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DTC-In-Perspective by Bob Ehrlich

Trump’s Drug Pricing Executive Order: What It Means for Pharma and DTC Advertising

May 12, 2025 0

The monumental Executive Order announced on May 12 is sending a chill through the pharmaceutical industry. President Trump is proposing to significantly lower drug prices in the U.S. by implementing a most favored nation pricing model. In essence, this means that for drugs paid for by the government, the price would be set at the lowest rate charged by any developed country.

There’s a lot to unpack here.

First, this doesn’t apply to all drugs—only those covered under Medicare and Medicaid. Most drugs that patients pick up at a retail pharmacy are not impacted. Also worth noting: legal challenges are expected.

Even if drug profits dip, DTC advertising is not the obvious place to cut. More importantly, DTC delivers a solid ROI—and that’s not going to change.

The rationale from the administration? Trump argues there’s no justification for Americans to pay more for prescriptions than people in Europe, Canada, or other developed nations. According to him, we’re subsidizing the world’s pharmaceutical innovation by footing the entire R&D bill, while foreign countries enjoy cheaper prices due to imposed price controls. This Executive Order aims to put pressure on those countries to contribute more—and Trump intends to tie this issue into future trade negotiations.

Even though the order currently targets only a subset of drugs, the broader industry fear is that it sets the stage for sweeping price controls. Could Congress eventually mandate that all branded drugs follow a most favored nation pricing strategy? That would have massive repercussions—crushing drug company margins and threatening the long-term viability of R&D pipelines.

Faced with this possibility, some pharmaceutical companies may even choose to cut off sales to lower-paying countries. That would be a strategic move to drive up international pricing and allow more equitable pricing for American consumers.

So—will this shake up affect DTC investment?

In my view, probably not. Even if drug profits dip, DTC advertising is not the obvious place to cut. Drugmakers still need to drive demand, especially in a competitive landscape. While companies might scale back some expenses, the $8 billion spent annually on direct-to-consumer advertising is modest compared to total promotional budgets and operational costs. More importantly, DTC delivers a solid ROI—and that’s not going to change.

What this Executive Order does indicate, however, is that the pharmaceutical industry is clearly in the crosshairs. This isn’t your traditional business-friendly Republican approach. Trump and Bernie Sanders may not agree on much, but when it comes to populist pressure on drug pricing, they’re surprisingly aligned.

While DTC advertising may escape immediate scrutiny, this move shows Trump is willing to break from the norm. Is a DTC ban still on the table? I’d say not right now—but let’s not be naïve. The populist momentum is real, and DTC marketers should stay alert, committed to responsible and effective advertising.

Bob Ehrlich

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DTC-In-Perspective by Bob Ehrlich

The Case for More Drug Advertising: Are FDA Rules Holding Patients Back?

March 18, 2025 0

I recently came across a compelling article by Dr. John Goodman, a renowned economist and healthcare scholar, in Forbes (11/24), titled “What the FDA Gets Wrong About Drug Ads”. In it, Dr. Goodman argues for expanding drug advertising—without the mandatory listing of side effects in commercials.

His reasoning? Underutilization of prescription drugs is leading to widespread undertreatment of serious conditions like diabetes and hypertension. He asserts that direct-to-consumer (DTC) advertising plays a critical role in patient awareness, prompting people to ask their doctors about potential treatment options. So, if drug ads effectively drive doctor-patient conversations, why not focus on promoting benefits and leave discussions about risks and side effects to the professionals?

The real threat to public health isn’t excessive drug advertising—it’s the overly restrictive regulations that limit the promotion of valuable treatment options.

Dr. Goodman is particularly critical of the FDA’s new requirements (implemented 11/24), which mandate that TV drug ads include supers (on-screen text) matching the voiceover. He argues that this information overload makes it harder for consumers to absorb key messages. Instead, he suggests eliminating side effect disclosures in commercials altogether, allowing pharmaceutical companies to advertise more freely and increase public awareness of treatment options.

The Real Risk? Over-Regulation, Not Overexposure

According to Dr. Goodman, the real threat to public health isn’t excessive drug advertising—it’s the overly restrictive regulations that limit the promotion of valuable treatment options. He also criticizes the FDA’s strict stance on off-label drug advertising, despite the fact that many doctors already prescribe medications for off-label uses.

I completely support Dr. Goodman’s proposal. No other industry is forced to dedicate 50% of ad time to potential risks. Alcohol, fast food, high-speed cars, risky investments, and even over-the-counter medications all have risks—but none are subject to the same regulatory burdens as prescription drugs. Yes, medications can have side effects, but if the goal is to increase treatment adherence and improve public health, then drug companies should be allowed to communicate more freely about their products.

A Sensible Compromise

The FDA is unlikely to completely eliminate fair balance requirements, but a middle ground could be reached. Why not permit simple ads that encourage consumers to ask their doctor if a specific drug is right for their condition? A 15-second ad mentioning a drug and the condition it treats—without an exhaustive list of risks—wouldn’t endanger public health. Instead, these brand-and-condition ads could direct consumers to a website for full safety details.

This approach aligns with the “common sense” messaging that has resonated politically in recent years. The FDA should take a similar view when it comes to drug advertising. If the ultimate goal is to get more Americans treated and adhering to their medications, then allowing pharmaceutical companies to better promote their solutions just makes sense.

Do I think the FDA will move toward deregulation, given Mr. Kennedy’s views? No. But Kennedy is wrong about the negatives of drug advertising. We need to shift the conversation to the positives—because ultimately, more awareness and access to treatment could help make America healthier.

Bob Ehrlich

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DTC-In-Perspective by Bob Ehrlich

DTC Can Impact Coverage

March 18, 2025 0

One of the effects of DTC advertising is its influence on healthcare providers and insurers. Consumers who see DTC ads, of course, ask their doctors about the advertised drugs. But what’s less discussed is how DTC advertising can influence the formulary decisions made by health insurance companies. Insurers—both private and government-controlled—don’t like DTC ads.

Consumers can be a pesky bunch. Insurers don’t want the public pressuring them to cover more expensive drugs. In some cases, they argue that older drugs are just as effective and much cheaper. In others, they insist that newer drugs need more long-term study before widespread adoption. At the end of the day, insurers and the government want to control which drugs are utilized.

DTC creates awareness of new treatments. Consumers want the best options available and hate being told that the latest drug isn’t on formulary. Those consumers then complain to their elected representatives, who in turn criticize insurers for restricting access. The insurers get painted as callous and greedy. That doesn’t let drug makers off the hook either—they’re criticized for high prices.

DTC creates awareness of new treatments. Consumers want the best options available and hate being told that the latest drug isn’t on formulary.

Weight Loss Drugs: A Case Study in DTC Pressure

A great example of this DTC-driven formulary pressure is the new GLP-1 weight loss drugs like Wegovy and Zepbound. Health experts say these drugs could help combat the obesity epidemic. DTC ads for both highlight significant weight loss results. But insurers hate covering these medications, which cost over $1,000 a month. Consumers, meanwhile, are frustrated that only the wealthy can afford them out of pocket. Thanks to DTC, demand has skyrocketed, and the pressure is mounting on insurers to expand coverage.

The Doctor-Patient Dynamic and the Role of DTC

One of the usual criticisms of DTC advertising is that it creates friction between patients and doctors—that patients, uninformed and swayed by marketing, shouldn’t be pressuring doctors to prescribe specific drugs. But there’s another side to this. DTC can also help doctors advocate for coverage when they believe an expensive drug is the best choice for a patient.

DTC as a Consumer Voice in Healthcare

Our healthcare system is a complicated beast, and critics of DTC rarely acknowledge how consumers actually benefit from its influence. The reality is that DTC can help push insurers to cover new treatments faster. Weight loss drugs, for example, will likely see broader coverage sooner rather than later, thanks to the hundreds of millions spent on DTC. At the same time, Lilly and Novo Nordisk will need to lower prices over time to expand access.

We all like to believe that patient care is the top priority when it comes to healthcare coverage. But we know that private insurer profits, government budgets, and drug company pricing all play a role. DTC advertising is one of the few ways consumers can make their voices heard in that equation.

Bob Ehrlich

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DTC-In-Perspective by Bob Ehrlich

Congress Acts on Telemedicine Drug Advertising Regulation

March 4, 2025 0

The unbalanced playing field between pharmaceutical manufacturers and telemedicine sites selling versions of approved drugs is finally being addressed in Congress. Congress acts on telemedicine drug advertising as senators push for FDA oversight. A number of large telemedicine direct sell sites have emerged in recent years. These sites diagnose, prescribe, and ship versions of popular drugs. When they advertise, they are not currently held to the same regulation as pharmaceutical companies.

Sites like Hims & Hers advertise compounded drugs or the forms of drugs without fair balance requirements. Frequently prescribed categories are weight loss, antidepressants, insomnia, and erectile dysfunction. They are not currently regulated by FDA even though they are manufacturing drugs and advertising them.

Senators Durbin (D-IL) and Marshall (R-KS) are co-sponsoring a bill to require FDA regulation of advertising from these telemedicine sellers.  Pharmaceutical companies have been at a competitive disadvantage because these sites often use compounded versions or created combinations of drugs. Drug companies lose sales because these telemedicine drugs often are priced lower.

Telemedicine sites have made diagnosis, prescription, and fulfillment easy for consumers. The problem is they can make efficacy claims without risk and warning information. Drug makers are held to a much higher standard and therefore have an unfair competitive landscape. These direct sale companies are offering a great perceived benefit for consumers. Answer a few medical questions, get prescribed, and receive the drug by mail. I imagine few consumers are turned down from getting prescriptions under the telemedicine process.

Telemedicine sites have made diagnosis, prescription, and fulfillment easy—but without the same regulatory standards as pharmaceutical companies, is it fair competition?

Congress is worried about inappropriate prescribing and the overpromise of efficacy without fair balance, prompting action on telemedicine drug advertising. Drug makers are concerned that compounders are violating patents and creating versions of their drugs which are not going through rigorous quality controls.

While DTC drug advertising receives lots of criticism, it is the most heavily regulated advertising category. Hopefully, that rigorous regulation will now apply to the burgeoning telemedicine industry.

Bob Ehrlich

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DTC-In-Perspective by Bob Ehrlich

Kennedy Will Be Confirmed.

February 11, 2025 0

Robert Kennedy Jr. was favorably voted out of the Senate committee 14-13 on 2/4 and will now go before the full Senate for confirmation. This was the key hurdle passing a divided committee where Sen. Cassidy was the Republican who was the swing vote. Cassidy is a physician who was troubled deeply by Kennedy’s vaccine stance. Yet he voted yes as he was assured that Kennedy will not ban any approved vaccines. Kennedy will almost certainly be confirmed, albeit it narrowly, in the full Senate.

I watched the two days of Kennedy hearings last week. Nothing he said allayed my fears about his feelings toward the pharmaceutical industry. The problem with Mr. Kennedy is his skepticism about many drug treatments. His public attacks mostly have been focused on vaccines but clearly his testimony was anti-prescription drugs.

His most alarming comment was to say prescription drugs are the third leading cause of death in the United States. I will not spend much time refuting this incendiary comment except to say it is grossly misleading. All drug treatment is a benefit / risk assessment and while true serious adverse events can kill people, the overwhelming evidence is benefits far outweighs risks.

He is right that diseases among children have increased the past few decades. No one in public health has objections to his goal of determining why autism, diabetes, food allergies, and ADHD have increased. Perhaps there is an explanation related to diet, food ingredients, pollution, or increased diagnoses. By all means we should allocate public funds to finding out. The problem with Mr. Kennedy is he seems to have already figured it out and his numerous books, speeches, and policy statements say things that are untrue, exaggerated, or based on scant evidence.

His most alarming comment was to say prescription drugs are the third leading cause of death in the United States.

After seeing the speed the Trump team is acting on many policy issues, would a Kennedy HHS be given the go ahead to remake our health care system at warp speed? Would DTC be a casualty of that tear it down approach from Kennedy? While I know we have constitutional protection for business free speech, will Kennedy act anyway to ban DTC and await court challenges?

We can only hope our industry lobbyists can make the case that banning or severely restricting DTC is a bad idea. There are many steps HHS can take short of a total ban including making television harder to execute through new guidances, finding more violative ads, slowing down pre-clearance reviews, and leveraging price negotiations to get companies to “voluntarily” restrict DTC.

I am not expecting Armageddon, but this time the threats feel different. I would be surprised if DTC is not affected in some negative way under the new Kennedy-led HHS.

Bob Ehrlich

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DTC-In-Perspective by Bob Ehrlich

Congress and DTC Price Disclosure

January 30, 2025 0

The idea of mandating drug price disclosure in DTC ads is here again. A bi-partisan Senate bill was just introduced by Senators Durbin, Grassley, and six others calling for mandatory listing of the wholesale acquisition cost in ads. It is called The Drug-Price Transparency for Consumers Act of 2025.

As with prior attempts, this is bad policy. List prices are not what consumers pay. They are nowhere near what the overwhelming proportion of patients will eventually pay if insured. This bill is meant to discourage DTC advertising by creating a false belief that many drugs are “outrageously” expensive. Their rationale is consumers deserve to know the price of drugs being advertised. They say many other products list their price in ads so why not list them for drugs.

The problem is consumers only care what the final out of pocket cost is to them. Drug pricing is overly complex and that is a legitimate policy issue. Telling consumers a cancer drug is $5,000 a month in a DTC ad is not at all helpful to them if they actually pay $50 with insurance. All that faux disclosure might do is scare them into thinking they cannot afford it.

The bill sponsors’ logic is faulty that listing price creates transparency and price competition. There is no evidence that listing drug prices creates competition given the list price is nowhere near actual patient price. Yes, it may work for automobiles, but not for prescription drugs.

This bill is a blatant attempt to discourage drug ads because payers would prefer consumers not request information on high-priced drugs. Government, insurers, and other payers want to be the sole deciders on what drugs patients can get. DTC is inconvenient for them if a doctor prescribes a high-priced therapy. Does Congress think doctors are prescribing a $100,000 drug for cancer just because a consumer saw an ad?

If this bill passes, drug makers will have to add another useless super in the ad. They can do it if required but will not be intimidated into dropping their DTC ads. Clearly this bill is something the courts might weigh in on as the forced price disclosure inhibits commercial free speech.

Telling consumers a cancer drug is $5,000 a month in a DTC ad is not at all helpful if they actually pay $50 with insurance.

Unfortunately, this bill may just be one of many tactics Congress or HHS will use to try to discourage DTC ads. Robert Kennedy, Jr. wants to ban DTC TV ads outright, but that is unconstitutional so expect approaches that make it harder to do DTC. That could be through tax policy on deductibility of advertising costs, increased OPDP interpretations of violative language, more requirements for fair balance, and lobbying pressure by insurers and payers to limit DTC.

I get the frustration that Americans pay more for prescription drugs than other developed countries. This is a highly charged issue and deserves policy debate. Limiting DTC advertising for lawful products will not affect prices. That $8-10 billion being spent on DTC annually is not significantly driving up costs given our drug spending is over $500 billion annually. Of course, I admit drug companies advertise to increase demand. Given an average ROI of 2 to 1, advertising likely adds $16-20 billion to sales or about 2%. Would drug companies cut prices if they did not spend on DTC? No, they would reallocate to other promotional techniques or other investments.

It is time for Congress to stop trying to ban or restrict DTC. They are grandstanding to the American people with full knowledge their bill is not a real solution to reducing drug costs.

Bob Ehrlich

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DTC-In-Perspective by Bob Ehrlich

Trump and Pharma

November 12, 2024 0

The election of Donald Trump is having pharmaceutical companies evaluate how things may change in terms of legislation and regulation. Trump is not yet clear on his moves regarding pharma. In his first term, he criticized the drug companies for pricing higher in the U.S. than other developed countries. Republicans in Congress have generally not allowed punitive legislation on price controls. They understand the negative impact price controls would have on R&D. Trump wants lower prices and that is publicly popular.  Acting on PBMs would be one option. Another would be allowing and promoting reimportation of drugs.

The DTC Industry should be nervous about Robert Kennedy Jr. being given a large role in healthcare policy. He said on 11/4 that he wanted to get Trump back in D.C. so they can “ban pharmaceutical advertising on TV.”  Scary comment. Kennedy is known for anti-vaccine sentiment and the desire to get corporate influence reduced. He is anxious to focus on prevention of disease which he feels is neglected in budgetary decisions. Kennedy thinks DTC advertisers exert influence on editorial coverage. Anyone who has watched news coverage knows the drug industry has not historically been favorably covered.

I doubt Trump will act on DTC advertising. He did not in his first term and a Republican Congress will recognize the free speech rights to advertise. I do expect Trump to speed up the regulatory drug approval process and that should be a net positive for innovation. In fact, expansion of drug use and DTC ads promoting such should help in the disease prevention goal of Kennedy.

Will FDA be asked by Kennedy and Trump to make DTC harder to execute? It is already harder with the latest OPDP rule recently implemented. Can it be made so restrictive that DTC ads are impractical? That is certainly a possibility, but the drug, media, and advertising agency lobby is strong and persuasive. Usually, the pro advertising forces have prevailed. Republicans have historically been pro-advertising, and I expect Trump not to act even if Kennedy proposes a ban.

Uncertainty is never helpful in DTC planning and the anti-DTC proponents will make a lot of noise. I remain confident, however, that no actions will be taken to ban or further restrict DTC.

Bob Ehrlich

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DTC-In-Perspective by Bob Ehrlich

DTC in Perspective: Drug Prices in DTC Ads? Bad Idea Gets Traction.

September 5, 2018 0

The Senate recently passed an amendment to a larger health care bill that requires drug prices be disclosed in DTC Ads. The Durbin amendment was adopted with bipartisan support. It really just gives HHS a million dollars to study a way to require the disclosure. What is clear is this idea has strong support from President Trump, Congress, HHS Secretary Azar, and the American Medical Association. So, like it or not, the drug advertisers may be forced to add some price information to ads.

Bob Ehrlich
“Drug makers may be forced to add… price information to ads.”
-Bob Ehrlich

On the surface, that list price disclosure seems reasonable. We see MSRP in car ads, so we know whether it is a premium or economy car. Not that we don’t know that already but it is not unreasonable. For cars, we know we will likely pay somewhat less than MSRP but we do know the range a Mercedes will cost us. Congress thinks consumers deserve to know the price of drugs they see advertised. To Congress that seems like it would help consumers decide if this advertised drug should be considered.

Drug pricing is not like car pricing. Consumers pay much less than the list price and sometimes pay nothing for the $50000 drug for cancer. Admittedly, drug pricing is a Byzantine process that confounds most of us. Each insurance company, PBM, and government payer negotiates prices. Each consumer depending on their insurance pays a different price no way near the list price. Sometimes the consumer would pay out of pocket more for their OTC cough medicine than the $50000 cancer drug.

So how should drug companies disclose drug prices? If the list price is not anywhere near what consumers pay, then how does disclosing it help them? It does not. It helps insurance companies in making DTC more difficult for drug companies to execute. The knowledgeable legislators know that if they force drug makers to talk about price that may discourage them from doing DTC Ads for expensive drugs. Drug makers advertising the $100000 cancer drug may decide that DTC is not worth trying to explain the complexities of drug pricing or face the barrage of criticism for having a sticker shock price.

I think this is the real reason for this amendment. Embarrassing drug companies they hope will put a chill on DTC for cancer drugs, biologics for arthritis, Crohn’s, and other new premium drugs. Of course, all drugs will face a guidance on how pricing needs to be discussed. Somehow FDA will make disclosure a time consuming step in a DTC ad. That will add 10-15 seconds to the ad and may make them difficult to execute. Their hope is to get drug companies to stop doing DTC.

So the good news is it will take FDA a while to study and draft guidance for disclosing price. This lag may allow the powerful advertising lobby to show how impractical this disclosure requirement will be. My guess is we may have some compromise that speaks in terms of ranges of price. That is something like “most patients will pay much less than the price listed depending on your insurance coverage.” Or, drug makers may be able to say “the average price paid by consumers is x.”

It may be illegal to require drug makers to disclose price under commercial free speech grounds. I am sure the advertising lobby will argue this inhibits commercial speech. They would have a strong case based on precedent.

My advice to the agencies is to be ready to deal with adding some price statement but I am sure it will be a few years before FDA can figure out how best to do this. They research everything they do and that will take a long time to study. DTC price disclosure sounds great but is just a bad idea that will not help patients.

Bob Ehrlich