a company has the onlyor the majorproduct in the market, this approach can be very effective because it increases awareness among patients that a new treatment is available and influences them to see their doctors.

In 1997 the FDA changed the regulations regarding DTC advertising of prescription products on television and radio. It now allows both the name of the product and indications for it to be advertised, as long as the main precautions or warnings are given in the commercial. This has led to many prescription products being advertised on television, such as Rogaine, Claritin, Allegra, Viagra, Pravachol, Prilosec, and others. Nicorette by this time had been cleared by the FDA to be sold over-the-counter and, since it no longer required a prescription, the product was no longer governed by FDA rules but rather by FTC regulations.


The use of DTC ads on television and radio for prescription drugs has doubled since 1997 and reached $1.9 billion in 1999. By 2000, there were ninety-seven different prescription products that had been advertised on television or in print ads. In addition to this advertising, a separate budget was formulated for advertising and promotion to physicians, seminars, and symposia, and the large force of medical service representatives who call on doctors, pharmacists, and other health-care professionals. These representatives inform them about their companies' products; that is, how to use them, the side effects to anticipate, and the different dosage forms available for each product. They also provide starter doses (samples) to physicians, which may be used to initiate treatment for a patient or, in some cases, to provide medication for a patient who cannot afford to buy it. The total for all advertising and promotion, including the medical service representatives, can run as high as 25 percent of sales.

Some members of Congress feel that pharmaceutical companies are spending too much on advertising and promotion, and some would even like to limit these expenditures. Such restrictions are already in effect in Great Britain. Proponents of spending limits feel that they would result in lower prices for prescription drugs; these same individuals do not believe that the dissemination of information about new drugs and new treatment procedures would suffer as a result. However, many in the health industry think that if physicians had to depend on their medical journals for information about new drugs, they might not know about them for several years. Meanwhile, their patients in need of the new drugs would be deprived of the latest advances in medical care. In the United States, only 8.8 percent of health-care dollars was spent on drugs. By comparison, in Canada 12.5 percent of the total health-care dollars were spent on drugs. The advertising and promotion of prescription drugs, including the cost for medical service representatives who call on the nation's physicians and other health-care professionals, make up about 2 percent of the total health-care expenditures in the United States.


The member companies of the Pharmaceutical Research & Manufacturers of America (PhRMA) have worked together to create guidelines for the ethical promotion of prescription pharmaceutical products.

The pharmaceutical industry undertakes:

  • that all products it makes available for prescription purposes to the public are backed by the fullest technological service and have full regard for the needs of public health: to produce pharmaceutical products under adequate procedures and strict quality assurance;
  • To have the claims for substances and formulations on valid scientific evidence, thus determining the therapeutic indications and conditions of use;
  • To provide scientific information with objectivity and good taste, with scrupulous regard for truth, and with clear statements with respect to indications, contraindications, tolerance, and toxicity;
  • To use complete candor in dealing with public health officials, health-care professionals, and the public, and to comply with the regulations and policies issued by the Food and Drug Administration.
  • Information on pharmaceutical products should be accurate, fair, and objective, and presented in such a way as to conform not only to legal requirements but also to ethical standards and to standards of good taste.
  • Information should be based on an up-to-date evaluation of all the available scientific evidence and should reflect this evidence clearly.
  • No public communication should be made with the intent of promoting a pharmaceutical product as safe and effective for any use before the required approval of the pharmaceutical product for marketing for such product is obtained.
  • Particular care should be taken that essential information as to pharmaceutical products' safety, contraindications, and side effects or toxic hazards is appropriately and consistently communicated subject to the legal, regulatory, and medical practices of the United States.
  • Medical representatives should be adequately trained and possess sufficient medical and technical knowledge to present information on their company's products in an accurate and responsible manner.
  • Symposia, congresses, and the like are indispensable for the dissemination of knowledge and experience. Scientific objectives should be the principal focus in arranging such meetings, and entertainment and other hospitality should not be inconsistent with such objectives.
  • Scientific and technical information should fully disclose properties of the pharmaceutical product as approved in the United States based on current scientific knowledge and FDA regulations.
  • Samples may be supplied to the medical and allied professions to familiarize them with the products or to enable them to gain experience with the product in their practice. The requirements of the Prescription Drug Marketing Act of 1987 should be observed.

The PhRMA Board also includes these four position statements as an adjunct to the PhRMA Code of Pharmaceutical Marketing Practices.

Gifts, hospitality or subsidies offered to physicians by the pharmaceutical industry ought not to be accepted if acceptance might influence or appear to others to influence the objectivity of clinical judgment. A useful criterion in determining acceptable activities and relationships is: Would you be willing to have these arrangements generally known?

Independent institutional and organizational continuing medical education providers that accept industry-supported programs should develop and enforce explicit policies to maintain complete control of program content.

Professional societies should develop and promulgate guidelines that discourage excessive industry-sponsored gifts, amenities, and hospitality to physicians at meetings.

Physicians who participate in practice-based trials of pharmaceuticals should conduct their activities in accord with basic precepts of accepted scientific methodology.

The PhRMA Board of Directors also adopted, as part of the PhRMA Code of Pharmaceutical Marketing Practices, the following guidelines on gifts given to physicians from industry as set forth in the Opinion of the Council on Ethics and Judicial Affairs.

Any gifts accepted by physicians individually should primarily entail a benefit to patients and should not be of substantial value. Accordingly, textbooks, modest meals, and other gifts are appropriate if they serve a genuine educational function. Cash payments should not be accepted.

Individual gifts of minimal value are permissible as long as the gifts are related to the physician's work. (e.g., pens and notepads).

Subsidies to underwrite the costs of continuing medical education conferences or professional meetings can contribute to the improvement of patient care and therefore are permissible. Since the giving of a subsidy directly to a physician by a company's sales representative may create a relationship which could influence the use of the company's products, any subsidy should be accepted by the conference sponsor, who in turn can use the money to reduce the conference's registration fee. Payments to defray the costs of a conference should not be accepted directly from the company by the physicians attending the conference.

Subsidies from industry should not be accepted to pay for the costs of travel, lodging, or other personal expenses of physicians attending conferences or meetings, nor should subsidies be accepted to compensate for the physicians' time. Subsidies for hospitality should not be accepted outside of modest meals or social events held as a part of a conference or meeting. It is appropriate for faculty at conferences or meetings to accept reasonable honoraria and to accept reimbursement for reasonable travel, lodging, and meal expenses. It is also appropriate for consultants who provide genuine services to receive reasonable compensation and to accept reimbursement for reasonable travel, lodging, and meal expenses. Token consulting or advisory arrangements cannot be used to justify compensating physicians for their time or their travel.

Scholarship or other special funds to permit medical students, residents, and fellows to attend carefully selected educational conferences may be permissible as long as the selection of students, residents, or fellows who will receive the funds is made by the academic or training institution.

No gifts should be accepted if there are strings attached. For example, physicians should not accept gifts if they are given in relation to the physician's prescribing practices. In addition, when companies underwrite medical conferences or lectures other then their own, responsibility for and control over the selection of content, faculty, educational methods, and materials should belong to the organizers of the conferences or lectures.

(See also: Advertising and the Alcohol Industry ; Advertising and Tobacco Use )

Charles M. Rongey

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Advertising and the Pharmaceutical Industry

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