The AMA versus $4.5 Billion

Say your job description was: stay at home and watch television. Sweet, huh?

Well during your hard day at work, you would see roughly 80 commercials for prescription drugs. That number has been growing since 1986, when ads for Seldane began appearing – the first ever from a major pharmaceutical company. In fact, since the Federal Trade Commission (FTC) loosened its rules (to allow direct product mentions) in 1997, America’s intake of prescription drugs has nearly doubled.

Well, yesterday the highly respected doctors group, the American Medical Association (AMA), proposed a ban on that very advertising. That would mean tying off about $4.5 billion in marketing dollars spent selling Ambien, Viagra and other brands that are now household names.

There’s been a backlash by doctors in reaction to patients demanding these drugs – possibly when alternative drugs could be cheaper and/or more effective. Physicians also resent having to clear up misconceptions created by drug ads. Their largest concern is the escalation of prices due to commercially driven promotions.

The pharmaceutical industry respectfully disagrees.

They claim that direct-to-consumer (DTC) ads aim to provide “scientifically accurate information to patients so that they are better informed about their health care and treatment options,” said Trish Stow of the trade group Pharmaceutical Research and Manufacturers of America.

In my opinion, it’s a little from column “A” and a little from column “B” when judging the validity of both arguments. There is an educational, as well as a healthy empowerment, component at work here. Unfortunately, this also smacks of Big Pharma cashing in on fear. The aforementioned Seldane’s profits before their 1986 campaign were at the $34 million level. After the campaign ran, profits lifted beyond their $100 million target to a whopping $800 million.

There’s power in advertising, no?

Now, the reality of this story is that the AMA has no regulatory impact on the issue. The US Congress would have to take action on the matter – and likely turn down some Big Pharma dollars. Lawmakers have been unwilling to do so in the past. And not only would lobbyists lose revenue, but the media powers that be (broadcast, print and online giants) would lose some crucial income.

In 2006, the AMA pushed for a moratorium on DTC ads. Hoping to head off congressional action, the pharmaceutical companies responded by attempting to self-regulate. In 2008, Big Pharma agreed to a six-month waiting period on ads for new drugs, following their approval by the Food & Drug Administration (FDA).

As a result of the tremendous growth in our digital world, this controversy has spread to online channels and social media. In response, the FDA has now outlined some rules regulating paid relationships between pharmaceutical manufacturers and celebrity endorsers. And they have prevented some high-profile infractions. In fact, an Instagram post from Kim Kardashian was pulled by the FDA for breaking the rules. The Washington Post details it here.

But where this goes is probably not far from where we are now.

The AMA can simply point the spotlight, and can only be an observer to the action.

As far as Big Pharma goes, there are certainly some good and bad intentions. The underestimated element here is advertising. The power of storytelling, information and consumer empowerment needs to be wielded responsibly.

Reconciling this issue with all sides could be a hard pill to swallow.