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Every year I seem to need to rebut a critic of DTC who proposes a ban. Google DTC advertising and every month there will be call for a ban in the media. These DTC Hunters think that by making it extinct great things will happen. First, they believe prices for drugs would drop dramatically if only drug companies stopped buying expensive ads. Second, the DTC Hunters believe that by killing ads, doctors would prescribe what is best for patients without wasting time explaining the advertised drugs. Third, they believe that by keeping consumers unaware of new drugs, those good old fashioned generics would become more widely used thus lowering consumer and payer cost.

First let me admit drug ads are designed to sell more pills. The drug industry likes to say drug ads are meant to educate and they shy away from admitting they use DTC to increase sales. We all can agree that DTC is done only to grow the bottom line. So what? Prescription drugs are a good thing and promoting drug solutions should not embarrass drug companies. The Drug Hunters want to expose these evil folks for wanting to sell more of what they make.

So do DTC ads raise prices? That must be answered as maybe. If you mean, do branded drugs cost more than generic alternatives? Then, yes, DTC can raise drug spending. If a patient asks a doctor for a new drug that is no better than an old cheap alternative then I can agree. The reality is quite different in many cases. New drugs generally are improved from older versions or new drugs do not yet have any generic alternatives. I buy store brands if I believe they are equivalent. It is up to the drug maker to make their case to consumers to justify a branded premium. Consumers are not stupid and do not automatically assume this DTC drug is better.

Drug ads are in reality a small cost as a percentage of revenue. These multibillion dollar drugs spend $50-200 million annually. As a percent of sales that might be 2-5% so DTC costs is not a significant factor in drug pricing. Cutting ad spending will not cause drug companies to lower prices. In fact, that money would be redirected to physician promotion or to some other promotion. Since DTC increases sales, one would have to think banning it would reduce sales. Would we expect drug makers to cut prices if they saw sales decline from withdrawing DTC ads? The answer is no.

Let’s ask what would happen if consumers no longer saw DTC. Would physicians really spend more time with patients if they no longer were asked by pesky patients about new drugs? Would they now make their drug selection totally objectively? No. They would instead write drugs that they are used to using thus delaying adoption of new products. They would be detailed by drug reps, or be influenced by journal ads. They would be directed by insurance companies what their patients will get reimbursed on their drug bill.

Drug ads serve many positive purposes. Most importantly, consumers are getting information on what is available for their disease. They become more knowledgeable albeit imperfectly through DTC. They may not fully understand the drug’s pros and cons from the DTC but it is a start of a discussion. The ads incentivize doctors to stay current with new drugs because no doctor wants to appear uninformed with patients. The ads provide leverage to get covered by insurance companies who obviously would rather treat with cheaper generics.

Consumers understand that drug ads are designed to sell them on a product. They are not naïve in believing that the advertised drug is a wonder cure. They know there is wealth of additional information on pros and cons on the Internet. DTC is but one source of subjective information that balances what alternative constituencies are saying. Government payers, private insurers, consumer advocates, competing drug companies, and doctors all have an opinion on the value of the advertised drug. In this subjective world consumers face conflicting opinions. Taking away DTC will not lead to a utopia where patients always get the best drug from the benevolent payers and providers.

Advertising helps build competition. It promotes new products. We may not like it but we would not like a world where consumer choice is censored. DTC is not perfect but serves its role of letting consumers know what is available in a health care world where patients cannot assume objectivity from insurers or providers.

I was shocked to see media stories saying DTC may expand to cover off label use. What! This erroneous idea came from an FDA open meeting held 11/16 to discuss off label use based on court cases allowing drug companies the right to discuss them. FDA has been under pressure on first amendment grounds to liberalize their restrictions on drug companies educating doctors and other learned players on off label studies.

As far as I know no one at FDA is seriously thinking of allowing drug companies to advertise off label use to the public through DTC. I know we are in an era of fake news but seriously folks. FDA goes nuts when the background music is too loud on DTC ads. Does anyone think they will allow drug companies to tout off label uses to consumers? No, they will not. Not even under free marketer Trump

The whole debate over off label is because courts have ruled drug companies can use commercial free speech to discuss studies reflecting off label uses. FDA is trying to figure out how to deal with the first amendment in regulating such uses. They have been strictly using approved label claims as the standard but drug companies want the right to tell the medical world about legitimate off label studies.

I do not think drug companies expect to carry this free speech argument to DTC. All they want is to be able to do is discuss such uses with medical professionals who would want to know that information. Can a detail rep tell a doctor about a study involving off label use? Can a drug company tout such off label uses in discussions with stock analysts? FDA has been quick to pounce on drug companies promoting off label studies to anyone. They fear misinterpretation and incorrect use. They might be justified in their concerns but also need to allow business speech that is fact based even if not yet approved in the label.

The lay press thinks that FDA might open the floodgates of off label use in DTC. A publication as reputable as Consumer Reports had a story 11/9/16 titled “FDA Considers Allowing Drug Ads for Unapproved Treatments.” I am not sure why Consumer Reports made the leap from possibly loosening the regulations for discussions with doctors all the way to DTC. That story seemed to be picked up by many news organizations who said drug ads may increase because of off label uses.

I think the FDA will take years to study this issue and not do more than the courts push them to do. They are just figuring out how drug companies can use the Internet about 20 years late. They are worried consumers will get confused figuring out how to click on the fair balance. So, I do not think off label use is on their list of DTC to do projects, not for a decade or two.

Trying to be objective about Obamacare seems to be as difficult as with every other major policy issue these days. The newspaper headlines from the media are saying thousands of people will die if Obamacare is repealed. The Washington Post in a January 23 story cited estimates by medical professors who estimate the number at 44,000 annually. Bernie Sanders said 36,000 will die. These numbers assume no replacement plan which no Republican is advocating.

I looked at some statistics to see whether Obamacare is as good or as bad as critics say. First Obamacare definitely added millions of people to the insured category. That is a fact not disputed. The HHS says 20 million people have been added to the insured rolls since 2010. About 12 million are in the exchanges and the rest are covered by Medicaid expansion. We also see several million children under 26 kept on their parents’ plan.

The issue to debate is did we add enrollees cost effectively. Are we all paying more to insure these 20 million than we should? Republicans say there are better ways to get people coverage. Did costs rise? Yes, they did for Obamacare enrollees and those covered by employers as well. In 2008 according to the Kaiser Family Foundation the average family plan cost employers $12,680 with $3,354 borne by employees. In 2016 costs were $18,142 with employees picking up $5,277. Supporters of Obamacare say costs were rising before it was implemented so this rise is not from the Obamacare provisions.

That is not the only problem. Deductibles have risen dramatically. In 2008, only 16% of employer plans had deductibles of $1,000 or more. In 2016, 51% of employees covered had $1,000 or more in deductibles. On the Obamacare exchanges the situation is much worse. Deductibles vary by type of plan chosen with more expensive premiums providing lower deductibles. The popular Bronze plans average more than $5,000 in deductibles. It is probably fair to attribute these huge deductibles partially to the coverage mandates.

We are also seeing many state exchanges showing huge increases in premiums with the average being 15% in 2016. Many families are paying well over $10,000 in premiums and deductibles. For them Obamacare essentially just covers them for a catastrophic illness. It is true they get a free prevention exam and some other free diagnostic tests but that is not much for their $10,000.

Supporters of Obamacare say having 20 million more people covered is a societal benefit worth paying for by all of us. Maybe it is, but just maybe we are all paying more than we need to if we had a different approach. The Republicans say they can provide better coverage at lower cost. They think free market insurance competition and giving the states more control over budgets can lower cost. They also think that more consumer responsibility for spending decisions will make patients more aware of cost and provide pushback on healthcare prices.

What is very clear is that Mr. Obama’s promise of lowering premiums for every family was not achieved. In 2008 he promised the average family will save up to $2,500 a year. Many markets now only have one insurer willing to provide coverage. Clearly this reduced competition is not helping lower premium rates. While more people are covered today than pre-Obamacare, the jury is out on whether we are better off. That depends on who you are. Anyone with a pre-existing condition is likely better off. Those of us who had employer coverage before are likely not better off today because we are subsidizing insurance companies mandated to cover pre-existing conditions.

Democrats find many examples of the poor or people previously denied coverage who now have access to care. They tout these as reasons to keep Obamacare. Analyzing success, however, must also include the effects on everyone who is asked to pay for it. My guess is we have better alternatives that will provide coverage for less. That does not mean all people currently insured and subsidized will be better off under a new Republican plan. What is clear from Obamacare is insuring people already sick is very expensive and that healthy people do not sign up in high enough numbers to subsidize those folks.

As a compassionate society, we should not let people lose their life savings or get no care because they get sick. That does not mean we cannot create a much more targeted and affordable plan to do that. The proof will be in the details from the replacement plans proposed. Level headed analysis rather than hyperbole is what is needed in Congress but we do not seem to be in the political mood to do that. Keeping an unaffordable plan is not the answer the American people are seeking.

DTC will be much more important in the new health care era post Obamacare. This is not just for drug companies but for all health care goods and services. The Trumpcare plan will be shifting more decisions on health care to consumers based on free market competition. Americans will be given greater control over spending a pot of dollars allocated to them by government. Although we have not seen a final replacement plan we do know it will likely contain health savings accounts, tax credits, wider choices for insurance coverage, and some minimum affordable coverage for people with pre-existing conditions.

Americans will be encouraged to shop for health care like they do for all other products they buy. Yes I know the critics of free markets say health care decisions are different from other types of products and more important than choosing a dishwasher or cell phone. What consumers will do is give health care decisions much more consideration. Consumers probably spend a lot more time shopping for a car than for a heart surgeon. To evaluate health care decisions they will need transparency on prices and good information on pros and cons of their choices.

Health care information on products and services will become a boom industry. Rating services will spring up that tell consumers what health care services should cost and provide reviews on providers price/value. A free market will rely even more on advertising to pitch and justify services and this is where DTC will grow. We already have hospitals and physician advertising to consumers. What will change is a much more explicit price/value oriented advertising approach. As consumers are given more control over their limited health care spending, they will need more convincing on where to spend those scarce funds.

In today’s someone else pays system, we do not usually question the need for what our doctor recommends. We do not ask if that CAT Scan is essential because we never see the full bill. We do not ask for generics if a new branded drug is covered. We do not push back if the dermatologist asks to take a piece of our skin to biopsy as long as it is covered. Once we have the limited pot of dollars under our control we will be much more involved in making the go/no go decision on treatment. We all know doctors err on the side of over treatment because they do not want to be sued. That defensive medicine will be reduced as we pay more of the bill.

The critics of consumer controlled free market health say people will avoid important tests and treatments to save money. This may in fact be a problem and under treatment could be an issue with consumer controlled limited dollar plans. What we hope for is that good health care information will tell consumers what are the best investments to keep them healthy. In other words which tests/services are critical and which are just nice to do. Like it or not all health care decisions are a cost/benefit calculation. We do not, as a society have unlimited resources. Trumpcare will place more burdens on us to decide how and how much to spend on health care.

One would hope that essential health care services become more easily available at lower prices. Competition should do that. We can expect more chain medicine as big providers will emerge who can use volume to offer lower priced services. That means many smaller, inefficient providers will be forced out. Clearly when price/value becomes the main concern of consumers the market will change significantly. Advertising will become critical to tell that price/value story as consumers will push back on providers to justify the recommended service or product.

In what might be the most puzzling FDA DTC study proposed to date, the agency wants to see if consumers can recognize deceptive claims in DTC ads. In this study FDA wants to create mock ads with deceptive claims to see if consumers recognize those false claims and evaluate how that affects their perceptions of and requests for the drug. FDA is concerned consumers might ask their doctor more often to prescribe a drug hyped with deceptive ad claims.

I have problems with this proposed study on many fronts. First, how are consumers supposed to know what is in the approved label to decide what is deceptive? In the study proposal apparently the plan is to plant false claims on a mock website and see if consumers can spot them. So FDA will have consumers play detective like those games where you see two photographs slightly altered to spot the changes? I just do not get the method here or how consumers should know what is an approved, accurate claim. Does FDA want consumers to be the vanguard of regulation and report claims they think are deceptive? Is FDA going to staff a hotline to receive consumer complaints?

Second, the consumer relies on FDA to prevent deception. Drug ads are already the most scrutinized ads in America. Most ads are pre-cleared well before they run. Consumers expect the claims in an ad to be vetted by FDA so what is the study goal in purposely putting in deceptive claims to see how misled is the consumer? I don’t understand an agency testing what would be the result of their own failure to effectively regulate DTC.

Third, what possible help could this study provide in future promotional guidances? False claims are already prohibited. Each branded ad must meet strict FDA criteria for fair balance. A study that proves consumers can be deceived and might be unable to know they are being deceived proves what? Is FDA trying to prove consumers who do not know what is in the approved label can be easily fooled by rogue drug companies? This study might be more appropriate for supplements or other non Rx drug health products that often make unproven efficacy claims in their ads. FDA seems to be asking a question they already know the answer to. If a drug makes deceptive efficacy claims, it is going to be more appealing to consumers. Hello, my new drug cures cancer. You interested?

Fourth, just by doing this study FDA is promoting a negative attitude against DTC. To study purposeful deception is to imply there is a broad history and likelihood that drug companies will engage in false ad making. In 20 years of television DTC ads, there are a only handful of ads that overstated efficacy. Those ads were withdrawn and in a few cases corrective ads were required. In other words why study deception when it almost never happens in DTC ads? Most warning letters are over subjective elements like distracting music or scenes, not over false claims. FDA already has procedures to punish deceptive ads. Is this deeper understanding using mock deceptive ads going to make FDA a better regulator?

Consumers deserve accurate and balanced DTC ads. Any study which helps improve those objectives are welcome. In this case, measuring how well consumers spot false ads does not, in my view, add to better ad development or regulatory guidance.

It is always fun to hear pundits make predictions. Most of the time they are wrong but we eagerly watch experts tell us who will win elections, how much stocks will rise, what the price of oil will be, and which film will win best picture. We have a media that exists to debate these issues 24/7.

So why should I miss out on the prediction game. I really have no way of knowing what will happen in health care, DTC spending or regulation. I do, however, have an informed opinion on where we might end up. So, for what it is worth here goes for 2017.

1. DTC will continue to thrive no matter what the politicians decry about greedy drug companies. We have the first amendment and DTC generally works well as a promotional strategy. True, Congress knows the drug industry is an easy target. They also know that drug marketing employs lots of people in their districts. So they will huff and puff but in the end not adopt any rules to make drug ads harder to execute.
2. Trump is a real wild card as far as drug pricing actions. He may threaten drug companies with Medicare price negotiation and actually mean it. On the other hand Trump knows that forcing prices down could hurt jobs and innovation. More likely he will arm twist drug CEOs to pricing self restraint and then tweet his victories.
3. Obamacare will be drastically altered to be more free market. Mandated coverage will be eliminated and consumers will have more choices what, where and how to buy insurance. Republicans will replace it slowly, however, and be very cautious throwing currently covered Americans off the insured rolls. Free market policies will shift the burden of health care decisions more to consumers and this has numerous marketing implications for drug companies. Price/value will be something drug advertisers must consider in their messaging.
4. The FDA will get an overhaul to be faster decision makers on new drug approval and hopefully that will include the glacial moving OPDP. Nothing against the generally nice folks who work there but please try doing research that actually gets done in a timely fashion. Also, the social media train left years ago but OPDP cannot seem to accept consumers know how to easily one click to see warnings and risks.
5. DTC media mix will continue its evolution towards social media and point of care, but nothing indicates that mass media will decline. Drug companies have better mass media targeting tools and that means getting more effectiveness. In fact more specialty brands are using television because the mass awareness, although inefficient, still brings in enough new customers that justify the expense.
6. Media consolidation is happening in new media. There are starting to be mergers and acquisitions that will eliminate a whole lot of smaller players. Having bigger companies will make it easier to buy larger physician and patient coverage in Point of Care and Internet media. Drug companies like to one stop shop so expect more dollars allocated the easier it gets to buy large scale.
7. Expect more drug company corporate media and DTC advertising efforts to justify drug prices. There are valid reasons for high prices in most cases, but Americans are perplexed why they pay more than other developed countries. It is a very tough sell but Americans are demanding to know what the premium price is getting them.

2017 will be an exciting year for health care marketers as change always breeds risks and opportunities. We have not had such uncertainty since 2009 when Obamacare was formulated.

We are likely to see a much freer market for health care under the new Trump administration. What does that really mean for consumers and providers? How might it affect drug companies? And to those of us in DTC marketing, does a free market help or hurt our business?

America is not currently a true free health care market and has not been for over 50 years. Our someone else pays health care system has made users of health care unaware of costs. Is my service or procedure covered is what we ask. What is my co-pay is what we care about. Our providers make more money when they do procedures and tests. Patients readily accept this extra care as long as it is paid by insurers.

Our government has made our system extremely complex with its variety of programs and regulations. Medicare, Medicaid, The VA, HIPPA, The ACA, the 50 different state requirements, and a myriad of other public and private agencies oversee the most opaque system in the world.

What if we went to a free market where what we spend is truly our money and costs matter? Assume the government gives you a stipend through a tax credit or a cash payment. That is what you have to spend on your healthcare subsidized by government. Anything beyond that you pay. Regulations are loosened to allow you to buy whatever insurance you want, anywhere from an approved company in the 50 states. Health care providers must compete on providing quality care at a price people can afford for services they really need.

Drug companies will need to justify price premiums because consumers are now deciding where to allocate their limited available funds. Insurance companies who are competing on offering low premiums will want to squeeze drug companies as much as possible. That means consumers will have many drug coverage options to choose from and they will not pay higher premiums for me-too drugs. DTC advertising will need to deal with price/value issues.

What about people with pre-existing conditions? This is a complex problem. After all, signing up for insurance generally assumes the negative event has not happened yet. None of us get to buy car insurance after we total our car. So what we need is some way to help people with pre-existing conditions to get help on their costs. This is not insurance, it is compassion from society that prevents people from going bankrupt or dying because they cannot afford care. Instead of calling it insurance and forcing companies to cover these folks, it makes sense to create a special high risk pool subsidized by government.

A true free market is a hard but a doable thing to implement over a decade or so. It means treating health care like other consumer products and shifting purchase decisions to the patient. If prices are transparent, and quality measures are readily available for providers, consumers will make rationale choices.

Free markets give consumers incentives to stay healthy as the cost of prevention are lower than costs of treatment. Many critics say health care is a right better managed by government. They may be right as some developed countries do it well. America can go either way but cannot continue its current system which is neither free market or single payer. Under a free market system we would unleash tremendous forces of innovation that could do great things for patients. It will be a hard road to truly get to a real free market but it is worth a try. After all, that “someone else” paying is really us through higher taxes and insurance premiums and deductibles.  We are paying higher per capita for health care than anyone else in the world so we must consider real change.