Introductory Comments: Direct-to-Consumer Prescription Drug Advertising: Evaluating Regulatory Policy in the United States and New Zealand

Abstract

cult, so firms either told consumers that “help was available” without mentioning a specific drug by name or reminded people of brand name drugs without discussing the conditions they were designed to treat. Under these constraints, DTC advertising gradually increased from approximately $12 million in 1989 to $579 million in 1996. In 1997, the FDA adopted a revised and more liberal policy toward DTC advertising, permitting advertisements that maintained a fair balance between portrayed benefits and risks using more easily understandable language. Broadcast advertising expenditures soared, and total expenditures on DTC advertising reached $2.7 billion in 2001. But the debate had only begun. Paralleling the enormous increase in DTC advertising expenditures has been increased skepticism about the existence of resulting health benefits to consumers from these highly promoted products and the corresponding sizable increase in prescription drug expenditures. Concerns continue to be raised about the adequacy of the information being transmitted and the possible adverse effects of DTC advertising on doctor–patient interactions. Accordingly, arguments have been advanced that would favor both tightening and lessening government regulation of DTC advertising. Advocates of lessened regulation point to the advantages of providing better information to consumers than would be available in the absence of DTC advertising, even to the extent of permitting earlier identification of potentially serious medical conditions, with consequent lessening of subsequent health costs. Moreover, John Calfee notes that a series of surveys, including those sponsored by the FDA, fail to provide any clear evidence of harm, as seen through the eyes of consumers. He further argues that there is added consumer protection because DTC advertising is unique in that consumers cannot act on it except following consultation with an expert interested in their welfare (a prescribing physician). Opponents, who favor tightening regulations, emphasize the concentration of DTC advertising on a small subset of drugs that do not appear to present important therapeutic advantages over treatments that are already available and are far less expensive. Joel Lexchin and Barbara Mintzes, for example, point out that consumer surveys may shed little light on the health benefits and costs that result from the extensive promotion of such drugs to consumers. They also dispute the notion that DTC advertising presents a fair balance of benefit and risk information, which leads to a truly informed choice. Janet Hoek and Philip Gendall provide a thorough review of the evolution of DTC advertising in New Zealand and focus on how the country’s self-regulatory system functions