[Senate Hearing 107-986]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-986
 
                  DIRECT TO CONSUMER ADVERTISING (DTC)

=======================================================================

                                HEARING

                               before the

     SUBCOMMITTEE ON CONSUMER AFFAIRS, FOREIGN COMMERCE AND TOURISM

                                 OF THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 24, 2001

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation






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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

              ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska
    Virginia                         CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana            KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon                    SAM BROWNBACK, Kansas
MAX CLELAND, Georgia                 GORDON SMITH, Oregon
BARBARA BOXER, California            PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina         JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri              GEORGE ALLEN, Virginia
BILL NELSON, Florida
               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel
                  Mark Buse, Republican Staff Director
               Jeanne Bumpus, Republican General Counsel
                                 ------                                

     SUBCOMMITTEE ON CONSUMER AFFAIRS, FOREIGN COMMERCE AND TOURISM

                BYRON L. DORGAN, North Dakota, Chairman
JOHN D. ROCKEFELLER IV, West         PETER G. FITZGERALD, Illinois
    Virginia                         CONRAD BURNS, Montana
RON WYDEN, Oregon                    SAM BROWNBACK, Kansas
BARBARA BOXER, California            GORDON SMITH, Oregon
JOHN EDWARDS, North Carolina         JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri              GEORGE ALLEN, Virginia
BILL NELSON, Florida




                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 24, 2001....................................     1
Statement of Senator Dorgan......................................     1
Statement of Senator Fitzgerald..................................    48
Statement of Senator Wyden.......................................     2

                               Witnesses

Calfee, John E., Ph.D., Resident Scholar, American Enterprise 
  Institute......................................................    20
    Prepared statement...........................................    22
Chockley, Nancy, President, National Institute for Health Care 
  Management Foundation..........................................    16
    Prepared statement...........................................    18
Cloutier, Mark, Policy Director, RxHealth Value..................    49
    Prepared statement...........................................    51
Dolinar, Richard, M.D., Endocrinologist, Endocrinologist 
  Associates.....................................................    59
    Prepared statement...........................................    61
Glover, Gregory J., M.D., J.D., on behalf of The Pharmaceutical 
  Research and Manufacturers of America..........................    34
    Prepared statement...........................................    36
Ostrove, Nancy, Ph.D., Deputy Director, Division of Drug 
  Marketing, Advertising, and Communications, Food and Drug 
  Administration.................................................     3
    Prepared statement...........................................     5
Shaw, Michael S., M.D., Executive Director, EthicAd'..    52
    Prepared statement...........................................    54
Wolfe, Sidney M., M.D., Director, Public Citizen's Health 
  Research Group.................................................    29
    Prepared statement...........................................    32


                  DIRECT TO CONSUMER ADVERTISING (DTC)

                              ----------                              


                         TUESDAY, JULY 24, 2001

                                       U.S. Senate,
    Subcommittee on Consumer Affairs, Foreign Commerce and 
                                                  Tourism, 
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:33 p.m. in 
room SR-253, Russell Senate Office Building, Hon. Byron Dorgan, 
Chairman of the Subcommittee, presiding.

              STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. The hearing will come to order.
    My name is Senator Dorgan. I am Chairman of the 
Subcommittee, and I will be joined by Senator Fitzgerald and I 
believe Senator Wyden and some others on the Subcommittee. They 
are delayed with other Senate business on the floor and in 
other committees. So we are going to begin without them and 
they will join us later.
    The hearing today is to discuss the issue of prescription 
drugs advertising directed to consumers, what is it about, what 
is its purpose, what does it do to the cost of prescription 
drugs in this country. We want to talk about that from a range 
of different perspectives.
    It is hard to turn on the television or open a newspaper or 
a magazine these days without seeing an advertisement for a 
prescription drug. I have a few of them here. You have the 
opportunity with this to vote no on your favorite all-star for 
the all-star game, the 2001 all-star game in Seattle. You get 
to vote for your favorite all-star and also are able to see 
that you ought to be considering taking Claritin. It is an 
advertisement for Claritin on the all-star ballot.
    This is a full-page ad from the Washington Post a month or 
so ago. It says ``What is a better way to lower my blood 
sugar?'' Then it advertises a medicine to do so, with a free 
30-day supply coupon, despite the fact that, of course, you 
must go to a doctor and get a prescription. This actually 
offers a free 30-day supply coupon for this medicine.
    This is a Ladies Home Journal, a rather popular magazine. I 
just pulled out a few of the ads in this magazine. It is full 
of direct advertising to consumers. ``Are you someone who is 
forgetful? Are you repeating questions? Are you having trouble 
finding words?'' It might apply to all of us, Senator Wyden. If 
so, here is a prescription medicine you need to have. Go see 
your doctor, tell him what you want prescribed for you.
    What about estrogen loss? Here is what you ought to do, go 
tell your doctor about those symptoms. Rheumatoid arthritis, 
here is a way to solve it: go tell your doctor.
    Dan Reeves, who I saw last night on television in fact, is 
also here in this magazine. Dan Reeves says: ``Lowering my high 
cholesterol became even more important than football.'' So this 
Atlanta Falcons coach says to me last night on television, and 
to you and to the world in this ad, that we ought to be 
considering Zocor and we should talk the with our doctor about 
Zocor.
    Direct-to-consumer advertising for medicines that are 
prescribed by a doctor and available to those the advertising 
is directed toward only with the prescription of a doctor, what 
is its purpose, is the impact, good, bad? Does it increase the 
cost of prescription drugs? In the last couple of years we have 
had increases in the cost of prescription drugs, both because 
of utilization and also price inflation, of 18, 19 percent a 
year. Is some of that caused by direct-to-consumer advertising? 
Are there benefits to it? If so, what are they?
    We want to talk about all of these issues today, and we 
have invited a number of witnesses what I think will be able to 
give us some information about it from a number of different 
perspectives.
    I could go through a whole series of data that talks about 
increased prices for prescription drugs. I want to just make a 
point about this hearing. I happen to think that there are 
wonderful, life-saving, breath-taking new prescription drugs in 
this country, good for those who develop them, good for those 
who market them. Part of it comes from public funding and 
investment in public-funded research. Part of it comes from 
privacy research.
    But life-saving drugs only save lives if you can afford 
them. Those who cannot afford a life-saving drug are not going 
to have their lives saved by that particular drug. So we want 
to talk about all of these issues today, focusing especially on 
the questions that have been raised increasingly by people: why 
am I the target of a substantial amount of advertising for 
prescription drugs that can only be achieved by me with a 
prescription by a doctor. Doctors increasingly tell us that 
they have patients coming to their office telling them what 
kind of medicine they want. That is a result of prescription 
drug direct advertising to consumers.
    This is a rather recent and new approach. Only in recent 
years have we had direct advertising to consumers of 
prescription drugs. So this hearing will explore the impact of 
that.
    Let me call on my colleague Senator Wyden from Oregon for a 
comment.

                 STATEMENT OF HON. RON WYDEN, 
                    U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you, Mr. Chairman, and thank you 
particularly for your leadership. You have been extremely 
involved in a whole host of prescription drug issues. You and I 
have been tackling these issues now for 20 years and it is a 
pleasure to be able to team up with you. This is exactly what 
the Consumer Affairs Subcommittee ought to be doing, is 
tackling these kinds of issues, and I commend you for your 
effort.
    I have been interested in these questions since my days as 
director of the Oregon Gray Panthers, and I think you are 
right, Mr. Chairman, there is no question that these ads have 
had an extraordinary impact on the Nation's senior citizens in 
particular. I think it is important to look now at the 
ramifications of what these ads mean.
    Suffice it to say there are a whole host of issues that 
have to be addressed and a variety of competing interests that 
need to be balanced. I do not think that the American people 
want us in the United States Senate to be the arbiter of what 
information they get as long as that information is accurate. 
But at the same time, they do think that we ought to look at 
the health implications, for example, of massive amounts of 
advertising, as you have touched on. That is an area that 
really has not been examined.
    There are First Amendment rights in this country to 
communicate and the government's policy has been that accurate 
information ought to be made available. But at the same time, 
one ought to take a longer view, a view that gets out beyond 
just looking at an individual prescription and look at the 
health consequences of massive amounts of advertising, and that 
has not been done.
    The other aspect of all of this is that even without the 
kind of advertising that has gotten most of the attention today 
in the magazines and television and other sources that have 
been touched on well by you, by the time many older people and 
consumers come to their doctor's office they come today armed 
with an enormous amount of information from the Internet. So 
clearly as we look at the ways in which consumers get 
information, we are going to have to look at all of the various 
sources, and the Internet--we saw that yesterday in our e-
health hearing at one of our other subcommittees--has had 
revolutionary impact in terms of people's access to information 
and its consequences, both for their pocketbook and for their 
health.
    So I look forward to working with you and again appreciate 
your leadership.
    Senator Dorgan. Senator Wyden, thank you very much.
    Let me call our first witness. The first witness today will 
be Dr. Nancy Ostrove, Deputy Director of the FDA's Division of 
Drug Marketing, Advertising, and Communication. If Nancy 
Ostrove would come forward I would appreciate it. We would ask 
those in the audience to please turn off cell phones.
    Dr. Ostrove, thank you very much. You are, I understand, 
going to discuss with us the rationale behind the FDA's 1997 
advertising guidelines. We appreciate your being here and hope 
that you will address in your testimony some of the issues that 
we raised.

STATEMENT OF NANCY OSTROVE, Ph.D., DEPUTY DIRECTOR, DIVISION OF 
               DRUG MARKETING, ADVERTISING, AND 
          COMMUNICATIONS, FOOD AND DRUG ADMINISTRATION

    Dr. Ostrove. I hope to. Good afternoon. I am Nancy Ostrove, 
Deputy Director of the Division of Drug Marketing, Advertising, 
and Communications at the FDA. We are the group that regulates 
prescription drug promotion. Thank you very much for inviting 
us to discuss our oversight of what we call DTC, the promotion 
of prescription drugs directly to consumers.
    FDA looks at DTC as kind of a double-edged sword. There is 
real potential value in getting patients to recognize the 
symptoms or the non-symptoms of undertreated conditions and 
getting them treated. Ads can help in this respect. There is 
also the potential for increasing the inappropriate use of 
medications for patients who do not need them or should be on 
other medications.
    The available research in this area is equivocal. You can 
find support for just about any position you want. My written 
testimony touches on some of the research we have conducted or 
examined. What it adds up to is that FDA is not aware of any 
evidence that DTC promotion is increasing inappropriate 
prescribing. On the other hand, there is evidence that DTC 
promotion may be encouraging patients to obtain additional 
information about their conditions and products and to talk to 
their health care providers about health issues that they have 
not raised before.
    There are three important things to understand about our 
authority. One is that the act and the regulations focus on the 
content, not the existence, of prescription drug promotion. Two 
is that the law does not make a distinction between targeted 
audiences. The law has never banned prescription drug 
advertisement to consumers. Up until the early 1980's it just 
was not done. Three, the act specifically prohibits us from 
requiring pre-clearance of advertisements except under 
extraordinary circumstances.
    My written testimony also contains some details of the 
history of DTC promotion, but for today let us start in 1985 
with FDA's announcement that the regulations for overseeing 
promotion directed toward health care professionals also 
provide sufficient safeguards to protect consumers. After we 
made this announcement, we started seeing more and more print 
advertisements.
    But the current debate over DTC did not really heat up 
until we issued a draft guidance that specifically addressed 
broadcast. You see, the regulations had always allowed TV and 
radio ads. Any ad, print or broadcast, that makes a claim about 
a product also has to include the product's most important risk 
information. Broadcast ads also have to do one of two other 
things. They either have to give every single risk from a 
product's approved labeling or have a mechanism for ensuring 
that the audience can get the labeling.
    In the late 1980's product sponsors felt they could not 
include every single risk in a TV ad and get the networks to 
air the ad--they still believe that--and FDA was not sure that 
it was feasible to have a mechanism that would ensure that 
patients could get the product information required as an 
alternative to presenting every single risk.
    But by the mid-1990's many changes had occurred in the 
marketplace, and in technology, and that included increasing 
acceptance of the Internet, increased availability of print 
ads, and common use of toll-free telephone numbers to get 
information. Given these changes, we came to believe that 
sponsors could in fact ensure that consumers could get the 
additional product information conveniently.
    So in 1997 we issued a draft that we finalized in 1999 of 
guidance that gave advice on how sponsors could meet the 
regulatory requirement for product information disclosure for 
broadcast ads by giving references to multiple sources of 
information; not just one source but many. At the time we 
issued the guidance we said that we would assess the impact on 
the public of it and of DTC promotion in general.
    We closely monitor DTC promotion and especially broadcast 
ads to ensure that the information that consumers need to 
understand any claims and the product's risks is understandably 
presented. Even though the sponsors do not have to submit their 
promotional materials until the time they appear in public, 
most sponsors voluntarily submit the broadcast ads to us for 
review and comment.
    Because of this voluntary cooperation, we believe that we 
review most product claim broadcast ads before they appear, 
although we do not know in truth whether we review most 
reminder and help-seeking ads.
    To sum up, at this time we are not aware of any evidence 
that DTC promotion is harming the public health. However, we 
continue to examine the issue. We intend to continue closely 
scrutinizing DTC promotion, working with industry to ensure 
that broadcast ads comply with regulatory requirements, and 
taking timely enforcement action when it is appropriate.
    Thank you for your patience. I will be happy to answer any 
questions.
    [The prepared statement of Dr. Ostrove follows:]

    Prepared Statement of Nancy M. Ostrove, Ph.D., Deputy Director, 
 Division of Drug Marketing, Advertising and Communications, Food and 
                                  Drug
                             Administration
Introduction
    Mr. Chairman and Members of the Subcommittee, I am Nancy Ostrove, 
Deputy Director of the Division of Drug Marketing, Advertising, and 
Communications (DDMAC) of the Center for Drug Evaluation and Research 
(CDER), Food and Drug Administration (FDA or the Agency). DDMAC 
regulates prescription drug promotion and helps ensure that FDA-
regulated industry complies with the applicable provisions of the 
Federal Food, Drug, and Cosmetic (FD&C) Act and implementing 
regulations.
    I am here today to talk about promotion that manufacturers of 
prescription drugs (product sponsors) direct toward consumers and 
patients. This is referred to as ``direct-to-consumer'' promotion or 
DTC. Such promotion uses multiple avenues for reaching lay audiences, 
including, but not limited to: television and radio advertisements, 
print advertisements, telephone advertisements, direct mail, videotapes 
and brochures.
    It is important to understand the scope of FDA's authority in this 
area. It is also important to understand the different types of 
advertisements that are directed toward consumer audiences.
Statutory and Regulatory Authority
    The FD&C Act and regulations do not distinguish between 
professional and consumer audiences. Section 502(n) of the FD&C Act 
specifies that prescription drug advertisements must contain ``a true 
statement of . . . information in brief summary relating to side 
effects, contraindications, and effectiveness'' of the advertised 
product. The implementing regulations (Title 21, Code of Federal 
Regulations [CFR] Section 202.1), originally issued in the 1960s, 
specify, among other things, that prescription drug advertisements 
cannot be false or misleading, cannot omit material facts, and must 
present a fair balance between effectiveness and risk information. 
Further, for print advertisements, the regulations specify that every 
risk addressed in the product's approved labeling must also be 
disclosed in the advertisements.
    For broadcast advertisements, however, the regulations require ads 
to disclose the most significant risks that appear in the labeling. The 
regulations further require that the advertisement either contain a 
summary of ``all necessary information related to side effects and 
contraindications'' or provide convenient access to the product's FDA-
approved labeling and the risk information it contains.
    Finally, the FD&C Act specifically prohibits FDA from requiring 
prior approval of prescription drug advertisements, except under 
extraordinary circumstances. Also, the advertising provisions of the 
FD&C Act do not address the issue of drug product cost.
Types of Advertisements
    There are three different types of ads that product sponsors use to 
communicate with consumers: ``product-claim'' advertisements, ``help-
seeking'' advertisements, and ``reminder'' advertisements. 
Advertisements that include both a product's name and its use, or that 
make any claims or representations about a prescription drug, are known 
as ``product-claim'' advertisements. These ads must include a ``fair 
balance'' of risks and benefits. In addition, they must provide all 
risk information included in the product's FDA-approved labeling or, 
for broadcast advertisements, provide convenient access to this 
information. In our regulations, the phrase ``adequate provision'' is 
used to identify the convenient access option. Unlike the ``product 
claim'' ads, ``help-seeking'' advertisements and ``reminder'' ads need 
not include any risk information.
    A ``help-seeking'' advertisement discusses a disease or condition 
and advises the audience to ``see your doctor'' for possible 
treatments. Because no drug product is mentioned or implied, this type 
of ad is not considered to be a drug ad and FDA does not regulate it.
    The second type of advertisement that does not need to include risk 
information is called a ``reminder'' advertisement. The regulations 
specifically exempt this type of ad from the risk disclosure 
requirements. Like ``help-seeking'' ads, the ``reminder'' ad is 
limited, although in a different way from ``help-seeking'' ads. 
``Reminder'' ads are allowed to disclose the name of the product and 
certain specific descriptive (e.g., dosage form) or cost information, 
but they are not allowed to give the product's indication or dosage 
recommendation, or to make any claims or representations about the 
product. The exemption for ``reminder'' ads was included in FDA's 
regulations for promotions directed toward health care professionals, 
who presumably knew both the name of a product and its use. 
``Reminder'' ads serve to remind health care professionals of a 
product's availability. They specifically are not allowed for products 
with serious warnings (called ``black box'' warnings) in their 
labeling.
Evolution of DTC Promotion
    Prior to the early 1980's, prescription products were not promoted 
directly to consumers and patients. Instead, product sponsors often 
produced materials that were given to health care professionals to pass 
on to patients if they thought this would be appropriate for particular 
patients. In the early 1980's, a few companies started advertising 
products directly to patient audiences (specifically, older people 
concerned about pneumonia and people taking prescription ibuprofen to 
treat arthritis pain). As a result of questions and concerns about 
promotion directed toward non-health care professionals, in 1983 FDA 
requested that sponsors suspend DTC ads to give the Agency time to 
study the issue.
    The industry complied with this request, and during the ensuing 
moratorium FDA conducted research and sponsored a series of public 
meetings. In 1984, the University of Illinois and Stanford Research 
Institute jointly sponsored a symposium to discuss consumer-directed 
prescription drug advertising from a broad research and policy 
perspective. On September 9, 1985, FDA withdrew the moratorium in a 
Federal Register (FR) Notice (50 FR 36677), which stated that the 
``current regulations governing prescription drug advertising provide 
sufficient safeguards to protect consumers.''
    During the early 1990's, product sponsors increasingly used 
consumer magazines to advertise their products. These ads typically 
included a promotional message together with the ``brief summary'' of 
adverse effects, similar to that used in physician directed ads. The 
``brief summary'' statement, which frequently appears in small print, 
is not very consumer friendly. In the 1990's, product sponsors also 
started using television advertisements in a limited fashion. 
Television advertisements were limited because FDA and industry did not 
believe that it was feasible to disseminate the product's approved 
labeling in connection with the ad. The extensive disclosure needed to 
fulfill this requirement essentially precluded the airing of such ads. 
For example, one way to satisfy this requirement would be to scroll the 
``brief summary,'' which would take a minute or more even at a barely 
readable scrolling rate. The industry, therefore, resorted to 
television ads that did not require risk disclosure.
    By the mid-1990's, product sponsors started placing ``reminder'' 
ads on television. Because these ads only mentioned the name of the 
drug, however, they were extremely confusing to consumers, who, unlike 
health care professionals, were not knowledgeable about the name and 
the use for these products.
    In response to increasing consumer demand for information, FDA 
began to consider whether broadcast advertisements could be constructed 
to ensure access to product labeling, the only alternative to including 
all of an advertised product's risk information. FDA considered 
suggestions about providing access to multiple sources of product 
labeling as a means of satisfying the requirement that consumers have 
convenient access to FDA-approved labeling when manufacturers broadcast 
a ``product-claim'' advertisement.
    In August 1997, FDA issued a draft guidance entitled: ``Guidance 
for Industry: Consumer-Directed Broadcast Advertisements'' that 
clarified the Agency's interpretation of the existing regulations. The 
Guidance described an approach for ensuring that audiences exposed to 
prescription drug advertisements on television and radio have 
convenient access to the advertised product's approved labeling. The 
proposed mechanism consisted of reference in the broadcast 
advertisement to four sources of labeling information: a toll-free 
telephone number, a website address, a concurrently running print 
advertisement, and health care professionals. Following a comment 
period, and detailed review and consideration of the comments, FDA made 
only minor changes to the draft guidance, and issued it in final form 
in August 1999 (64 FR 43197, also found at www.fda.gov/cder/guidance/
1804fnl.htm). In announcing the final guidance, FDA advised that the 
Agency intended to evaluate the impact of the guidance, and of DTC 
promotion in general, on the public health, within two years of 
finalizing the guidance.
Stakeholder Perspectives
    A number of stakeholder groups have expressed strong interest in 
DTC promotion. Those that are positive about DTC promotion assert that 
this practice will:

   Improve consumers' knowledge of drugs and drug availability.

   Encourage consumers to talk with their health care providers 
        about their health problems.

   Allow consumers and patients to have a greater role in 
        decisions about their own health care that they say they 
        desire.

   Improve communication between patients and their physicians.

   Improve appropriate prescribing by allowing physicians to 
        get more information about their patients from their patients.

   Lower the cost of prescription drugs.

    Not all stakeholders are positive about DTC promotion. Opponents 
assert that DTC advertising will:

   Confuse consumers about drugs.

   Make it appear that prescription drugs are safer than they 
        are.

   Interfere with the patient-physician relationship because 
        patients will insist that their physicians prescribe the 
        advertised products.

   Increase inappropriate prescribing.

   Raise the cost of prescription drugs.

    Finally, there is a group of stakeholders with a less polarized 
view of DTC promotion. They believe that such promotion has both 
benefits and risks, but that it should be strictly regulated, and that, 
preferably, all DTC materials should be ``pre-approved'' by FDA. They 
often assert that there are potential public health benefits associated 
with patients visiting health care providers about untreated diseases 
or conditions, particularly those that appear to be under treated in 
the population and that are responsible for long-term harm (for 
example, high cholesterol, high blood pressure, diabetes and 
osteoporosis).
Current Situation
    FDA recognizes that drug promotion raises certain issues for health 
care professionals and different issues for consumers, in light of 
differences in medical and pharmaceutical expertise. For this reason, 
FDA has monitored DTC promotion, and especially broadcast promotion, 
very closely to help ensure that adequate contextual and risk 
information, presented in understandable language, is included to 
fulfill the requirement for fair balance and to help the consumer 
accurately assess promotional claims and presentations.
    Product sponsors of prescription advertisements are required to 
submit their promotional materials to FDA around the time these 
materials are initially put into public use. FDA receives approximately 
32,000 of these submissions per year, for all types of promotion, 
including promotion to health care professionals. Product sponsors also 
can submit draft materials to FDA for review and comment prior to using 
them. DDMAC has made it a high priority to provide comments to product 
sponsors on voluntarily submitted draft broadcast advertisements within 
a reasonable time. In fact, although it is not required, a majority of 
product sponsors voluntarily submit their broadcast advertisements to 
DDMAC for prior review and comment at some point as advertising 
materials are being produced. Product sponsors may ask for review and 
comment at the very initial stages of production (by supplying the 
words they intend to use along with rough drawings of their proposed 
graphics), or at the later stages of final videotape production. DDMAC 
only gives final comments on final videotapes because inappropriate 
presentations can turn an otherwise acceptable advertisement into an 
unacceptable one (for example, by pacing the risk disclosure too 
rapidly, including multiple distracting visual images during the risk 
disclosure, or including images that overstate the efficacy of the 
product beyond what is supported by substantial clinical evidence).
    Since January 1997, sponsors of about 65 prescription drugs have 
aired ``product-claim'' advertisements on television or radio. A small 
number of prescription biological products also have been advertised. 
Nine products fall into the allergy category (nasal and ocular anti-
histamines, and nasally administered corticosteroids), while another 
eight products treat skin or hair-related problems (acne, cold sores, 
rosacea, baldness, unwanted facial hair, nail fungus). More 
importantly, ten products are designed to treat diseases that are 
believed to be under treated, including high cholesterol and heart 
disease, and mental health problems like depression. Five products to 
treat or prevent osteoporosis or menopausal symptoms have been 
advertised. Other advertised products are approved to treat such 
conditions or diseases as asthma, Alzheimer's Disease, arthritis, 
chronic obstructive pulmonary disease, diabetes, insomnia, migraine, 
obesity, overactive bladder, serious heartburn, smoking cessation, and 
sexually transmitted diseases. Most of these are serious problems where 
patients are in the best position to recognize symptoms.
    It is important to note that DDMAC does not know how many different 
advertisements have aired in broadcast media for these 65 drugs. There 
have been multiple campaigns for a number of the products, including 
the allergy and high cholesterol products. In addition, many campaigns 
include different length ``product-claim'' commercials, as well as 
multiple short ``reminder'' commercials. DDMAC does not track the 
number of different broadcast advertisements that are submitted. 
Further, because ``help-seeking'' advertisements, if done properly, are 
not considered to be drug ads, most product sponsors do not send them 
to DDMAC under the submission requirements for prescription drug 
promotional materials. Therefore, we have no measure of how many of 
these have been in the public domain.
Enforcement Related to DTC Promotion
    Since 1997 FDA has issued:

   30 ``untitled'' (or ``Notice of Violation'') letters on 
        ``product-claim'' broadcast advertisements. Such letters 
        request that the violative promotion be stopped immediately. 
        Product sponsors virtually always comply immediately with this 
        request.

   3 ``warning letters'' on broadcast advertisements. This is a 
        higher-level enforcement action, and requests that a remedial 
        campaign be conducted by the company to correct the impressions 
        left by the ad.

   12 ``untitled'' letters on purported ``reminder'' broadcast 
        advertisements.

   3 ``untitled'' letters on purported ``help-seeking'' 
        broadcast advertisements.

    Most of the violations cited were because the ad overstated or 
guaranteed the product's efficacy, expanded the indication or the 
patient population approved for treatment, or minimized the risks of 
the product, through either inadequate presentation or omission of 
information.
    Since January 1997, the Agency has issued:

   44 ``untitled'' letters that addressed DTC print 
        advertisements or other promotional materials, including 
        purported ``reminder'' and ``help-seeking'' materials.

   1 ``warning letter'' for a specific DTC print advertisement, 
        and 1 ``warning letter'' that included a DTC print 
        advertisement as part of an overall misleading campaign.

    Generally, the violations involving print ads making ``product-
claim'' ads were similar to those cited above. Nearly all ``reminder'' 
ad violations were the result of representations about the product that 
triggered the need for full disclosure of benefits and risks. ``Help-
seeking'' ad violations were due to a particular product being implied 
in the message. As noted above, however, FDA cannot determine how many 
specific advertisements serve as the denominator for assessing how many 
have resulted in enforcement action compared with those that have not.
Research on DTC Promotion
    A number of groups have been conducting research on DTC promotion. 
Much publicly available research consists of surveys utilizing samples 
of consumers or patients to examine attitudes about DTC promotion and 
self-reported behaviors related to DTC promotion in the context of 
patient-physician visits and use of prescription drugs. The groups 
sponsoring this research include: Prevention magazine, TIME Inc., the 
National Consumers League, and American Association of Retired Persons. 
Partial results of a few surveys of physicians have been made publicly 
available. FDA remains concerned, however, about the representativeness 
of the physician survey sample.
    In 1999, FDA sponsored a telephone survey that focused on a 
national probability sample of patients who had seen a physician for a 
problem of their own within the three months prior to the survey. The 
results of this patient survey suggested that patients are seeking 
additional information as a result of DTC promotions that they have 
seen. This information was sought primarily from health care 
professionals, and secondarily from reference texts and family. 
Generally, between 10 and 20 percent of respondents said that they 
sought additional information from the sources referenced in broadcast 
advertisements--toll-free telephone numbers, websites, and print 
advertisements. A major result, and one that is consistent with results 
of Prevention's national surveys, is that a significant minority of 
respondents said that a DTC ad has caused them to ask a doctor about a 
medical condition or illness they had not previously discussed. This 
could represent a significant and positive public health benefit, 
particularly if these patients are talking about undiagnosed heart 
disease or other serious disorders.
    The survey results also suggest that DTC advertisements are not 
significantly increasing visits to a physician's office. For the most 
part, patients said that they had recently visited their doctors for 
the traditional reasons: because it was time for a check-up (53 
percent), because they were feeling ill (42 percent), or because they 
had a sudden symptom or illness (41 percent). Only two percent said 
that they had visited their doctor because of something they had seen 
or heard. Of those patients who had a conversation with their doctor 
about a prescription drug: 81 percent said that their doctor had 
welcomed the question, 79 percent said that their doctor discussed the 
drug with them, and 71 percent said that their doctor had reacted as 
though the conversation was an ordinary part of the visit. Only four 
percent said that their doctor seemed upset or angry when the patient 
asked about a prescription drug. According to the patients, therefore, 
physicians seem to be reacting well to questions about prescription 
drugs. Finally, only 50 percent of these patients said that their 
doctor gave them the medication discussed. Thirty-two percent said that 
the doctor recommended a different drug. Twenty-nine percent of the 
respondents indicated that behavioral or lifestyle changes were 
suggested by the doctor. It therefore appears, from FDA's patient 
survey, that physicians are comfortable denying prescriptions when the 
prescription would not be right for the patient.
    A small number of patients who were denied prescriptions said that 
their doctors told them why. Reasons included: the drug was not right 
for the patient; the doctor wanted the patient to take a different 
drug; the drug had side effects of which the patient was unaware; the 
patient did not have the condition treated by the drug; the patient did 
not need a prescription drug; the patient could use a non-prescription 
drug; and there was a less expensive drug available.
    Patients also were asked about their attitudes concerning 
prescription drug advertisements. Their answers indicated somewhat 
mixed feelings. Eighty-six percent agreed that these ads help make them 
aware of new drugs, 70 percent agreed that the ads give enough 
information to help the patient decide if they should discuss the 
product with a doctor, and 62 percent agreed that ads help the patients 
have better discussions with their doctors about their health. Only 24 
percent agreed that DTC ads make it seem like a doctor is not needed to 
decide whether a drug is right for someone. In contrast, 58 percent 
agreed that DTC ads make drugs seem better than they really are, 59 
percent agreed that ads do not give enough information about the 
advertised product's risks and negative effects, and 49 percent agreed 
that these ads do not give enough information about the benefits and 
positive effects of the advertised product.
Next Steps
    In issuing both the draft and the final broadcast advertisement 
guidance, FDA stated its intent to assess the impact of the guidance, 
and of DTC promotion in general, on the public health. FDA is also 
aware that privately funded research is being planned to examine the 
effects of DTC promotion. At present, FDA is not aware of any evidence 
that the risks of DTC promotion outweigh its benefits. FDA intends to 
carefully examine all available data, to determine whether the public 
health is adequately protected.
    This concludes my prepared remarks. I will be glad to answer any 
questions you may have on this topic.

    Senator Dorgan. Dr. Ostrove, thank you very much.
    You indicated near the start of your testimony that the FDA 
is not aware of any information that would suggest 
inappropriate prescribing as a result of direct-to-consumer 
advertising. The fact that you are not aware of information, 
does that suggest no information exists or no studies have been 
done, or is it just that you are not aware of them?
    Dr. Ostrove. Well, it does not suggest that no information 
exists. Certainly there might be some. We have tried to make it 
clear to the public and we have asked in many circumstances and 
in many venues for any information that would be useful to our 
assessment of the impact of DTC promotion. People have come 
forward. There have been studies that have been done looking at 
patients. There have been some studies of physicians. The 
representativeness of the samples is a little questionable. We 
recently participated in a design conference that HHS sponsored 
to try to encourage research into this area.
    So it is not that it necessarily is not out there, but it 
certainly has not been brought to our awareness.
    Senator Dorgan. One of the next witnesses, Nancy Chockley, 
President of the National Institute for Health Care Management 
Research and Educational Foundation, says in her testimony: 
``In an analysis we will be releasing soon, we have found that 
the 50 drugs most heavily advertised to consumers in 2000 had 
aggregate sales increases last year of 32 percent compared to 
14 percent for all other drugs.''
    Can you give me an analysis of that? That follows a comment 
she makes in her testimony: ``Direct-to-consumer advertising 
appears to be inducing significant new demand for prescription 
drugs and thus contributing to the recent sharp rise in 
pharmaceutical spending.'' Do you agree or disagree with that 
conclusion?
    Dr. Ostrove. I think it is extremely difficult to tease out 
the impact of direct-to-consumer advertising, given the other 
factors that are involved. In addition to DTC advertising, the 
manufacturers are out there advertising to health care 
professionals, and in many cases when they have a DTC campaign, 
and if they are smart, the first thing that they do is they let 
the health care professional know about that campaign, because 
they do not want the prescriber to be blind-sided.
    So at the same time you are having a campaign to consumers, 
which by the way is also seen by health care professionals, 
there is also a separate campaign that is going to the health 
care professionals. In addition to that, of course the 
manufacturers put their money where they think the market is. 
So they are going to spend more where they think that there is 
a market for something.
    So this is one of the issues that was raised in the design 
conference, how do you tease out the impact of DTC without 
doing a controlled study, which we are not aware that anyone 
has done and would be a fairly significant undertaking.
    The other piece of that is that even if there is an 
influence of DTC on utilization, our concern is, our question 
is, is that appropriate? Are people going in and appropriately 
talking to their doctors about conditions that are important 
for them and that in fact they have, and are they getting the 
appropriate treatment, or is it increasing inappropriate 
treatment? That is what we have no data on. I do not think that 
the data that are going to be a part of this report are likely 
to address that.
    Senator Dorgan. That is an important question, I think, and 
if we have no data on it should we aspire to get data and, if 
so, how? Does the FDA propose that we aspire to get such data?
    Dr. Ostrove. Well, the FDA has in fact requested a number 
of times to the industry and to other interested stakeholders 
that research be done to look at this. The agency itself, of 
course, has--the agency itself is doing what research it feels 
it can do. We recently in 1999, we did a survey of patients, 
people who had seen their doctors in the last 3 months, and we 
are hoping to do another one. We are also hoping to do a survey 
of physicians and looking at their experiences with DTC and how 
it has influenced their practices.
    So we are doing what we can in this area, and we have 
encouraged the private sector to do the same. We have not seen 
anything as yet. We are aware that at least some manufacturers 
are interested in doing this, but we really do not know where 
that is.
    Senator Dorgan. But I am wondering whether it should be the 
manufacturers that would do such a study. They obviously have 
an interest in the outcome of the study. Should there not be 
some independent party doing a study? Should the FDA be 
recommending some mechanism in government to have a study 
completed?
    Dr. Ostrove. Well, certainly HHS is interested in this 
whole area, in the cost issues as well as in FDA concerns, 
which is the public health issues and the protection of the 
public health. It is difficult for me to answer whether this 
should be done. Certainly I think on a theoretical basis, yes, 
it should be done. Then it is a matter of who is going to do 
it, how is it going to get done.
    As I said, one of the reasons for kind of hoping that the 
manufacturers would do it is the relative--the resources that 
they have.
    Senator Dorgan. But you would agree that manufacturers have 
a vested interest in the outcome?
    Dr. Ostrove. Yes.
    Senator Dorgan. It seems to me not logical that you would 
have someone do a study who has an interest in the outcome of 
the study.
    Dr. Ostrove. It would be best for an uninterested party, a 
party that does not have a vested interest, to do this.
    Senator Dorgan. Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman.
    Let me start, if I could, Dr. Ostrove. Chris Castle, who I 
met when I was teaching gerontology in Oregon, recently said--
she is now chairman of geriatrics at Mount Sinai in New York. 
She said recently: ``Direct to consumer advertising has made a 
huge impact on sales of medications which are not always the 
best medications for people to take.''
    Would you by and large agree with that statement of Dr. 
Castle's?
    Dr. Ostrove. That is a very general statement, a huge 
impact on medications that are not always the best. I am not 
sure exactly what data she is basing that statement on, so it 
would be difficult.
    Senator Wyden. In your opinion, are there any ramifications 
for the use of generic drugs in this whole focus on direct-to-
consumer advertising? As we know, in many instances, not always 
but in many instances, the generic drug is cheaper. It sure 
looks like the bulk of the advertising direct-to-consumer is of 
the more expensive brand names. I would be interested in your 
knowing whether you think there are any ramifications in this 
trend for the use of generics?
    Dr. Ostrove. I think certainly there are potential 
ramifications for the use of generics. The innovator 
manufacturers clearly have greater resources, monetary 
resources to advertise their products than the generic 
manufacturers do.
    What is kind of interesting is, at least from some of the 
data that we have from our study, is that when patients went in 
to see a doctor and talked to the doctor about a particular 
prescription product, in only 50 percent of the cases did they 
actually get the product that they had discussed. In a number 
of cases what ended up happening is that they got another 
product.
    My suspicion is that--and we do not have the actual details 
of this, but in many of those cases it may have been case where 
the gatekeeper prescriber said: You know, I am glad you came in 
to talk to me about this condition; you do have this condition, 
but you do not need that drug, it is more expensive, or it is 
not what you need; here is one that has been out on the market 
a long time, it has got a better safety profile; why do you not 
take it.
    So certainly in some cases that is what I believe happened. 
We also know that in that certain percentage of the cases the 
doctor told the patient that what they needed was behavioral 
and lifestyle changes.
    So the gatekeeper--the physician or the prescriber, excuse 
me, is acting as a gatekeeper in these particular situations. 
So it is hard again to kind of tease out how much of that is 
going to be influencing the use of generics. Hopefully, 
physicians will be using this, prescribers will be using this 
opportunity as kind of a learning opportunity, a point to 
communicate with the patient.
    Senator Wyden. This is an area I am going to follow up with 
you and others in government, because I think Senator Dorgan is 
absolutely right. What we hear about from our constituents, 
older people and others, is the affordability question. I am 
very concerned about the ramifications of direct-to-consumer 
advertising for access to generics. If you just look at the ads 
that Senator Dorgan held up, these are blockbuster brand name 
drugs, they are exciting products. You do not seem to see the 
same kind of focus on marketing this way on generics. I think 
we need to do follow-up work in this area.
    Dr. Ostrove. If I can add one more thing, we have also 
looked at the products that are being advertised most heavily 
to consumers and in many cases for those products they are 
breakthroughs and there are no generics. I am not saying that 
is true in all the cases, but in many of the cases there are 
not generics available.
    Senator Wyden. It is a fair comment, and one of the things 
I think we ought to look at is the evolution of how this drug 
comes into market and what happens when it goes off to a 
patent.
    Dr. Ostrove. Absolutely.
    Senator Wyden. Let me ask you just a couple of other 
questions. I appreciate Senator Dorgan's indulgence. A number 
of physician groups across the country have been urging 
resolutions through their state societies to in effect block 
this whole trend. What their argument largely appears to be is 
that they feel the this trend in advertising is interfering 
with the doctor-patient relationship, that the pharmaceutical 
industry in some way is intruding into the doctor-patient 
relationship.
    Do you think there is any validity to that argument?
    Dr. Ostrove. We have heard a lot of anecdotal reports from 
physicians that they feel that DTC advertising is interfering 
with the doctor-patient relationship. We have also heard 
anecdotal reports from other physicians that it is improving 
the relationship they have with their patients, because the 
patients are coming in, they are more informed, they are more 
willing to take their medication, in other words their 
adherence is better.
    Our data--in our survey we asked patients how their doctor 
reacted to the discussion of the prescription drug when they 
had these discussions. The majority of them, in the high 70's, 
low 80's, said that the doctor was very good about it. Very few 
of them, only 4 percent I think of the patients, said that the 
doctor seemed to be disturbed by their interaction.
    So it would appear that the physicians are doing a pretty 
good job on the whole of dealing with patients. The patients do 
not perceive any problems. But this is an area that we feel 
needs more research and it is one of the reasons why we would 
like to do a survey of a representative sample of physicians, 
to get it from their perspective.
    Senator Wyden. That would be helpful as well.
    The last question I wanted to ask: Do you see any 
relationship between direct-to-consumer advertising and this 
trend toward coupons and guarantee programs? The concern is I 
think you all have had discussed with you is that they use 
these coupon programs and these discount programs to sort of 
bring people in, but they bring them in on the most expensive 
drugs again, and that this has been tied in some way to the 
direct-to-consumer advertising trend.
    What, if anything, has the agency picked up on that?
    Dr. Ostrove. Well, it is a marketing technique.
    Senator Wyden. Are you troubled by this? Are you concerned 
about what I have described?
    Dr. Ostrove. We have looked at the whole area and we are 
troubled by some--more troubled by some things than others.
    Senator Wyden. Tell me what part of this troubles you, 
then?
    Dr. Ostrove. Anything that gets into the cost issue, where 
apparently a product is being touted for its cost benefits as 
opposed to its clinical benefits, is troubling. But in terms of 
our authority, these coupons, these offers, unless they are 
false or misleading, lacking in fair balance in some way, or 
involving an omission of material fact, there is not a good 
argument for us to object to them on the basis of the 
regulations.
    Senator Wyden. I understand that. My time is up, but I 
think it goes again to the point that I was making, that if 
they are accurate so be it, but I am troubled by the fact that 
you give people, you give senior citizens discounts on 
something, so in effect you get them tied, you get them bonded 
to a certain kind of pharmaceutical at a very expensive price. 
Then the coupon program is over and they have developed an 
affinity for that product and it is sort of cemented by direct-
to-consumer advertising.
    I just want us to start looking at what is really going on 
in the marketplace, and that is why I think what Senator Dorgan 
is doing is important and I appreciate it.
    Senator Dorgan. Thank you, Senator Wyden.
    Dr. Ostrove. One other piece with regard to that. I hope I 
am not interrupting.
    Senator Dorgan. That is fine.
    Dr. Ostrove. But there is a value or at least there appears 
to be some data that indicate that direct-to-consumer 
advertising actually makes it more likely that people will take 
their medications, will continue on their regimen, will fill 
their prescriptions. Given that noncompliance is such a big 
problem in taking medications, there is that other side of it, 
that if people in fact do become committed to their medications 
perhaps they will use them more appropriately and not stop 
taking them, or at least go to their doctors if they do.
    Senator Dorgan. Will you submit that information for the 
record that you just cited? Is there a source for that?
    Dr. Ostrove. A survey that Prevention magazine has done. I 
believe that they asked those kinds of questions about 
compliance in their 1998 and 1999 surveys.
    Senator Dorgan. Dr. Ostrove, how large is the Division of 
Drug Marketing, Advertising, and Communication?
    Dr. Ostrove. We have 32.
    Senator Dorgan. You seem to, based on the questions I have 
asked and Senator Wyden has asked, seem to come down on the 
side of suggesting this is really a good thing. You have used a 
little cautionary language, but by and large as I interpret 
what you are saying, on balance you think direct-to-consumer 
advertising is probably fine, probably helps. Is that a good 
way to summarize what you just told us?
    Dr. Ostrove. Well, I am not sure--it is the double-edged 
sword metaphor. I guess we believe that there are good aspects 
to it, but we believe that there are potentially not so good 
aspects to it as well. So we are hoping for a balance.
    Senator Dorgan. When I started today I held up this, which 
is a Washington Post full page ad, ``What is the better way to 
lower my blood sugar,'' and then it provides a medicine, name 
of a medicine, and a free 30-day supply coupon. If you read 
this in all the smaller type, you understand that you have got 
to get a prescription from a doctor.
    But someone who is not a careful reader would just see, I 
have got a high blood sugar level, I get a free 30-day supply. 
Is this the sort of thing you look at in terms of advertising? 
You have how many people looking at that at your agency?
    Dr. Ostrove. We have 14 reviewers who do primary reviews 
and one of them is devoted full-time to direct-to-consumer 
advertising. Yes, we look at the overall presentation.
    Senator Dorgan. 14. The consumer advertising has increased 
very substantially, as you know, in recent years, the rampup 
since 1997. Have the resources that you employ to respond to 
these increased at all?
    Dr. Ostrove. Well, the person who is devoted to direct-to-
consumer is a relatively new--yes, we have kind of moved 
resources around. We prioritize our workload as a function of 
what we think is important out in the marketplace, so we 
respond to changes in the marketplace.
    Senator Dorgan. When you said a person, there is more than 
just one person?
    Dr. Ostrove. Oh, absolutely. All the primary reviewers--the 
primary reviewers work on different classes of drugs, and 
depending on the class they will work more or less on DTC 
advertisement. Some classes have very little DTC, other classes 
have a lot.
    Senator Dorgan. My understanding is in 1998 the FDA issued 
158 warnings and untitled letters regarding promotional 
materials, drug promotional materials, both for direct-to-
consumer ads and detailing. In 1999 it went from 158 down to 
107, in 2000 it went down to 79. What is this decrease 
attributed to? Is there less enforcement or is there better 
compliance?
    Dr. Ostrove. I think there are probably a lot of factors 
that go into that. We are in the process of looking at how best 
to structure things so that we can use our resources most 
effectively. I am not really sure how to attribute that 
decrease. We have had some turnover. That may be part of it. We 
are spending a lot of time on kind of advisory activities, and 
the hope of that is to get the information, to get the 
promotional materials, before they reach the public. So again 
on a voluntary basis, manufacturers can submit their 
promotional materials and we give advice and comment.
    So some of the change may be due to that. Some of it may be 
due to more people working on educational----
    Senator Dorgan. Would you submit for the record an analysis 
of that after you have had a chance to visit with your agency?
    Dr. Ostrove. Happy to do that.
    Senator Dorgan. Again, one would expect as direct-to-
consumer advertising dramatically increases, and it really 
has--I think all of us understand that--one would expect FDA 
warnings not to drop by 50 percent, but would expect them to 
probably keep pace with the increase in promotional 
advertising, because there is a lot of money at stake. This is 
a large industry with a very substantial bankroll that is 
advertising very, very aggressively.
    What I see is a decrease by 50 percent of the warnings and 
untitled letters that you are sending out. Somehow that seems 
to suggest to me a less aggressive enforcement attitude with 
respect to this.
    Dr. Ostrove. Well, actually let me clarify that, please. 
You were talking about all of the untitled and warning letters, 
and that deals with--actually, most of those are toward 
professionally directed materials. I do not have the numbers 
with me, but I can get the numbers back to you that would 
demonstrate that in fact our enforcement of direct-to-consumer 
promotion has not decreased in the last 5 years.
    Senator Dorgan. We will just ask you to submit that for the 
record.
    Dr. Ostrove. I will definitely do that. *
---------------------------------------------------------------------------
    * The information referred to was not available at the time this 
hearing went to press.
---------------------------------------------------------------------------
    Senator Dorgan. Dr. Ostrove, thank you very much for being 
with us. We appreciate your testimony.
    We would like to ask the next panel to come forward: Dr. 
Stephen Findley, Director of Research and Policy, the National 
Institute for Health Care Management; Dr. Sidney Wolfe, 
Director, Public Citizen, Health Research Group; Dr. Gregory 
Glover, attorney-physician, representing the Pharmaceutical 
Research and Manufacturers of America, PhRMA; Dr. John Calfee, 
a Resident Scholar at the American Enterprise Institute.
    We welcome all four of you. We have asked that you submit 
your statements for the record and ask that you summarize your 
statements in 5 minutes. Let me begin--we have Nancy Chockley 
here in place of Stephen Findley. Let me begin with Ms. 
Chockley, President of the National Institute for Health Care 
Management. Would you proceed.

STATEMENT OF NANCY CHOCKLEY, PRESIDENT, NATIONAL INSTITUTE FOR 
               HEALTH CARE MANAGEMENT FOUNDATION

    Ms. Chockley. Yes. Good afternoon, Mr. Chairman and 
Senator. Thank you very much for this opportunity to testify. I 
am Nancy Chockley, President of the National Institute for 
Health Care Management Foundation. We are a research and policy 
group based here in Washington. We get our funding from health 
plans, from the government, and from private foundations. We 
have been doing a lot of work looking at the pharmaceutical 
industry and what is driving expenditure growth. I would like 
to make just a couple of points, four points really, here today 
on what we have been finding.
    One is that, as you already stated, direct-to-consumer 
advertising appears to be inducing new demand for prescription 
drugs and thus contributing to the recent sharp rise in 
pharmaceutical spending. Specifically, the data show that the 
drugs driving the growth in utilization and sales are also the 
drugs that are most heavily advertised. Simply put, we have 
found what Madison Avenue has known all along: advertising 
works.
    In an analysis, as you mentioned before, that we will be 
releasing probably in the next month, we found that the 50 
drugs most heavily advertised to consumers in 2000 had an 
aggregate sales increase last year of 32 percent compared to 
about 14 percent for all other drugs, which by the way number 
over 9,800 drugs. So we are looking at 50 versus about 9,800 
drugs.
    A large portion of the increase in sales for the 50 most 
heavily advertised drugs comes from a sharp increase in the 
number of prescriptions filled for them. As the chart over here 
illustrates, the combined number of prescriptions for these 50 
drugs was up almost 25 percent last year. You compare that to 
the other 9,800 drugs, they were up less than 2 percent. So it 
does appear that it is having an impact.
    I would like to note, though, that these numbers are 
preliminary and we are still working on them. But let me give 
you a specific example with Vioxx. We found that the growth in 
sales for the new arthritis drug Vioxx contributed more than 
any other single drug to the 19 percent increase in retail 
prescription drug spending in 2000. Sales of Vioxx shot up from 
$330 million in 1999 to $1.5 billion. So that is an over a 
billion dollar increase in sales in just 1 year.
    Perhaps not surprisingly, Vioxx was the most heavily 
advertised prescription drug in the Nation in 2000. Its maker, 
Merck, spent over $160 million promoting the drug to consumers.
    With the success of direct-to-consumer advertising and the 
new avenues open to reaching the consumers, we would predict 
that the pharmaceutical industry will be spending more to reach 
out and market directly to consumers. This expansion will 
follow the trend that you have alluded to. Over the last 3 
years 1998 to 2000, spending on direct-to-consumer advertising 
has almost doubled.
    It is important to note, though, that the $2.5 billion 
spent on direct-to-consumer advertising really is only a small 
part of what the industry spends in total in promoting their 
drugs. They spend about $15.7 billion in total, $2.5 billion on 
DTC ads.
    As was referred to earlier by Nancy, we do not know how 
direct-to-consumer ads are affecting the physician-patient 
relationship or how they are changing health outcomes for 
patients. We need more studies on this and some of the work 
they are doing--there was a meeting with the Department of 
Health and Human Services on this. But we really need more 
information. Prevention magazine is really kind of out there in 
front and that is a little scary when you are talking about 
such a big industry.
    But they have found some interesting things, including that 
when a consumer comes in and asks for a specific drug 70 
percent of the time they walk out with that drug. So it clearly 
is having an impact.
    While some contend that direct-to-consumer ads are a 
valuable source of information for consumers, we must recognize 
that the information in such ads is not packaged for the 
benefit of the public's health, it is really meant to sell a 
specific drug. In this unique consumer market, direct-to-
consumer ads prompt consumer behavior without providing 
substantive and complete information about the advertised 
product, treatment alternatives, or the disease.
    In conclusion, I would like to say that for consumers to 
make really informed decisions they need better, more balanced 
information on prescription drugs and we should facilitate that 
in two ways. One is I think we should raise the standards for 
direct-to-consumer ads and what is in them. I guess we will be 
hearing from some other groups on that point.
    But also, I think that we need to organize the different 
stakeholders in this industry with government leadership to try 
to provide an independent source of information. What we are 
spending on prescription drugs is going up, as you said, 19 
percent a year. You are debating about adding Medicare 
prescription drug benefit. It really behooves us all to come up 
with an independent source of information so we can actually 
make some good comparisons between treatment options.
    [The prepared statement of Ms. Chockley follows:]

Prepared Statement of Nancy Chockley, President, National Institute for 
                   Health Care Management Foundation
    Good afternoon, Mr. Chairman and Members of the Subcommittee. Thank 
you for the opportunity to testify today on this important issue.
    I am Nancy Chockley, president of the National Institute for Health 
Care Management Foundation. The NIHCM Foundation is a non-partisan, 
non-profit group. We conduct research on health care policy issues and 
manage health projects with funding from health plans, the government 
and private foundations. One of our research priorities has been and 
continues to be analysis of the pharmaceutical marketplace. Two of our 
recent studies are included in the supporting materials, and the others 
are available on our web site.
    I will focus my remarks today on four key points:

      L1. Direct-to-consumer advertising appears to be inducing 
significant new demand for prescription drugs, and thus contributing to 
the recent sharp rise in pharmaceutical spending. Specifically, our 
data show that the drugs driving the growth in utilization and sales 
are also the drugs that are being most heavily advertised to the 
public. Simply put: DTC advertising works.

      LIn an analysis we will be releasing soon, we have found that the 
50 drugs most heavily advertised to consumers in 2000 had an aggregate 
sales increase last year of 32%, compared to 14% for all other drugs 
(which number about 9,850).

      LAs the chart behind me illustrates, most of the increase in 
sales for the 50 most heavily advertised drugs came from a sharp 
increase in the number of prescriptions filled for them. Combined, the 
number of prescriptions for these 50 drugs was up almost 25% from 1999 
to 2000. In contrast, the number of prescriptions for all other 
prescription drugs increased less than 2%. I would like to note these 
numbers are preliminary.

      LTo give you an example, we found that growth in the sales of the 
new arthritis drug Vioxx contributed more than any other single drug to 
the 19% increase in retail prescription drug spending in 2000. Sales of 
Vioxx shot up from $330 million in 1999 to $1.5 billion in 2000. 
Perhaps not suprisingly, Vioxx was the most heavily advertised 
prescription drug in the nation in 2000. Its maker, Merck, spent $160.8 
million promoting the drug to consumers.

      L2. The success of DTC advertising, combined with computer 
technology which is opening up new ways to reach consumers directly, 
lead us to predict that drug companies will continue to expand their 
efforts to market their products directly to consumers. This expansion 
will follow the trend seen over the last three years: from 1998 to 
2000, spending on direct-to-consumer advertising has almost doubled. In 
2000, the pharmaceutical industry spent $2.5 billion on DTC ads. It is 
important to note this accounts for only a portion of the $15.7 billion 
total expenditure on promotional spending for prescription drugs.

      L3. We don't know how DTC ads are affecting the physician-patient 
relationship or how they are changing health outcomes for patients. We 
need more studies to better understand the role marketing is playing. 
The Department of Health and Human Services held an important 
conference on this issue in May, and the FDA is also currently studying 
this question. We strongly encourage more federal funding of research 
that helps explain the impact of marketing on health and health care.

      L4. While some contend that DTC ads are a valuable source of 
information for consumers, we must recognize that the information in 
such ads is not packaged for the benefit of the public's health. It is 
meant to sell prescription drugs. In this unique consumer market, DTC 
ads prompt consumer behavior without providing substantive and complete 
information about the advertised product, treatment alternatives, or 
the disease.

    For consumer decisions to be truly informed, consumers must be 
provided with better, more balanced information on their prescription 
drugs. We should facilitate this by: one, raising the standards for the 
content of DTC ads; and two, organizing collaboration among key 
stakeholders in the health care industry and the government to develop 
objective sources of information that compare treatment options. 
Currently, consumers and physicians rely on the pharmaceutical 
companies as their primary source of information on pharmaceutical 
products. With prescription drug expenditures increasing by almost 19% 
a year and Congress looking at adding a prescription drug benefit for 
Medicare beneficiaries, the timing is right to address the scarcity of 
unbiased pharmaceutical information that exists. It is essential for 
physicians and consumers to have access to a source of information 
which may help them to discern and compare the benefits and costs of 
pharmaceutical products. The government could play a key role in 
facilitating such a vital information source.
Elaborating on the preceding points
    In September 2000, we released our first research brief on DTC 
prescription drug ads. In May 2001, we released a study on 
pharmaceutical spending in the retail marketplace in the year 2000. 
Although we will not be releasing our next study of DTC ads until 
September, we have included in this testimony data on ad spending in 
2000 which will be published in that study.
    Pharmaceutical companies spent $2.5 billion on all forms of DTC 
prescription drug ads in 2000; 85% of that total was spent on the 50 
most heavily promoted drugs.
    Like the Vioxx example given earlier, we found that growth in the 
sales of the heavily-promoted antiulcer drug Prilosec was responsible 
for a substantial portion of the rise in overall pharmaceutical 
spending in 2000. Retail sales of the drug rose from $3.6 billion in 
1999 to $4.1 billion in 2000. It's now the best selling drug in the 
country. Prilosec's maker, AstraZeneca, spent $107.7 million promoting 
the drug to consumers in 2000. It was the second most heavily promoted 
drug.
    It is important to note that DTC ads are only one factor among many 
factors that drive the sales growth of a product. While it is feasible 
that DTC ads are playing a comparatively small role relative to these 
other factors, our data and recent surveys indicate otherwise.
    Recent studies by the FDA and Prevention magazine have found, for 
example, that consumers are quite receptive to the ads. They are not 
only aware of them; they appear to be acting on them. In a recent 
survey by Prevention magazine, conducted in June 2000, 32% of 
respondents who had seen or heard a drug ad--and 90% had--talked to 
their doctor about an advertised medicine or the disease it targets. Of 
this group, one in four asked their doctors for a specific medicine 
they had seen advertised. And 70% of those who made such a request 
walked out of the office with a prescription for that specific drug.
    Let me translate those percentages into numbers of people. If 150 
million adults saw the ads, 48 million will have talked to their doctor 
as a result, 12 million will have asked for a specific drug, and 8.4 
million will have gotten it that same day.
    This brings me to another central point I want to make today: we 
don't yet know whether DTC advertising is, on balance, beneficial or 
detrimental.
    Are the ads leading to the inappropriate use of some drugs? Are 
they compromising the safe use of some drugs, leading consumers to 
believe the drugs are safer or more efficacious than they may actually 
be? Are they inducing demand for drugs that would not otherwise be 
first-line treatments?
    I am sure we will all agree today that we will soon need to know 
the answers to these questions. Opinions about the effects of DTC ads 
will not suffice in the long run. We strongly support research that 
probes these issues.
    Research is needed to better understand the positive role that DTC 
ads could be playing. If studies find that DTC ads are inducing 
millions of Americans to go to the doctor for needed visits and that 
they are then getting appropriate care they would not otherwise get, 
then DTC advertising may be a powerful new tool to help create a 
healthier population. If, on the other hand, studies find that 
prescription drug mass media ads are inducing millions of inappropriate 
prescriptions, then we may have to conclude we have a problem.
    Until studies can determine the impact of DTC advertising, we will 
have to weigh carefully what we already know about the benefits against 
the social and health costs of DTC ads.
    Furthermore, we must recognize that DTC drug ads are not primarily 
designed--and probably never could be--as public health tools. They are 
designed to successfully market specific products. Quite simply, 
consumers need other sources of information on prescription drugs to 
make truly informed choices. We would recommend that the Department of 
Health and Human Services initiate a process to examine how that might 
come about. All health care stakeholders should be involved.
    My final point today is one that often gets overlooked in this 
debate. Spending on DTC ads is growing at a time when pharmaceutical 
companies appear to be increasingly reliant upon the earnings of their 
blockbuster drugs. The power of DTC ads could be an incentive for drug 
companies to invest resources in extending the exclusivity of their 
blockbuster drugs, instead of investing in the development of 
innovative new products. To the extent that DTC ads give companies 
further inducement to protect their aging blockbusters, DTC ads may ill 
serve public health.
    The health of the population is best served by an industry that is 
putting the maximum amount of money into developing truly innovative 
new drugs for the most serious life-threatening and debilitating 
diseases. The public's health will not be advanced as much if drug 
companies focus disproportionately on inducing potentially 
inappropriate consumer demand for repackaged or slightly improved drugs 
to treat a range of non-threatening conditions.
    Prescription drugs help millions of Americans live normal, 
productive lives, yet they are unique consumer products. They have the 
potential for serious harm as well as great benefit. They are part of a 
complex system of medical care that must be ruled first and foremost by 
science and careful human judgement. Congress has long recognized the 
complexity and uniqueness of the pharmaceutical marketplace in their 
regulation of this industry. The growth of DTC advertising poses new 
questions about how consumers perceive prescription drugs and use them. 
DTC ads--just as the products they promote--appear to have the 
potential for benefit but also for harm.
    Thank you.

    Senator Dorgan. Ms. Chockley, thank you very much.
    Mr. Calfee, I understand that you are to catch a plane to 
leave the country.
    Mr. Calfee. That is right.
    Senator Dorgan. So we will call on you so that you can 
testify and leave the country, and I hope it is not a 
reflection on your testimony here.
    [Laughter.]
    Senator Dorgan. But why do you not, so that we can 
accommodate your time issue, why do we not let you proceed, Mr. 
Calfee.

STATEMENT OF JOHN E. CALFEE, Ph.D., RESIDENT SCHOLAR, AMERICAN 
                      ENTERPRISE INSTITUTE

    Mr. Calfee. I appreciate it. I want the record to reflect 
that I planned to leave the country, I made plans to leave the 
country before I made plans to testify.
    I have submitted written testimony and I have some briefer 
remarks to read into the record right now. Mr. Chairman, I 
would like to thank you for inviting me to testify today on the 
effects of direct-to-consumer advertising of prescription 
drugs.
    Economic research has shown that advertising makes markets 
work better. For example, advertising increases the incentives 
for manufacturers to create new or improved products. 
Especially important is the ability of advertising to provide 
information. Society has yet to discover another mechanism that 
is the equal of advertising in its power to provide crucial 
information in a concise, usable, and memorable format, and to 
provide that information to those who need it most.
    The question today is whether the prescription drug market 
provides yet another example of the benefits of advertising or, 
on the contrary, is an exception to the rule. There are good 
reasons, I believe, to expect direct-to-consumer advertising of 
prescription drugs to be a valuable tool for consumers and 
patients. The medical literature documents that millions of 
consumers remain undiagnosed or untreated for serious medical 
conditions for which useful drug therapies exist. A prime 
reason appears to be that consumers are not aware of therapies 
that could help them, especially therapies that are relatively 
new or are improvements over older treatments.
    Examples of such undertreated conditions include 
depression, diabetes, obesity, high blood pressure, and 
elevated cholesterol. In most cases, it is consumers themselves 
who must take the initiative to see their physician and discuss 
their symptoms and possible treatments.
    A striking example of this situation was provided this past 
May in a Federal report on the treatment of elevated 
cholesterol. That report came from the National Cholesterol 
Education Program at the National Institutes of Health. It said 
that millions of middle aged and elderly people could reduce 
their risk of a heart attack by one-third or more if they begin 
taking one of the powerful statin-class drugs for reducing 
serum cholesterol.
    But again, consumers must take the initiative in order to 
realize these benefits. What is needed is to get essential 
information about cholesterol and heart disease to the 
consumers who need it. Now that the flurry of publicity about 
the NIH report has passed, it is up to advertising to do the 
real work of alerting consumers.
    I believe it is fair to say that direct-to-consumer 
advertising is likely to provide consumers with essential 
information about cholesterol and heart disease faster and 
better than any information program mounted by governments, 
public health organizations, or health care providers.
    The proposition that advertising can help consumers in 
dealing with prescription drugs is not merely theoretical. We 
now have ample evidence of the benefits of direct-to-consumer 
advertising. Much of this evidence can be found in the consumer 
surveys conducted by the Food and Drug Administration, 
Prevention magazine, and other organizations. These surveys 
show that consumers like DTC advertising and they think it 
helps them talk to their doctors about medical conditions. DTC 
advertising inspires consumers to learn more about illnesses 
and drug therapies. It tends to make consumers more aware of 
both the benefits and risks of pharmaceuticals as many 
consumers read and pay attention to the risk information in 
advertising.
    Twenty-seven percent of respondents in the FDA survey were 
prompted by ads to talk to their doctors about medical 
conditions they had never previously discussed with their 
doctors. DTC ads also remind patients to refill their 
prescriptions and to have confidence in the value of continuing 
their therapies, as was pointed out by the FDA spokesman just 
earlier.
    Fortunately, there is little convincing evidence of adverse 
effects from DTC advertising. Expenditures on DTC ads are only 
about 2 percent of total spending on prescription drugs. There 
is little reason to think that DTC ads raise prices. Average 
prices in the heavily advertised statin drug market, for 
example, have been stable for the past 6 years despite 
escalating demand.
    DTC advertising is also unlikely to contribute to overall 
expenditures on prescription drugs except to the extent that 
ads encourage patients to obtain needed therapies that they 
would otherwise do without. There is little, if any, evidence 
that DTC ads have caused systematic inappropriate prescribing. 
Risk-benefit information in ads tends to be reasonably 
balanced. Indeed, the FDA would hardly tolerate anything else.
    Only about 4 percent of respondents to the FDA's 1999 
survey on DTC advertising said that they had encountered 
adverse reactions from their doctors when they talked about 
advertised drugs. In fact, overwhelming proportions of survey 
respondents in the FDA survey reported that when they asked 
their physicians about advertised drugs their questions were 
met with tolerance and respect and were treated as ordinary 
parts of physician-patient interactions.
    In conclusion, DTC ads appear to be providing consumers 
with a useful, even essential, tool in today's rapidly changing 
health care market.
    That concludes my remarks. I would be glad to answer 
questions.
    [The prepared statement of Mr. Calfee follows:]

Prepared Statement of John E. Calfee, Ph.D., Resident Scholar, American 
                          Enterprise Institute
    Mr. Chairman, I wish to thank you for inviting me to testify today 
on the effects of direct-to-consumer (DTC) advertising of prescription 
drugs. I am an economist who has devoted considerable attention to 
advertising, health care markets, and the pharmaceutical industry. 
During 1980-1986, I served in the Bureau of Economics at the Federal 
Trade Commission, where I specialized on consumer protection, including 
advertising regulation. Some of what I say today is drawn from my 
recently published book, Prices, Markets and the Pharmaceutical 
Revolution (AEI Press, 2000). That book is available from the 
publisher, AEI Press, and is also downloadable from the American 
Enterprise Institute website (www.aei.org). Earlier, I wrote a book on 
advertising, Fear of Persuasion: A New Perspective on Advertising and 
Regulation (London: Agora; North American distribution by the American 
Enterprise Institute). I have also written numerous articles and book 
chapters on pharmaceutical advertising and related topics, and recently 
presented the results of a new empirical study of the effects DTC 
advertising for the statin class of cholesterol-reducing drugs (Calfee, 
Winston, and Stempski 2001). Much of this testimony is based on a 
recently released paper on what we can learn from consumer surveys on 
DTC advertising (Calfee 2001).
    This statement addresses four topics: (1) the relationship between 
DTC advertising and prescription drug prices; (2) the relationship 
between DTC advertising and prescription utilization and costs; (3) why 
DTC advertising is likely to help consumers and patients; and (4) what 
consumer research can tell us about the impact of DTC advertising.
DTC Advertising and Prescription Drug Prices
    Expenditures for out-patient prescription drugs have been 
increasing at about 15% annually (Berndt 2000; NIHCM 2001). Several 
studies have found that about three-fourths of these increases have 
been caused by expanded usage and switching to newer and more effective 
drugs, while price increases have accounted for only about one-fourth 
(Berndt 2000; Dubois et al. 2000; RxHealth Value 2001). Even this 
modest role for price increases is overstated, because standard 
measures of pharmaceutical prices fail to take into account 
improvements in the quality and value of new drugs or drugs that have 
found expanded uses (Triplett 1999).
    These facts suggest that even if DTC advertising increases prices, 
such an effect has been quite limited simply because overall price 
increases have been small. But there is little reason to expect DTC 
advertising to significantly increase prices at all. Research has 
generally found that advertising tends to reduce prices, rather than 
increase them, primarily because advertising makes markets more 
competitive (Calfee 1997, p. 10-11, and citations therein).
    A current example of the separation between DTC advertising and 
prescription drug prices can be found in the market for the statin 
class of cholesterol-reducing drugs such as Pravachol, Zocor, and 
Lipitor. Total expenditures for statin drugs have increased rapidly, 
making this one of the largest therapeutic categories in terms of total 
sales (NIHCM 2001). Statin drugs have also been among the leaders in 
DTC advertising (NIHCM 2001). Yet average statin drug prices have been 
stable or even slightly declining, according to data from the widely 
respected market research firm, IMS Health (proprietary data supplied 
to author, summarized in Calfee, Winston, and Stempski 2001). Moreover, 
the oldest statin drug, Mevacor, is about to go off patent. Hence 
average statin drug prices may substantially decline in the future.
DTC Advertising and Prescription Drug Expenditures and Utilization
    DTC advertising totaled approximately $2.6 billion in 2000 (Adams 
2001). This is about 2% of total prescription drug expenditures, which 
were recently estimated at $132 billion (NIHCM 2001). Clearly, even the 
total elimination of DTC advertising would have a negligible direct 
effect on total pharmaceutical costs.
    The real question, however, is whether DTC advertising pushes 
expenditures upward and if so, whether it increases expenditures 
inappropriately. There is little evidence that recent increases in drug 
expenditures have been caused by inappropriate prescriptions. For 
example, a recent unpublished study of the rapidly growing statin drug 
market found no tendency toward less appropriate prescribing in this 
rapidly growing market (Dubois, et al., 2001). On the whole, increases 
in drug utilization seem to be driven primarily by the fact that health 
care organizations, physicians, and patients find many of the newer 
drugs to be extremely valuable. In fact, there is strong evidence that 
many of the most effective drugs are underused, rather than overused 
(see citations in the next section). Hence public debate has focussed 
on how to pay for more extensive drug therapy, rather than on how to 
curtail it.
    Whether DTC advertising is actually increasing usage has apparently 
been the subject of very little systematic research. In an attempt to 
fill this gap, I and two co-authors undertook a study of the statin 
drug market (Calfee, Winston, and Stempski 2001). Using proprietary 
data on DTC advertising, other forms of promotion, statin 
prescriptions, statin sales, and cholesterol-related office visits, 
plus other data, were found no detectable influence from DTC 
advertising or other forms of promotion on the volume of statin 
prescriptions, which simply increased steadily throughout the study 
period regardless of large fluctuations in DTC advertising. One reason 
for the apparent lack of a short-term connection between advertising 
and prescriptions is the fact that several steps must take place 
between the time when a consumer reacts to an ad and when that consumer 
receives a prescription (initial physician visit, cholesterol check, 
advice for life-style changes, etc.)--if a prescription is written at 
all.
    This is not to say that DTC advertising does not increase sales for 
advertised brands. But the evidence suggests that prescribing decisions 
are dominated by the physician's advice, which may involve non-drug 
therapy, a generic prescription, or an over-the-counter drug 
recommendation, as alternatives to prescribing the advertised brand.
Why DTC Advertising Is Likely to Help Consumers and Patients
    Decades of research have established that advertising makes markets 
work better by providing information and enhancing competition (Calfee 
1997). Advertising is especially useful for providing consumers with 
essential information that they would otherwise ignore, fail to 
receive, or receive too late. The Federal Trade Commission, which 
regulates most advertising, has emphasized that advertising plays an 
essential role in improving consumer information and otherwise 
improving markets (FTC 1996).
    There are compelling reasons to expect DTC advertising to improve 
the prescription drug market. Some of the most important medical 
information--especially relatively new information--often fails to 
reach physicians or patients in a timely manner. This situation is 
reflected in the proliferation of practice guidelines for physicians, 
and also in published findings that medical practice often falls well 
short of what can be achieved by following even the least controversial 
aspects of consensus guidelines (Calfee 2000, p. 24-26). Consumers and 
patients, of course, tend to be even less well informed than their 
doctors.
    Many of the most valuable new drugs involve conditions or illnesses 
that require consumers to take the initiative in seeking medical advice 
for dealing with depression, for example, or to learn whether one is at 
risk for heart disease and if so, what can be done to reduce that risk. 
A number of studies and consensus statements from the medical community 
have documented the existence of large numbers of under-diagnosed and 
undertreated consumers who suffer from serious, yet treatable medical 
conditions such as elevated cholesterol, depression, obesity, diabetes, 
and hypertension (Calfee 2000, p. 24-26).
    A new report from the National Cholesterol Education Program at the 
National Institutes of Health illustrates these trends. That report 
concluded that elevated cholesterol should be treated much more 
aggressively than in the past, even as earlier studies have found that 
most persons who should have been treated under the previous guidelines 
were in fact not treated and often, not even identified (NIH 2001).
    These circumstances dictate that patients and consumers must play 
an active role in their own health care. In particular, consumers need 
to acquire information about medical therapies, talk to their 
physicians about medical symptoms and conditions, and decide with their 
doctors how to deal with illnesses and conditions.
    Both the FTC (1996) and the FDA have noted the potential value of 
DTC advertising in addressing these problems. The Food and Drug 
Administration, in particular, has stated, ``It [DTC advertising] is 
consistent with the whole trend toward consumer empowerment. We believe 
there is a certain public health benefit associated with letting people 
know what's available.'' (Stolberg 2000). Even the American Medical 
Association, whose constituency has traditionally opposed prescription 
drug advertising to consumers, recently issued a statement that 
concluded, ``If used appropriately, direct-to-consumer (DTC) 
advertising has the potential to increase patient awareness about 
treatment options and enhance patient-physician communication. 
Advertising directly to the public educates patients, enabling them to 
better understand and participate in medical care.'' (AMA 2000). In 
1998, Lancet, a leading British medical journal, ran an editorial 
arguing that DTC advertising would benefit European consumers.
What Consumer Research Can Tell Us about the Impact of DTC Advertising
    In August 1997, the FDA relaxed its regulatory requirements for DTC 
advertising on broadcast media including television (Calfee 2001, FDA 
1997). This decision triggered large increases in the volume of 
television DTC advertising while also prompting a shift from print to 
broadcast media. In August 1999, after a two-year review, the FDA 
reaffirmed its new policy, while also announcing its intention to 
review DTC advertising again in 2001 (FDA 1999a). This past March, the 
FDA announced the beginning of its latest review, which will include 
commissioning surveys of both consumers and physicians (FDA 2001).
    In the meantime, several studies have appeared on the impact of DTC 
advertising. These consist primarily of a number of nationally 
representative surveys of consumers. The most notable examples include 
a 1999 survey commissioned by the FDA itself (FDA 1999b, 1999c), and a 
series of surveys commissioned by Prevention Magazine (1999, 2000). 
Other more limited, but nonetheless useful research includes national 
consumer surveys by AARP, the National Consumers League, and NewsHour 
with Jim Lehrer (with the Kaiser Family Foundation and the Harvard 
School of Public Health); a survey of California consumers (Bell, et 
al. 2000), and content analyses of individual DTC ads (Wilkes 2000). I 
focus here on the findings from national surveys, especially those by 
the FDA and Prevention Magazine.
DTC Advertising and Consumer Information
    The national consumer surveys have provided a number of useful 
findings on the relationship between DTC advertising and consumer 
knowledge about prescription drugs. One finding is that DTC ads provide 
a reasonable balance of information about both benefits and risks. In 
the FDA survey, for example, there was little difference in the 
prominence of benefits vs risks or warnings, and 70% disagreed with the 
statement that DTC ads ``make it seem like a doctor is not needed to 
decide whether a drug is right for me.'' In a response to a 1999 
Prevention survey question about whether advertising made respondents 
feel more or less confident about drug safety, 70% said ``no 
difference'' or ``less confident.''
    The surveys also supply direct and indirect evidence that DTC 
advertising provides valuable information to consumers. Responses 
revealed very high levels of awareness and attention to DTC ads, as the 
proportion of respondents recalling DTC ads ranged between 72% (FDA 
survey) and 95% (aided recall in the 1999 Prevention survey). Such high 
awareness levels strongly suggest that consumers gained information 
about the core topics of DTC ads: details on a variety of medical 
conditions, potential therapies, alternative dosages, and other 
important topics, in addition to risk information. The potential value 
of making so much information available through advertising is clear 
from the AARP survey results, in which 27% of respondents said their 
doctors seldom or never discussed pharmaceutical risks, and another 18% 
said physicians did so only sometimes, while 27% said their doctors 
rarely or never discussed alternative drug therapies.
    The bulk of respondents (on the order of 80% in the FDA survey) 
noticed information on benefits, risks, and warnings. Substantial 
proportions read some or all of the fine-print risk information in 
print ads, and readership was much higher for those who had a special 
interest in the advertised drug. In particular, the FDA survey found 
remarkably high levels of readership of the fine-print risk information 
in print ads: 40% said they read half or more of that information, 
another 26% said they read a little of it, and 85% said they would read 
all or almost all of the information if they were especially interested 
in the drug. The Prevention survey obtained roughly similar results, 
also finding high levels of attention to detailed risk information.
    The surveys also suggest that DTC ads motivated consumers to seek 
additional information from numerous sources, including, of course, 
their own doctors. Of special importance is the finding that DTC ads 
opened up new topics for consumers to investigate. Twenty-seven percent 
of respondents in the FDA survey were prompted by ads to talk to their 
doctors about medical conditions they had never previously discussed. 
These results are consistent with the fact that many of the most 
heavily advertised drugs treat conditions that are widely believed by 
the medical community to be undertreated, such as elevated cholesterol, 
depression, obesity, diabetes, and hypertension.
    Of special interest in the FDA survey was the balance of 
information on risks and benefits in DTC ads. A series of detailed 
questions revealed a remarkably balanced assessment. Asked what kinds 
of information they saw in ads, 87% of respondents said, ``the benefits 
of the drug,'' while 82% said, ``risks or side effects,'' and 81%, 
``who should not take the drug.'' The proportion of respondents who 
thought ads lacked information on benefits (49%) was nearly as large as 
the proportion who though ads lack information on risks (59%). The 
Prevention surveys provided similar results.
DTC Advertising and Patient-Doctor Relationships
    Both the FDA and Prevention surveys document that large majorities 
of consumers agree that DTC ads provided sufficient information to 
prepare to talk to their doctors--70% in the FDA survey. But 
advertising was far from a dominant influence. In the FDA survey, 
respondents said the main reasons for expecting a new prescription 
were: past prescription history, information from friends or relatives, 
and previous discussions with physicians.
    Large majorities of respondents to the FDA survey reported 
favorable assessments of their talks with their doctors, and 
encountered no resentment or other unfavorable reaction. This is 
apparent from the numbers in Table 1. Most respondents said their 
doctor welcomed their questions (81%), reacted as if those questions 
were an ordinary part of a visit (71%), and proceeded to discuss the 
drugs with the patient (79%). Only 4% said their physician ``seemed 
angry or upset.'' Equally important, of those who had not asked such 
questions of their physicians, only 3% expected to encounter an adverse 
reaction if they were to ask such a question in the future. Eighty-five 
percent of respondents were satisfied or very satisfied with their 
discussions with physicians about advertised drugs, with only 7% 
unsatisfied or very unsatisfied. Finally, 62% agreed or strongly agreed 
that DTC ads helped them have better discussions with their physicians.

    Table 1. Physician Reactions When Asked About an Advertised Drug
------------------------------------------------------------------------
                                               Question 33: ``Which, if
                                                any, of these possible
                  Question 28: ``Which, if   reactions do you think your
                   any, of these possible      doctor would have if you
                 reactions did your doctor   asked about a  prescription
                 have when you asked about        drug you had seen
                  the [advertised] drug?''      advertised?'' (May say
                                              ``Yes'' to more than one.)
------------------------------------------------------------------------
Welcomed                               81%                          69%
 question
------------------------------------------------------------------------
Discussed drug                         79%                          82%
------------------------------------------------------------------------
Reacted as if                          71%                          56%
 the question
 were ordinary
 part of visit
------------------------------------------------------------------------
Got angry or                            4%                           3%
 upset
------------------------------------------------------------------------
None of the                             2%                           1%
 above
------------------------------------------------------------------------
Don't know/                             1%                           2%
 refused
------------------------------------------------------------------------
Sample size                            220                          607
------------------------------------------------------------------------
Adapted from: Food and Drug Administration, Center for Drug Evaluation
  and Research, Division of Drug Marketing, Advertising, and
  Communications. Attitudes and behaviors associated with direct-to-
  consumer (DTC) promotion of prescription drugs: main survey results.
  Available at: http://www.fda.gov/cder/ddmac/dtcindex.htm. Accessed May
  1, 2001.

    In 26% of the discussions motivated by advertising, according to 
the Prevention survey, patients said they requested prescriptions for 
specific brands, and they usually got one. We do not know, however, the 
extent to which these requests arose from discussions in which 
physicians had already made clear that the decision was up to the 
patient, perhaps because the choice was obvious or because any of 
several alternatives was acceptable. In the FDA survey only about half 
of physicians wrote a prescription when asked about a specific drug. 
These surveys provide no reason to suggest that these requests and 
questions about specific advertised drugs tended to yield inappropriate 
prescriptions.
Overall Consumer Attitudes Toward DTC Advertising
    Consumers generally like DTC ads and find them useful. In the FDA 
survey, those who liked DTC ads outnumbered those who did not by nearly 
two to one. Eighty-six percent said the ads ``help make me aware of new 
drugs,'' and 62% said DTC ads help them have better discussions with 
their physician about their health. In the 1999 Prevention survey, 76% 
thought that ads ``allow people to be more involved with their health 
care,'' 72% said that DTC ads ``educate people about the risks and 
benefits of prescription medicines,'' and 63% said that DTC ads ``help 
people make their own decisions about prescription medicines.'' 
Finally, 76% of respondents to the National Consumers League survey 
agreed that prescription drug ads ``increase consumer knowledge about 
medicines,'' and 78% agreed that prescription drug ads ``increase 
consumer knowledge about disease.''
Positive Spillovers from DTC advertising
    Survey research also provides something that may be surprising to 
most observers: evidence that DTC advertising provides spillover 
benefits to consumers, beyond any gains realized by the manufacturers 
who pay for the ads. One spillover benefit, for example, is increased 
consumer awareness of the simple fact that virtually all prescription 
drugs are risky and have side effects. This must be clear to anyone who 
has perused a few of the ``brief summaries'' in print ads or noticed 
the staccato list of warnings in TV ad voice-overs. In addition, the 
1999 Prevention survey found that physicians tend to provide more risk 
information to those patients who ask about advertised drugs.
    A second category of spillover benefits is the dissemination of 
information about new, previously undiscussed conditions. Advertising 
about elevated cholesterol, obesity treatments, and the like do not 
invariably lead to prescriptions for the advertised drugs. On the 
contrary, when ads induce patients to talk to their doctor, most 
patients do not actually ask for or about the brand whose advertising 
sparked the discussion, and when they do, the result is a mixture of 
prescriptions for the advertised drug, prescriptions for a competing 
drug, recommendations for OTC drugs, and advice to change life-styles 
or behavior. Ads can raise awareness of the need for a particular type 
of drug to treat a particular condition, but the benefits of that 
consciousness-raising may go to the patient and to competitors rather 
than to the advertiser.
    A third spillover benefit is to call consumers' attention to 
nondrug approaches to improved health. Many ads start out by mentioning 
the value of dietary changes and exercise. When DTC ads succeed in 
getting consumers to talk to their doctors about obesity, diabetes, 
depression, and cholesterol levels, those consumers probably learn that 
behavioral and life-style changes are the first line of treatment. In 
response to a 2000 Prevention survey question asked of respondents who 
said that ads had caused them to talk to their physician, 53% said 
their doctor had mentioned a nondrug therapy for their condition. The 
proportions were much higher for certain conditions: diabetes (77%), 
high cholesterol (92%), and obesity (84%).
    Finally, a fourth example of spillover benefits is inducing 
compliance with drug therapies. Research has shown that inadequate 
compliance with physician instructions when taking prescription drugs 
is an extremely common and dangerous problem (Calfee 2000, p. 19). 
Advertising is an excellent vehicle for inducing better compliance 
because consumers tend to pay attention to advertising for brands they 
use. It is no surprise, therefore, that the FDA survey found that 
consumers pay special attention to ads for drugs they are taking or in 
which they have a special interest.
    In 2000 Prevention survey, about half of those respondents taking a 
prescription drug recalled seeing an ad for a drug they were using. 
Thirty-six percent said the ads made them feel better about the safety 
of their prescriptions, while only 3% said the ads made them feel 
worse. In response to a crucial question--``Do ads make you more or 
less likely to take your medicine regularly?''--``more likely'' 
outscored ``less likely'' by 22% to 3%. In addition, 33% in the 1999 
survey said that prescription drug ads reminded them to have their 
prescriptions refilled.
    There is no reason to expect the reminder powers of DTC advertising 
to be restricted to the advertised brand. Although no research appears 
to have been done on the topic, these survey results strongly suggest 
that by reminding patients to take their medicine and refill their 
prescriptions, DTC ads tend to encourage patients to persist in their 
drug therapy.
Conclusions
    There are good reasons to expect DTC advertising to provide 
valuable information to consumers and otherwise improve the health care 
market. The emerging evidence on DTC advertising effects, particularly 
the results of consumer surveys by the FDA, Prevention Magazine, and 
others, indicates that DTC ads are in fact providing substantial 
benefits while avoiding most or all of the problems that some analysts 
have suggested DTC ads could bring.
    This evidence goes far toward explaining why the FDA reaffirmed its 
policy of permitting DTC advertising in August 1999. Indeed, the agency 
noted at the time that ``FDA is unaware of any data supporting the 
assertion that the public health or animal health is being harmed, or 
is likely to be harmed, by the Agency's actions in facilitating 
consumer-directed broadcast advertising'' (FDA 1999b). The FDA is to be 
congratulated for persisting in its policy toward DTC advertising in 
the face of criticism and opposition from diverse segments of the 
health care community. Equally worthy of praise is the fact that the 
FDA commissioned a well-designed consumer survey that could easily have 
uncovered severe problems with its new policy, rather than providing 
support for the policy (which it did, of course).
    We have learned at least six things from the leading consumer 
surveys and other evidence on DTC advertising. First, we can largely 
rule out the possibility that DTC advertising is causing systematic 
consumer deception, including the inappropriate downplaying of risks 
and side effects. The FDA and Prevention surveys, in particular, 
addressed this topic in so many ways that it is very unlikely that 
widespread consumer deception has escaped detection by the FDA 
regulators.
    Second, DTC advertising provides valuable information, and not just 
on obvious topics such as potential treatments and dosages, but also on 
risks and side effects. On the whole, DTC advertising appears to 
increase the salience of both risks and benefits from drug therapy. 
Third, the information in DTC advertising motivates consumers to seek 
additional information from many sources, but especially from 
physicians and pharmacists. Many of these consumers ask about 
conditions they had not previously discussed with their doctors.
    A fourth finding is that from the patient's perspective at least, 
DTC advertising is causing almost no tension in the doctor's office. 
Very few respondents--usually well under 5%--encountered resentment or 
resistance when they brought up what they had seen in advertising, or 
asked about specific drugs. Fifth, consumers like DTC advertising. They 
think it helps them in making decisions and in talking to their 
doctors.
    Sixth, DTC advertising yields significant spillover benefits that 
go to consumers rather than to advertisers. Such benefits range from 
heightened awareness of the inherently risky nature of prescription 
drugs to better compliance with drug therapies and even motivation to 
pursue life-style and behavioral changes that may obviate the need to 
use pharmaceuticals. In particular, ads reminded consumers to take 
their medications and to refill their prescriptions. Overall, DTC ads 
appear to make patients more comfortable with the risks and benefits of 
the medicines they take.
    Overall, these survey results are strongly supportive of a 
situation in which consumers are motivated by advertising first to seek 
additional information--specially from physicians, and particularly for 
previously untreated or inadequately treated conditions--and then to 
work with their doctor to reach a decision about what if any 
prescription drug to use.
References
    Adams, C. (2001) ``FDA plans to review policy allowing direct-to-
consumer drug ads for TV,'' Wall Street Journal. March 28, 2001, p. B1.
    American Medical Association (2000) Council on Ethical and Judicial 
Affairs of the American Medical Association, ``Direct-to-Consumer 
Advertisements of Prescription Drugs,'' 55/1 Food and Drug Law Journal 
119-124.
    Bell, Robert A., Michael S. Wilkes, and Richard Kravitz (2000) 
``The Educational Value of Consumer-targeted Prescription Drug Print 
Advertising,'' 49/12 Journal of Family Practice (December).
    Calfee, John E. (1997) Fear of Persuasion: A New Perspective on 
Advertising and Regulation, London: Agora; North American distribution 
by the American Enterprise Institute.
    Calfee, John E. (2000) Prices, Markets, and the Pharmaceutical 
Revolution. American Enterprise Institute, Washington, D.C.
    Calfee, John E. (2001) ``What Consumer Surveys Show About Direct-
to-Consumer
    Advertising of Prescription Drugs,'' available from author and from 
the Coalition for Health Care Communication (www.cohealthcom.org).
    Calfee, John E., Clifford Winston, and Randolph Stempski (2001) 
``The Effects of Direct-to-Consumer Advertising for Cholesterol-
reducing Drugs,'' presented at the University of Chicago Conference on 
The Regulation of Medical Innovation and Pharmaceutical Markets, April 
20-21, 2001.
    Dubois, Robert W., Charles M. Alexander, Sally Wade, Andrew Mosso, 
Leona Markson, J.D. Lu, Soma Nag, and Marc L. Berger (2001) ``Growth in 
Use of Lipid Lowering Therapies: Bad News? Good News? Or the Wrong 
Question?'' Draft available from Robert W. Dubois, Protocare Sciences, 
Inc., 2400 Broadway, Suite 100, Santa Monica, CA 90404.
    Federal Trade Commission, Bureau of Consumer Protection and Bureau 
of Economics (1996), ``Comments to the Food and Drug Administration on 
Direct-to-Consumer Promotion of Prescription Drugs,'' January 11, 1996.
    Food and Drug Administration, Center for Drug Evaluation and 
Research (1997) ``Draft Guidance for Industry on Consumer-Directed 
Broadcast Advertisements,'' July 1997; announced in Federal Register, 
v. 62, n. 155, p. 43171-43173 (Aug. 12, 1997, Docket 97D-0302).
    Food and Drug Administration, Center for Drug Evaluation and 
Research (1999a) ``Guidance for Industry: Consumer-directed Broadcast 
Advertisements,'' August 1999; announced in Federal Register, v. 64, n. 
152, p. 43197-43198 (Aug. 9, 1999, Docket 97D-0302).
    Food and Drug Administration, Center for Drug Evaluation and 
Research (1999b) ``Questions and Answers on Guidance for Industry: 
Consumer-Directed Broadcast Advertisements,'' August 1999; announced in 
Federal Register, v. 64, n. 152, p. 43197-43198 (Aug. 9, 1999, Docket 
97D-0302).
    Food and Drug Administration, Center for Drug Evaluation and 
Research, Division of Drug Marketing, Advertising, and Communications 
(1999c) ``Attitudes and Behaviors Associated with Direct-to-Consumer 
(DTC) Promotion of Prescription Drugs: Main Survey Results,'' available 
at www.fda.gov/cder/ddmac/dtcindex.htm.
    Food and Drug Administration (2001) ``Agency Information Collection 
Activities; Proposed Collections; Comment Request; Assessment of 
Physician and Patient Attitudes Toward Direct-to-Consumer Promotion of 
Prescription Drugs,'' Docket No. 01N-0078, Federal Register: March 19, 
2001 (Volume 66, Number 53).
    Lancet (1998) Editorial, ``Pushing Ethical Pharmaceuticals Direct 
to the Public,'' v. 351, March 28.
    National Consumers League (1998) ``Health Care Information and the 
Consumer: A Public Opinion Survey.'' Washington, D.C.: National 
Consumers League (1701 K Street, NW, Suite 1200, Washington, DC 20006).
    National Institute for Health Care Management (NIHCM) (2001) 
``Prescription Drug Expenditures in 2000: the Upward Trend Continues.'' 
Washington, D.C.: NIHCM Foundation.
    NewsHour with Jim Lehrer, Kaiser Family Foundation, Harvard School 
of Public Health (2000a) ``National Survey on Prescription Drugs: 
Toplines.'' Available at www.kff.org.
    NewsHour with Jim Lehrer, Kaiser Family Foundation, Harvard School 
of Public Health (2000b) ``National Survey on Prescription Drugs: 
Highlights and Chartpack.'' Available at www.kff.org.
    National Institutes of Health, National Cholesterol Education 
Program (2001) ``Recommendations on Lipoprotein Measurement,'' from the 
Working Group on Lipoprotein Measurement.
    Prevention Magazine (1999) ``A National Survey of Consumer 
Reactions to Direct-to-Consumer Advertising.''
    Prevention Magazine (2000) ``International Survey on Wellness and 
Consumer Reactions to DTC Advertising of Rx Drugs.''
    RxHealth Value, ``Prescription Drug Expenditures Increase More Than 
24%,'' downloaded May 17, 2001 from www.rxhealthvalue.com, summarizing 
a May 2001 report from the Schneider Institute for Health Policy at 
Brandeis University.
    Stolberg, Sheryl Gay (2000) ``Ads that Circumvent Doctors: Want a 
New Drug? Plenty to Choose From on TV,'' New York Times, January 23, 
2000.
    Wilkes, Michael S., Robert A. Bell, and Richard L. Kravitz (2000) 
``Direct-To-Consumer Prescription Drug Advertising; Trends, Impact, And 
Implications,'' Health Affairs, March/April.

    Senator Dorgan. Mr. Calfee, thank you very much.
    You must leave soon, is that correct?
    Mr. Calfee. That is correct.
    Senator Dorgan. Senator Wyden.
    Mr. Calfee. But not immediately, please.
    Senator Dorgan. Let me do this, if you do not mind, with 
your permission. Let me hear from Dr. Wolfe and Dr. Glover. It 
will take about 10 minutes, then we will have some questions. 
We will ask the questions of you first so that you may leave.

STATEMENT OF SIDNEY M. WOLFE, M.D., DIRECTOR, PUBLIC CITIZEN'S 
                     HEALTH RESEARCH GROUP

    Dr. Wolfe. Thank you.
    There is little doubt that false and misleading advertising 
to patients and physicians can result in prescriptions being 
written for drugs that are more dangerous and/or less effective 
than perceived by either the doctor or the patient. It is 
counterintuitive not to believe that misleading advertising, of 
which there is quite a bit, and I will go through some of the 
numbers, does not convince people as much or more than non-
misleading advertising, and therefore Dr. David Kessler's 
statement, which I agreed with when he made it, that 
advertising can cause death and injury if it results in 
inappropriate prescribing, has got to be true.
    The fact that there are not any studies of it, your point 
Mr. Chairman, it is not that there are careful studies which 
have shown no evidence of inappropriate prescribing. There are 
not any good studies that have been done. As I said, the 
evidence that the industry has is that when they do direct-to-
consumer advertising, as pointed out, in conjunction with 
prescription advertising to doctors, the prescribing goes way 
up. It is a combination of the both. An often misled prescriber 
and a misled patient can combine to get a prescription written 
that might otherwise not have been written.
    This can then lead to a subsequent toll of deaths and 
injuries that would not have occurred had safer, more effective 
drugs been prescribed. Senator Wyden's question is also very 
legitimate in the sense that inappropriate prescribing may be 
prescribing a more expensive drug instead of a less expensive 
drug, ultimately leading the patient not to have enough money 
to take care of themselves. So from the standpoint of cost, 
inappropriate prescribing can also be dangerous.
    The more than 500 prescription drug advertisements that 
have been found by the FDA to violate Federal laws and 
regulations from 1997 to the present include approximately 90 
direct-to-consumer ads. These numbers would be significantly 
larger if FDA's Division of Drug Marketing, Advertising, and 
Communication had more staff to investigate the rapidly 
expanding area of DTC drug promotion.
    As seen in the table included in my testimony--these are 
taken from FDA's own data--there has been a sharp and steady 
decrease during the last 3 years in the number of FDA warning 
letters and notices of violation of FDA laws and regulations to 
drug companies concerning prescription drug advertising. For 
the last full year, mid-2000 through mid-2001, the total number 
of advertising enforcement actions, 74, was less than one-half, 
47 percent, of the 158 enforcement actions taken 3 years ago, 
mid-1997 through mid-1998.
    There is no evidence of an advertising/pharmaceutical 
industry epiphany resulting in fewer illegal advertisements for 
prescription drugs. Therefore the only plausible explanation 
for this dangerous decrease is that the police force, DDMAC, 
has not been strong enough in numbers of investigators, along 
with the lack of adequate pro-enforcement leadership, meaning 
from the Commissioner and the head of the drugs division, from 
the top officials.
    That this latter explanation, inadequate enforcement, is 
correct will be seen--and my optimism comes out here--when the 
FDA, with the urging and support of your committee and the 
Appropriations Committee, begins to increase the number of 
actions taken against these violative acts. Until then, 
Americans, both physicians and patients, will be harmed by 
prescribing decisions about which drugs to use based on all too 
frequently false and misleading information from advertisements 
which are much less likely now to be stopped because of poor 
enforcement.
    In addition to more staff, there is a dire need for direct-
to-consumer specific regulation since, other than the late 
1990's guidance concerning TV advertising which Dr. Ostrove 
spoke of, which is a guidance, not a regulation, there are no 
regulations specifically written for direct-to-consumer 
advertising. The FDA has been using regulations promulgated 
after the 1962 Kefauver-Harris amendments that were clearly 
intended for prescription drug advertising directed to health 
professionals, such as doctors and pharmacists.
    We have been urging the agency since the mid-1980's to 
propose and finalize such consumer-specific DTC regulations 
that would make it easier to evaluate the ads in the context of 
patient, not health professional, comprehension.
    Beyond more staff and direct-to-consumer specific 
regulations, there is a need for much more enforcement power. 
At present the FDA is limited to a notice of violation or 
warning letter to companies found to violate the law or 
regulations. Theoretically, in the face of multiple warnings to 
the same company, criminal prosecution is a possible tool. This 
latter power has only been used a handful of times in the past 
30 years. To our knowledge, never has it been used for direct-
to-consumer advertising.
    Despite a series of 11 illegal ads for Claritin, 8 of which 
were direct-to-consumer, 14 illegal ads for Flonase and 
Flovent, two drugs, one used for nasal problems and the other 
for pulmonary problems--8 of these 14 illegal ads are DTC--and 
5 illegal ads for Celebrex, one DTC, no criminal prosecution of 
these companies. What is more, the ability to assess drug 
companies large civil monetary penalties for advertising 
violations could serve as a deterrent, but the FDA has no 
authority at all to impose civil monetary penalties on any drug 
company for anything, whether it is advertising violations or 
anything else.
    Senator Kennedy attempted to get such authority included in 
the 1997 Food and Drug Modernization Act. It was fought hard 
and successfully by the industry. If the FDA does not have the 
ability to impose massive fines, if not criminally prosecute 
these companies, the companies will just laugh and continue 
violating the law with another violative ad.
    Just briefly, a few articles that certainly do raise some 
serious questions about some of the optimistic things that Dr. 
Ostrove talked about and that Mr. Calfee talked about. In one 
study researchers found that consumers rated the safety and 
appeal of drugs described with an incomplete risk statement 
more positively than those drugs for which risks were described 
more completely. It has obvious implications since many direct-
to-consumer ads understate the safety of drugs.
    Another study found that consumer beliefs that there was 
prior scrutiny of ads, DTC ads, by the FDA and that they were 
held to higher standards than other ads were generally wrong. 
Another study on the educational content--we hear from the 
industry these are for education; they are really not to sell 
drugs; we just want to educate the public--found that, while 
may ads provided information about the name and symptoms of the 
disease for which the drug was being promoted, few educated the 
patients about the success rate of the drug, how long you had 
to use the drug, alternative treatments, including behavioral 
change, which could improve their health, or misconceptions 
about the disease. The authors concluded the ads provide only a 
minimum amount of educational information.
    Finally, one study asked patients what they would do if a 
doctor refused to prescribe a drug that the patient wanted as a 
result of a DTC ad. One-fourth of the patients said they would 
seek a prescription elsewhere and 15 percent said they would 
consider terminating the relationship with the physician. To 
the extent that this obviously impairs the doctor-patient 
relationship, this goes counter to what was said before.
    Patients with these attitudes were ones who had a more 
favorable evaluation of DTC advertising and who possessed more 
faith in the current government regulation of DTC ads.
    In closing, FDA resources and specific regulatory authority 
to monitor the accuracy of drug safety and effectiveness 
portrayed in DTC ads are dangerously inadequate and many 
patients' perceptions of these ads and their subsequent 
response to the ``information'' therein is similarly dangerous. 
The present situation concerning DTC advertising is 
unacceptable and it is our hope that your committee will 
participate in initiating actions to remedy these serious 
problems.
    I would also request that a study put out by another part 
of our organization, Public Citizen Congress Watch, related 
very much to the issues that Senator Wyden raised about drug 
costs and that you raise, be put in the record. It is called 
``Prescription Research and Development Myths: The Case Against 
the Drug Industry's R and D Scare Card.''
    Senator Dorgan. Without objection, it will be put in the 
record. *
---------------------------------------------------------------------------
    * The information referred to has been retained in Committee files.
---------------------------------------------------------------------------
    Dr. Wolfe. Thank you.
    [The prepared statement of Dr. Wolfe follows:]

Prepared Statement of Sidney M. Wolfe, M.D., Director, Public Citizen's 
                         Health Research Group
    Because of the strong First Amendment in the U.S constitution, 
there is no way that DTC prescription drug advertising could ever be 
banned in this country. Having said that, however, there is an urgent 
need for more fine-tuned, better-staffed and much tougher government 
regulation of its content. There is little doubt that false and 
misleading advertising to patients and physicians can result in 
prescriptions being written for drugs that are more dangerous and/or 
less effective than perceived by either the doctor or the patient. This 
can then lead to a subsequent toll of deaths and injuries that would 
not have occurred had safer, more effective drugs been prescribed.
    The more than 500 prescription drug advertisements that have been 
found by the FDA to violate federal laws and regulations from 1997 
through the present include approximately 90 DTC ads. These numbers 
would be significantly larger if FDA's DDMAC (Division of Drug 
Marketing Advertising and Communication) had more staff to investigate 
the rapidly expanding area of DTC drug promotion. Such advertising has 
more than tripled in dollar volume from $791 million in 1996 to $2.5 
billion in 2000. But the number of FDA staff assigned to reviewing and 
investigating all of prescription drug advertising, during the same 
interval, has only increased from 11 in 1996 to 14 at present. I have 
been informed that there is, or will shortly be, an increase in DDMAC 
staff to monitor such advertising and it comes none too soon. Even this 
may well not be adequate.
    As seen in the table on the next page, there has been a sharp and 
steady decrease during the last three years in the number of FDA 
warning letters and notices of violation of FDA laws and regulations to 
drug companies concerning prescription drug advertising. From a peak of 
84 such enforcement actions during the first six months of 1998, the 
number has fallen steadily to 36 FDA actions during the last six months 
of 2000 and an estimated 38 actions during the first six months of 
2001.
    For the last year (mid-2000 through mid-2001) the total number of 
DDMAC advertising enforcement actions--74--was less than one-half (47%) 
of the 158 enforcement actions taken three years ago (mid-1997 through 
mid-1998). There is no evidence of an advertising/pharmaceutical 
industry epiphany, resulting in fewer illegal advertisements for 
prescription drugs. Therefore, the only plausible explanation for this 
dangerous decrease is that the police force--DDMAC--has not been strong 
enough in numbers of investigators along with a lack of adequate pro-
enforcement leadership from the top officials in FDA. That this latter 
explanation, inadequate enforcement, is correct will be seen when the 
FDA, with the urging and support of your committee, begins to increase 
the number of actions taken against these violative ads. Until then, 
Americans--both physicians and patients--will be harmed by prescribing 
decisions about which drugs to use based on all-too-frequently false 
and misleading information from advertisements which are much less 
likely to be stopped because of poorer enforcement by the FDA.




    In addition to more staff, there is a dire need for DTC-specific 
regulations since, other than the late 1990's guidance concerning TV 
advertising--which is a guidance not a regulation--there are no 
regulations specifically written for DTC advertising. The FDA has been 
using the regulations promulgated after the 1962 Kefauver-Harris 
Amendments to the Food, Drug and Cosmetic Act that were clearly 
intended for prescription drug advertising directed at health 
professionals such as doctors and pharmacists. We have been urging the 
agency since the mid-1980's to propose and finalize such consumer 
specific DTC regulations that would make it easier to evaluate the ads 
in the context of patient, not health professional, comprehension. 
Beyond more staff and DTC-specific regulations there is a need for much 
more enforcement power. At present, the FDA is limited to a Notice of 
Violation or Warning Letter to companies found to violate the law or 
regulations. Theoretically, in the face of multiple warnings to the 
same company, criminal prosecution is a possible tool. This latter 
power has only been used a handful of times in the past 35 years. To 
our knowledge, criminal prosecution has never been used in the context 
of DTC advertising, despite, for example, a series of 11 illegal ads 
for Claritin (8 DTC), 14 illegal ads for Flonase/Flovent (8 DTC). 
(Flonase and Flovent are the same drug in two versions, one used for 
allergy, the other for asthma). There have also been five illegal ads 
for Celebrex (1 DTC).
    The ability to assess drug companies large civil monetary penalties 
for advertising violations might actually serve as a deterrent for 
companies who now just stop the violative ad, when requested by the 
FDA, then create and massively disseminate a new one shortly 
thereafter. The FDA currently lacks the authority to impose any civil 
penalties for drug advertising or, in fact, for any other illegal drug 
industry activity concerning prescription drugs. It is long overdue 
that the Congress give the FDA this authority.
    A search of the peer-reviewed, published medical studies concerning 
DTC advertising yields findings that, for the most part, are also quite 
worrisome:

   In one study, researchers found that consumers rated the 
        safety and appeal of drugs described with an incomplete risk 
        statement significantly more positively than those whose risks 
        were described more completely. \1\ (This has significant 
        implications since so many DTC ads understate the safety of 
        drugs.)
---------------------------------------------------------------------------
    \1\ J Health Communic 2000 Oct-Dec;5:349-69.

   Another study found that consumer beliefs that there was 
        prior scrutiny of DTC ads by the FDA and that they were held to 
        higher standards than other ads were generally wrong. A 
        substantial proportion believed that only the safest and most 
        effective drugs could be advertised DTC and that the FDA 
        required prior review of ads. DTC ads led one-fifth of people 
        to request a prescription. \2\
---------------------------------------------------------------------------
    \2\ J Gen Int Med 1999;14:651-7.

   A study on the educational content of DTC ads found that 
        while many ads provided information about the name and symptoms 
        of the disease for which the drug was being promoted, few 
        educated the patients about the success rate of the drug, how 
        long you had to use the drug, alternative treatments including 
        behavioral changes which could improve their health, or 
        misconceptions about the disease. The authors concluded that 
        the ads provided only a minimal amount of educational 
        information. \3\
---------------------------------------------------------------------------
    \3\ J Fam Pract 2000;49:1092-8.

   One study asked patients what they would do if a doctor 
        refused to prescribe a drug that the patient wanted as a result 
        of a DTC ad. One-fourth of patients said they would seek a 
        prescription elsewhere and 15% said they would consider 
        terminating their relationship with their physician. The 
        patients with these attitudes were ones who had a more 
        favorable evaluation of DTC advertising and who possessed more 
        faith in the current government regulation of DTC drug ads. \4\
---------------------------------------------------------------------------
    \4\ J Fam Pract 1999;48:446-52.

    In summary, FDA resources and specific regulatory authority to 
monitor the accuracy of drug safety and effectiveness portrayed in DTC 
ads are dangerously inadequate and many patients' perceptions of the 
ads and their subsequent response to the ``information'' therein is 
similarly dangerous. The present situation concerning DTC advertising 
is unacceptable and it is our hope that your committee will initiate 
---------------------------------------------------------------------------
actions to remedy these serious problems.

    Senator Dorgan. Dr. Wolfe, thank you.
    Next on this panel we will hear from Dr. Glover. Dr. 
Glover, and you are an attorney-physician representing PhRMA, 
is that correct?
    Mr. Glover. That is correct.
    Senator Dorgan. Thank you. Welcome.

          STATEMENT OF GREGORY J. GLOVER, M.D., J.D., 
           ON BEHALF OF THE PHARMACEUTICAL RESEARCH 
                  AND MANUFACTURERS OF AMERICA

    Mr. Glover. Mr. Chairman and Members of the Subcommittee: 
On behalf of the Pharmaceutical Research and Manufacturers of 
America, I thank you for inviting me today to testify on 
direct-to-consumer advertising of prescription drugs. I am a 
licensed physician and a practicing attorney with the law firm 
of Ropes and Gray and I specialize in FDA regulatory issues and 
intellectual property law.
    PhRMA represents the country's major research-based 
pharmaceutical and biotechnology companies, which are the 
source of virtually all new drugs in the United States. PhRMA 
strongly supports direct-to-consumer advertising of 
prescription medicines as currently regulated by FDA and 
opposes any further restrictions on this pro-patient, pro-
health activity.
    Under current practices, patients are now more actively 
involved in their own health care than ever before. Rather than 
remaining uninformed and relying entirely on an increasingly 
complex health care system, patients are asking questions, 
evaluating information, and making choices. Direct-to-consumer 
advertising provides a valuable resource for patients to obtain 
information about specific diseases, conditions, and 
treatments.
    Patients suffering from chronic conditions may be 
dissatisfied with current treatment, but may be unaware that 
different options are available with fewer side effects and 
easier dosing regimens. Similarly, pharmaceutical 
advertisements improve the public health by raising awareness 
of conditions and diseases that often go undiagnosed and 
untreated.
    There are encouraging signs that direct-to-consumer 
advertising is helping to address these issues. A survey by 
Prevention magazine found that, as a result of direct-to-
consumer advertising, an estimated 24.7 million Americans 
talked to their physicians about a medical condition they had 
never previously discussed with a doctor. In other words, 
millions of people who had suffered in silence were encouraged 
to seek help.
    A 1999 survey by Prevention magazine found that 27 percent 
of respondents asked their physicians about conditions they had 
not discussed before. These conditions ranged from arthritis 
and heart disease to depression. In the 2 years that ads for a 
medicine for erectile dysfunction have appeared, millions of 
men have visited their doctors to request a prescription for 
the drug. For every million men who asked for the medicine, it 
was discovered that an estimated 30,000 had untreated diabetes, 
140,000 had untreated high blood pressure, and 50,000 had 
untreated heart disease. These numbers are striking and they 
are just for one drug.
    A growing body of evidence suggests that consumers like 
direct-to-consumer advertising. A 1999 survey by FDA found that 
those who liked these ads outnumbered those who did not by 
nearly two to one. 86 percent said, the ads helped make me 
aware of new drugs and 62 percent said the ads helped them have 
better discussions with their physicians about their health.
    A survey by Prevention magazine found that 76 percent of 
respondents thought ads help people be more involved in their 
health care and 72 percent felt the ads educate people about 
the risks and benefits of prescription medicines.
    There is also growing acceptance of this type of 
advertising by doctors. A survey last year found the 64 percent 
of doctors believe that such advertisements had helped educate 
and inform their patients and 40 percent of the doctors 
surveyed believed that ads have increased patient compliance.
    Critics contend that direct-to-consumer advertising drives 
up the price of drugs. In fact, while total pharmaceutical 
expenditures are rising, price increases have been in line with 
inflation. Most of the increase in drug expenditures has come 
from the increased use of prescription medicines, including the 
use of newer, more effective therapies.
    The increased use of prescription drugs is a healthy trend. 
Drugs not only save lives, they save by reducing the need for 
alternative, more expensive care. Still, only 8.2 percent of 
every health care dollar is spent on prescription medicine, 
compared to 32 percent on hospital care and 22 percent on 
physician and clinical services.
    In summary, direct-to-consumer advertising helps address 
consumers' need for information about diseases and treatments. 
More important, direct-to-consumer advertising can improve 
public health by starting a dialogue between patients and 
doctors that may lead to a better understanding and treatment 
of a patient's condition.
    I hope you will support patients and oppose those 
advocating adoption of a do not tell, do not ask policy, do not 
tell people about new medicines and hope they will not ask. 
That policy would be bad for the public health.
    I will be pleased to answer any questions you may have. 
Thank you very much.
    [The prepared statement of Dr. Glover follows:]

Prepared Statement of Gregory J. Glover , M.D., J.D., on behalf of The 
          Pharmaceutical Research and Manufacturers of America
    Mr. Chairman and Members of the Subcommittee:
    On behalf of the Pharmaceutical Research and Manufacturers of 
America, I am pleased to appear at this hearing this afternoon on 
direct-to-consumer (DTC) advertising of prescription medicines. I am a 
licensed physician and a practicing attorney with the law firm of Ropes 
& Gray, specializing in FDA regulatory issues and intellectual-property 
law. PhRMA represents the nation's leading researchbased pharmaceutical 
and biotechnology companies, which are leading the way in the search 
for new cures and treatments that will enable patients to live longer, 
healthier, and more productive lives.
    This year, PhRMA member companies will invest more than $30 billion 
to discover and develop new medicines. The mapping of the human genome 
has opened new frontiers, new paths to better health, pointing the way 
to treatments never dreamed possible. The industry is most encouraged 
about the prospects for exponentially better treatments--and, possibly, 
cures--for Alzheimer's, AIDS, arthritis, cancer, diabetes, heart 
disease, stroke, and many other diseases.
    Just a few weeks ago, for example, a breakthrough drug for leukemia 
was approved. This medicine, which blocks the biochemical switch that 
causes normal cells to turn cancerous, heralds a whole new era of very 
promising cancer research. The FDA is reviewing an application for a 
new, life-saving drug that reduced the risk of death from sepsis by a 
dramatic 20 percent in a study published in The New England Journal of 
Medicine. Sepsis kills more than 1,400 people every day and is the 
leading cause of death in non-coronary intensive-care units with an 
estimated treatment cost of $17 billion annually in the United States.
    Left sitting on the pharmacy shelf, medicines don't do anyone any 
good. Unless they are prescribed for patients, medicines cannot prolong 
life, ease pain, reduce disability, or make life better. And unless 
medicines are prescribed and used, they will not generate the funds 
needed for private industry to continue to research and develop future 
cures and treatments.
    That is why PhRMA enthusiastically supports DTC advertising of 
prescription medicines, which is regulated by the FDA, and opposes any 
further restrictions on this pro-patient, pro-health activity.
    Patients are seeking more information as they navigate the 
increasingly complex maze that is our health-care system. We believe 
more information is good. Medicines have been proven to be the most 
cost-effective form of health care and can often keep patients out of 
hospitals and nursing homes and help them avoid surgery and other, more 
expensive forms of care. For example, a 1998 study sponsored by the 
National Institutes of Health (NIH) found that treating stroke patients 
promptly with a clot-busting drug nets an average savings of $4,400 a 
year per patient by reducing the need for hospitalization, 
rehabilitation, and nursing-home care. According to NIH, use of this 
medicine could save the health-care system more than $100 million a 
year.
Background
    Over the course of history, the medical community has resisted DTC 
advertising of prescription medicines. Physicians wanted tight control 
over what information was conveyed to patients. In 1555, for example, 
the Royal College of Physicians in London decreed that ``no physician 
teach people about medicines or even tell them the names of 
medicines.'' The fear was that people would use medicines improperly 
and be harmed.
    That attitude persisted for more than 400 years. As recently as the 
mid-1980's, the FDA imposed a voluntary moratorium on DTC ads. After 
the moratorium was discontinued, many pharmaceutical companies began 
advertising their medicines directly to consumers, following FDA rules.
    In 1997, the FDA issued guidelines that clarified the agency's 
broadcast advertising requirements. No longer would the FDA require ads 
to contain voluminous and often confusing information about a drug's 
side effects in radio and television ads. Under the FDA's draft 
guidance, ads must list major health risks as well as side effects, and 
must set forth four ways for consumers to receive additional 
information: through an 800 number, an Internet site, reference to a 
print ad in a major national publication, and through their physician 
or pharmacist.
    The FDA's 1997 decision stemmed from a policy that had led to 
ineffective and confusing advertisements. Prior to the 1997 guidance, 
the FDA required that a brief summary of the prescribing information 
for a drug had to be included in all advertisements that both name a 
prescription drug and state its purpose, including broadcast ads. The 
brief summary is an FDA-approved document that advises physicians, in 
very technical language, how to properly use a drug. Because of 
technical, scientific wording in the brief summary, it is very 
difficult for patients and consumers without a medical background to 
understand.
    Prior to the 1997 guidance, pharmaceutical companies that wanted to 
include both the name of a drug and the condition it was intended to 
treat were forced to include the small print that constituted this 
complicated prescribing information. While feasible in newspapers and 
magazines, such ads were not possible for radio and television. This 
prompted companies to advertise on television in more oblique ways 
that, while meeting legal requirements, may not have been very helpful 
to patients. In such ads, either the name of a medicine or the name of 
the illness could be mentioned--but not both. Consumers were often left 
to guess what disease a medicine was intended to treat.
    This system was clearly unsatisfactory. As Dr. William Jacott, a 
trustee of the American Medical Association (AMA), said at the time: 
``The problem with the way the FDA currently regulates ads is that they 
discourage companies from providing information that may educate the 
consumer. The merest mention of symptoms and a drug requires that a 
company also include reams of information that most people won't read 
and many wouldn't understand anyway.''
    In announcing the clarifying guidance in August 1997, Michael 
Friedman, M.D., then FDA Lead Deputy Commissioner, said: ``Today's 
action can help promote greater consumer awareness of prescription 
drugs.'' And Robert Temple M.D., Associate Director for Medical Policy 
at the FDA's Drug Division, said that, under the new guidance, ads 
could inform consumers about new products about which they might not 
otherwise learn. As an example, he cited a new generation of 
antihistamines that don't cause drowsiness. ``You need to be told by 
someone that those products are out there or you'll never know,'' he 
said.
The Information Revolution in Health Care
    Under current practices, patients now are more actively involved in 
their own health destinies than ever before. The consumer movement and 
the information explosion have empowered patients to participate in 
decisions concerning their health care. Armed with information, 
patients have become active partners with health-care professionals in 
managing their own health care. And they are savvy consumers.
    Rather than remaining uninformed and relying entirely on an 
increasingly complex health-care system, patients are asking questions, 
evaluating information, and making choices. Direct-to-consumer 
advertising provides a valuable resource for patients to obtain 
information about specific diseases, conditions, and treatments, 
particularly in rural areas of the country where access to providers 
and health-care information may be difficult.
    Too often, many common yet serious conditions go untreated even 
though effective treatments are available. Affected individuals may not 
realize that they need treatment. Others who are aware of their 
symptoms may not know that treatment is available. Patients suffering 
from chronic conditions may be dissatisfied with their current 
treatment, but may be unaware that different options are available with 
fewer side effects or an easier dosing regimen.
    Advertising, however, is only one source of user-friendly 
information that consumers have at their disposal. Some 50 consumer 
magazines focusing on health care reach the news stands every month. 
Just about every television station in the country has an on-screen 
physician.
    The Physician's Desk Reference, or PDR, once confined to doctors' 
offices, is now available in a consumer edition at pharmacy counters. 
Internet users can surf tens of thousands of sites dedicated to health-
care topics. In fact, according to health-care consultant Lyn Siegel, 
about 25 percent of online information is related to health care and 
more than half of the adults who go on the web use it for health 
information. So, while DTC advertising is an important source of 
information for consumers, it is clearly not their only source. But DTC 
advertising is the most accurate because it is regulated by the FDA.
    DTC advertising helps to meet the increased demands of consumers 
for information about diseases and treatments. Most important, DTC 
advertising can improve public health. It is intended to start a 
dialogue between patients and doctors. Often, this dialogue will not 
result in a doctor prescribing the drug mentioned by a patient. But it 
will prompt a discussion that may lead to better understanding and 
treatment of a patient's condition. It should be emphasized, however, 
that physicians ultimately decide whether therapy is needed, and, if 
so, which therapy is most appropriate for a particular patient.
Underdiagnosis and Undertreatment
    Pharmaceutical advertisements raise awareness of conditions and 
diseases that often go undiagnosed and untreated. For example, the 
American Diabetes Association estimates that six million Americans have 
diabetes but don't know it. One third of the people with major 
depression seek no treatment and millions of Americans are unaware that 
they have high blood pressure. By informing people about the symptoms 
of such diseases and the availability of effective, noninvasive 
treatments, DTC advertising can improve public health.
    There are encouraging signs that this is happening. Following are 
just a few examples:

   A survey by Prevention Magazine found that, as a result of 
        DTC advertising, an estimated 24.7 million Americans talked to 
        their doctors about a medical condition they had never 
        discussed with a physician before. In other words, millions of 
        people who had previously suffered in silence were encouraged 
        to seek help.

   A 1999 survey by the FDA found that 27 percent of 
        respondents asked their doctors about a condition they had not 
        discussed before. Conditions ranged from diabetes and heart 
        disease to arthritis, depression, and other undertreated 
        conditions.

   In the two years that ads for a medicine for erectile 
        dysfunction have appeared, millions of men have visited their 
        doctors to request a prescription for the drug. For every 
        million men who asked for the medicine, it was discovered that 
        an estimated 30,000 had untreated diabetes; 140,000 had 
        untreated high blood pressure, and 50,000 had untreated heart 
        disease. These numbers are striking--and they're just for one 
        drug.

   A study by IMS Health, a health-care information company, 
        found that, in the one year after an advertising campaign for 
        an osteoporosis drug began, physician visits by women concerned 
        about this disease doubled.

   According to a survey by Scott-Levin, a consulting firm, the 
        number of patients visiting their physicians for treatment of 
        depression has increased from about 17 million in 1996, before 
        treatments for depression were widely advertised to consumers, 
        to more than 20 million last year.

   Some 19 million Americans have moderate to severe disability 
        from migraines, and 11 million of them are untreated or are 
        treated sub-optimally. Migraine sufferers miss more than 157 
        million workdays a year and cost U.S. employers as much as $17 
        billion annually in decreased productivity. The good news is 
        that, since migraine medicines began to be advertised to 
        consumers, the number of people who visited their physicians 
        for treatment rose from about 6,200,000 in 1996 to about 
        7,100,000 last year, according to a study by Scott-Levin.

   Many health-care organizations reported an increase in 
        requests for information since DTC advertising restrictions 
        were eased in 1997. For example, the American Foundation for 
        Urological Disease experienced a 30-40 percent increase in 
        requests for information.

Spillover Benefits
    According to a recent analysis of consumer surveys by John E. 
Calfee, Ph.D., of the American Enterprise Institute, DTC advertising 
also provides important ``spillover'' benefits to patients, which have 
nothing to do with the specific products advertised.
    One such benefit is an increased awareness that virtually all 
prescription medicines have risks and side effects. In addition, 
physicians, when discussing conditions highlighted in advertising such 
as obesity and high cholesterol, are able to suggest lifestyle changes 
to their patients. And DTC advertising also improves compliance--it 
prompts patients actually to take their prescribed medicines. In 
response to a Prevention survey question, 31 percent of the respondents 
said that ads made them ``more likely'' to take their medicines 
regularly, compared to only 2 percent who said they were ``less 
likely'' to do so.
    According to Express Scripts Senior Director of Outcomes Research, 
Brenda Motheral, Ph.D., who was quoted in the Pink Sheet on March 5, 
2001: ``People are sticking with their chronic medications in higher 
proportions than what we've seen in the past . . . Probably a big 
driver of that, based on some work that our group has done, is direct-
to-consumer advertising.''
The Views of Consumers, Physicians, and Regulators
    A growing body of evidence suggests that consumers like DTC 
advertising. A 1999 survey by the FDA found that those who liked these 
ads outnumbered those who did not by nearly 2 to 1. Eighty-six percent 
said the ads ``help make me aware of new drugs,'' and 62 percent said 
the ads helped them have better discussions with their physician about 
their health. A survey by Prevention Magazine found that 76 percent of 
respondents thought the ads ``help people be more involved in their 
health care'' and 72 percent felt the ads ``educate people about the 
risks and benefits of prescription medicines.''
    The best way to understand how patients feel about DTC advertising 
is simply to listen to them. Following are comments from patients 
written to PhRMA companies:
    A patient with herpes wrote: ``For many years people have suffered 
in silence and shame. Making it known that this product is available 
helps those in need. Putting advertisements in magazines and television 
was a wonderful idea.''
    A patient with chronic obstructive pulmonary disease (COPD) stated: 
``You have a commercial on TV that mentions COPD and educates the 
public--in about 30 seconds--as to the prevalence of the disease. I 
firmly believe more public education is not just useful but necessary 
as the number of people with COPD increases. So I want to thank you for 
raising public awareness of this dreadful disease, and also I want to 
say thanks for helping to keep me alive these past ten wonderful 
years.''
    Finally, a patient with asthma wrote: ``My concern is the fact that 
this product is not being advertised enough. I have cut back my asthma 
episodes by 80-90 percent. I have had asthma since I was 3 years old 
and am now 51. Please get the word out about how well this product 
works.''
    There also is growing acceptance of DTC advertising by doctors. 
Historically, physician organizations, as well as individual 
physicians, have expressed concerns about DTC advertising. However, a 
2000 survey by Louis Harris Interactives and the Harvard University 
School of Public Health found that 64 percent of doctors believe that 
DTC advertising of prescription drugs helped ``educate and inform'' 
their patients, and 40 percent of the doctors surveyed believe the ads 
increased patient compliance.
    A 1999 survey by the FDA showed that, when patients asked 
physicians about an advertised medicine, 81 percent of patients said 
the doctor welcomed the question. Only 4 percent said their physicians 
appeared angry or upset when asked about a medicine. According to 
Prevention, only 26 percent of patients who talked to their physicians 
about an advertised medicine actually asked for a prescription, while 
72 percent asked for more information.
    The AMA continues its support of accurate pharmaceutical 
advertising as ``appropriate and legal,'' according to a letter by Dr. 
Richard Johnson in the July 6 issue of the Bergen Record. Writing to 
clarify recent reports about AMA's policy on DTC advertising, Dr. 
Johnson, who heads the Association's relevant Reference Committee, 
stated that the Committee provided language to the AMA House of 
Delegates ``from numerous physicians who testified that DTC ads are 
valuable because they sometimes educate consumers about health 
conditions and possible treatments that inform consumers better. 
Testimony also indicated that drug ads may encourage some patients to 
seek out their physicians and have more knowledgeable discussions about 
their health conditions and, if applicable, treatment options.''
    The FDA, reaffirming in August 1999 its policy of permitting DTC 
advertising, stated: ``FDA is unaware of any data supporting the 
assertion that the public health or animal health is being harmed, or 
is likely to be harmed, by the Agency's actions in facilitating 
consumer-directed broadcast advertising.''
Increased Drug Utilization: a Positive Development
    Critics of DTC advertising claim that it drives up pharmaceutical 
expenditures. While total pharmaceutical expenditures are rising 
because there is a growing realization of the value of prescription 
medicines, drug expenditures still make up less than 10 cents of every 
health-care dollar.
    The fact that more patients are getting more and better medicines 
is good news--for patients, for the health-care system, and for 
society. Just a few weeks ago, the federal government published new 
cholesterol standards in an urgent attempt to encourage people to 
reduce their risk of heart attacks. The National Institutes of Health 
recommended that millions more Americans should take cholesterol-
lowering drugs, which would nearly triple the number of adults using 
these drugs. Dr. Claude Lenfant, director of the Heart Institute, said 
that adherence to these guidelines could mean that heart disease would 
no longer be the top killer of Americans.
    Following are a few more examples of the cost-effectiveness of 
medicines, using drugs that have been the subject of DTC advertising:

   A cholesterol-lowering drug was found to reduce hospital 
        admissions by a third during five years of treatment, according 
        to a study by University of Pennsylvania researchers. In 
        addition, patients who were admitted to hospitals had shorter 
        stays and were less likely to need bypass surgery or 
        angioplasty. Said Dr. Sanford Schwartz, a physician and 
        economist at the University of Pennsylvania: ``This is both 
        good medicine and good economics.''

   A study published in The Journal of the American Medical 
        Association showed that treating Type 2 diabetes with a 
        medicine to improve glycemic control improved the quality of 
        life for patients and helped keep them out of the hospital and 
        on the job.

   A study published in Health Economics found that medical 
        costs declined by $822 per employee per year and absenteeism 
        dropped by nine days when depressed workers were treated with 
        prescription medicines. Savings from improved productivity and 
        the reduction in work loss and medical costs far outweighed the 
        cost of the treatment.

Advertising Promotes Competition
    People often confuse total drug expenditures, which are going up 
for the public-health reasons just outlined, and drug-price increases, 
which have been in line with inflation in recent years. According to 
IMS Health, total drug expenditures rose 14.7 percent in 2000. Of that 
figure, only 3.9 percent represented price increases. The remaining 
10.8 percent reflects utilization--the fact that more patients are 
using newer and more effective medicines.
    The increased use of prescription drugs is a healthy trend. Drugs 
not only save lives--they save money in many cases by reducing the need 
for alternative, more expensive care such as hospitalization, 
confinement in a nursing home, and surgery. Still, only 8.2 percent of 
every health-care dollar is spent on prescription medicines, compared 
to 32 percent on hospital care and 22 percent on physician and clinical 
services.
    Historically, advertising has promoted competition and increased 
volume of sales. If anything, this tends to lead to lower--not higher--
prices.
Conclusion
    In summary, DTC advertising helps to meet the increased demands of 
consumers for information about diseases and treatments. More 
important, however, DTC advertising can improve public health. It is 
intended to start a dialogue between patients and doctors that may lead 
to a better understanding and treatment of a patient's condition.
    Mr. Chairman and Members of the Subcommittee, I hope that you will 
support patients and oppose those who advocate adoption of a ``don't 
tell, don't ask'' public-health policy: don't tell people about new 
medicines--and hope they won't ask. That policy would be detrimental to 
public health.
    Instead, I hope you will stand behind the patients' right to know 
about new medicines, to seek information from a variety of sources, 
including DTC advertising, and to work with their physicians to help 
themselves to better health. Ultimately, a physician determines the 
appropriate medical treatment and may or may not prescribe a medication 
that may or may not have been advertised and mentioned by a patient.
    Thank you very much. I would be happy to answer any questions.

    Senator Dorgan. Dr. Glover, thank you very much.
    Let me ask a question or so of Mr. Calfee, and if Senator 
Wyden has a question for Mr. Calfee, and then we will allow him 
to catch his airplane.
    Mr. Calfee, you indicated that advertising makes markets 
work better, something that I agree with. Are there peculiar or 
unusual different circumstances with respect to advertising of 
prescription drugs? Others on the panel have talked about the 
need for regulation in this area of advertising. Do you believe 
that in this area of advertising regulation is necessary? We 
obviously now have some regulation. Some are calling for more.
    Mr. Calfee. We have a lot of regulation. I would say the 
prescription drug advertising is regulated more stringently 
than advertising for any other products available in this 
country. The FDA is unique, I think, among agencies in the 
stringency with which it regulates advertising. Maybe the SEC 
is somewhat equivalent with securities ads, but for ordinary 
products, for products that people buy, FDA advertising is far 
stricter than it is for any other products.
    But in addition, the big difference, of course, is that you 
need a prescription. Two colleagues of mine and I recently did 
a study of advertising for the statin drugs, Lipitor, Zocor, et 
cetera, and we gathered proprietary data to look and see what 
happens in this market when DTC advertising goes up and down, 
and it does go up and down very rapidly. We could not find any 
connection between the gyrations in the advertising and changes 
in the prescriptions of these drugs.
    As far as we can tell, the reason for that is that an ad 
may get you to talk to your doctor about a drug, but once the 
drug comes up, once you are talking to your doctor, the 
doctor's influence appears to be overwhelming over other 
considerations. In the case of statin drugs, if you talk to 
your doctor about a drug, the doctor probably will tell you: 
Well, how much do you weigh, what is your diet, and things like 
that, do you ever exercise, check your cholesterol, and then 
probably put you through to some advice for some lifestyle 
changes, and it is pretty far down the road before you may or 
may not get a prescription, and then the prescription will be 
whatever the doctor thinks you need, if anything.
    Senator Dorgan. Mr. Calfee, that conclusion seems to be at 
odds with the conclusion that Ms. Chockley talked about, saying 
that the most heavily advertised drugs in 2000 had an aggregate 
sales increase of 32 percent compared to 14 percent increase 
for all other drugs. One would expect that, A, advertising 
works and, if it works, those drugs that are the most heavily 
advertised would have the highest increase in growth in sales. 
That is exactly what Ms. Chockley was testifying to.
    You seem to suggest that is not the case.
    Mr. Calfee. Yes. I have looked at a lot of advertising 
research over the years and it turns out that if you look at a 
market you often see that advertising follows roughly the same 
pattern as sales, but if you look very closely at the data 
often what you find is something that Nancy Ostrove of the FDA 
mentioned, which is that manufacturers tend to advertise 
products that are doing well. In other words, they have found 
that if a product is really doing well, then they may get more 
payoff from the advertising, at least for their particular 
brand, because after all what they are really advertising is 
their brand, not the entire product category.
    So often what you find is that advertising tends to follow 
sales rather than leading the sales, and whether advertising 
actually increases those sales is often a very iffy question. 
It is very difficult to determine, and sometimes the 
advertising does do something for the brands, but does not do 
it for the whole product category.
    Senator Dorgan. Mr. Calfee, you are describing something 
that is foreign to my experience of study as an MBA student, 
that advertising follows sales performance. That would rewrite 
the book on marketing as I knew it.
    Mr. Calfee. You will find some books that you would not be 
able to rewrite.
    Senator Dorgan. Maybe I did not read them.
    Senator Wyden.
    Senator Wyden. Just one if I could, Mr. Calfee, on this 
question of the ramifications for generics, because this is--we 
all acknowledge that there is virtually no studies at this 
point, there is no analysis, and clearly more needs to be done. 
But it seems to me that we do know that direct-to-consumer 
advertising is increasing the volume of these drugs, these 
brand name drugs.
    You develop the affinity with your physician and the use of 
that drug, and it just seems to me again conceptually that it 
is likely that you will be using generics at some point.
    Do you disagree with that?
    Mr. Calfee. To the general principle that advertisement on 
the whole on average tends to increase sales of a product, I do 
not have any objection to that as a general principle. It turns 
out that the effect is usually much less than what people think 
it is.
    Now, in the particular case of branded versus generics, I 
guess the real question is whether or not advertising somehow 
heads off a switch to generic drugs when generics become 
available. There may be some effect in that direction. We do 
not really know for sure. What we do know, of course, is that 
when generics appear market shares shift very rapidly and 
prices tend to drop very rapidly. So generics do quite well 
when they get in the market.
    Senator Wyden. Well, we are going to explore this. I heard 
Dr. Glover say are we getting into a do not ask, do not tell 
kind of relationship. I am for asking, I am for telling, but I 
am also for looking at carefully some of the ramifications here 
that have not been looked at. I think that is what troubles 
Senator Dorgan and I.
    I will have some more questions in a moment. I know you 
have to get a plane.
    Senator Dorgan. Mr. Calfee, thank you for joining us today 
and you are excused.
    Let me ask a couple of questions of the others. Dr. Wolfe, 
you in your testimony described part of what I was asking our 
first witness about, Dr. Ostrove. That is the issue of 
enforcement and enforcement of regulations specifically. You 
indicated that you felt the FDA has had a reduced level of 
enforcement even ad advertising has increased?
    Dr. Wolfe. According to their own data, there is almost a 
50 percent decrease in the last 3 years in enforcement actions. 
As Dr. Ostrove said, that is a combination of both direct-to-
consumer and prescription, but I believe, contrary to what she 
said, that there has been as much of a falloff, particularly in 
the last year or so, in direct-to-consumer enforcement 
activities.
    I would be interested in seeing the data, but the point is 
that the people there that she described, the approximately 13 
or 14, are not much more than there were before there was no 
direct-to-consumer advertising or virtually none in the early 
nineties. It is nowhere near enough. The number of venues--
television, radio, print, and so forth--have just outstripped--
and whereas we ourselves strongly believe, have published a 
number of books, some best-selling books on getting accurate 
information to patients, they do not have drug ads in them and 
they do not have a biased viewpoint. They have a review of 
published studies and experts in every field.
    When you start getting into the conflict of interest of 
putting out ``information'' that is really primarily intended 
to sell drugs, not primarily intended to educate, it needs 
serious policing. The FDA is an agency in the public health 
service. It is not doing an adequate job policing. I am told 
they are interviewing some people now for some more positions. 
We have made requests to the FDA commissioners for 10 or 15 
years to ask for more than the number of positions they have in 
this important part of the FDA.
    Again to repeat what Dr. Kessler had said long ago and what 
I agree with, everyone thinks about the drug approval process 
as one which, if it goes wrong, a drug that is unduly safe will 
get on the market and someone will die. People do not think as 
much as they should about the advertising policing process, 
because if people write a prescription, a doctor writes a 
prescription based on his or her own advertising input to 
patients, and it turns out that they could have written a 
prescription for a safer drug, for a less expensive drug, the 
patient does not do well.
    This has to be policed much more than it has. Whereas the 
number and amount of money being spent on direct-to-consumer 
advertising has skyrocketed up, the other kinds of advertising 
have also increased, not as dramatically, but the overall, as 
mentioned, is close to $16 billion a year. It is an enormous 
amount of money and the amount of money in FDA's budget to do 
surveillance over it is inadequate. We need better policing. 
Otherwise whatever is being done which is selling drugs is 
being done on a sort of hucksterism kind of basis to the extent 
that the ads are misleading.
    Senator Dorgan. Dr. Glover, if in the last year there was a 
19 percent increase in the cost of prescription drugs, 
substantially because of increased utilization, some as a 
result of price inflation, and if one believes that advertising 
works and therefore, if advertising works, that has in part 
contributed to that 19 percent increase--you may disagree with 
that pretext--but if that is the experience, what do you expect 
will happen on behalf of PhRMA with respect to the cost of 
prescription drugs next year, the year after, the year after 
that?
    We have seen three very healthy double-digit years of cost 
increases. Where is this heading?
    Dr. Glover. Assuming that your facts are correct, first 
off, we believe this is a difference between the price of 
pharmaceuticals, which has remained in line with inflation, and 
the cost of pharmaceuticals. The cost of pharmaceuticals is 
driven both by price and by volume. In a society where you are 
shifting your health care dollars from more expensive forms of 
care, such as physician services and hospital stays, to the 
pharmaceutical industry, it is a good thing and it is in the 
public health and it is pro-consumer to have more of those 
dollars go to prescription pharmaceuticals that keep people on 
their jobs, in their communities, and out of hospitals and 
consuming much more expensive care.
    Therefore, while I cannot predict where the number is 
likely to go in the future, we should applaud the possibility 
that we will have newer and better medicines that people will 
want to use, that physicians will want to use, in lieu of 
putting people in hospitals and sending them to physicians at a 
much higher cost overall to society.
    Dr. Wolfe. I just want to I think correct the record. PhRMA 
has repeatedly stated that the price increase--now we are 
talking about price, not the volume, but the price increase--of 
prescription drugs is in line with the consumer price index. I 
have heard this over and over again. I looked at the data on 
the consumer price index. From 1991 to 2000, a 10-year period, 
the consumer price index for prescription drugs went up 1.7 
times more than the consumer price index for all items, and in 
the last 5 years it sent up almost 3 times more.
    So this statement that this overall expenditure is largely 
due to things other than price and that price is in line, to me 
a 1.7-fold increase above the consumer price index in 10 years 
and almost 3 times is not exactly in line. It is out of line. 
It is not the only reason why we are paying more for drugs, but 
it is an important reason.
    Ms. Chockley. The 19 percent number is ours. It is from 
NIHCM, and so I can tell you how it breaks down actually. 
Between 1999 and 2000 retail prescription drug spending went up 
by $20.8 billion. What we have found is 42 percent of it was 
due to, the increase in prescription drug spending, was because 
of the increase in prescriptions, so 42 percent. 36 percent was 
due to a shift from less expensive drugs to more expensive 
drugs, and 22 percent was because of just pure inflation.
    Senator Dorgan. Dr. Glover, do you wish to respond, and 
then I will call on Senator Wyden.
    Dr. Glover. Certainly, in two respects. First off, the 
NIHCM number of 19 percent is the percent that includes costs 
other than the costs that are charged by the pharmaceutical 
companies. It includes costs that are added on by retail 
pharmacies to the costs that go to consumers.
    Second, with respect to Dr. Wolfe's comments about the 
inflation rate, it is not clear until we look at the numbers 
whether 1.7 percent is substantially out of line.
    Dr. Wolfe. 1.7 times, not percent. 1.7 times larger than 
the consumer price index.
    Dr. Glover. Dr. Wolfe, given that the consumer price index 
inflation rate has been very small for the last 10 years, 1.7 
times does not indicate the severity of any disparity that you 
want to show.
    So at any rate, our position, we maintain what I said as 
being accurate, that we did not say that it was the same as or 
lower than the CPI. We said it was in line with the CPI. It is 
not twice the CPI, it is not ten times the CPI. We still stand 
by our position that the majority of the price increase is due 
to increased utilization, which is something that is good.
    Senator Dorgan. Senator Wyden.
    Senator Wyden. I will get us back to the more mundane 
subject of direct-to-consumer advertising. Dr. Glover, 
economics 101 suggests to me that the drugs that are going to 
be advertised are the ones that are going to be money-makers. 
It is just plain and simple. It is a marketplace economy. Those 
are going to be the ones that get advertised. So drugs that 
many people are going to need, but are ones that there is not 
significant profit in, are not going to get the same kind of 
attention in direct-to-consumer advertising.
    So I wonder if what you are really talking about is an ask 
and tell policy, but only with respect to drugs where you can 
make a significant profit. That would concern me as well in 
terms of the ramifications for our society. How would you 
respond to that?
    Dr. Glover. In the scheme of drugs that are patent 
protected, I do not know what the difference is between the 
advertising for those products that are more profitable than 
others. Your earlier question suggested that you were drawing a 
distinction between patent protected pioneer drugs and generic 
drugs. Pharmaceutical companies----
    Senator Wyden. I am not asking about that now. I am just 
talking about economics 101. You advertise where you are going 
to make money, and there are a lot of drugs folks need where 
you are not going to make a lot of money. So it seems to me 
that your asking and telling policy, which I happen to think 
makes a lot of sense, I think that is in the interest of 
empowering consumers, really is not one that applies across the 
board, but it is an ask and tell policy that relates only to 
drugs where there is a significant profit to be made.
    Dr. Glover. Well, clearly, Senator, it only makes 
commercial and economic sense for companies to advertise 
products that they are most interested in selling. But you 
cannot suggest that we are advertising profitable products in 
lieu of advertising unprofitable products that could be equally 
substituted for the same condition.
    As FDA has indicated and as the pharmaceutical industry 
will tell you, the products that get most of the attention are 
products that are true innovations, that are having a 
substantial impact on patient care. Those products are often 
the same products that patients most need because what was 
previously available was insufficient.
    Senator Wyden. I am just dying to have somebody in American 
enterprise show me where they are advertising unprofitable 
products.
    Dr. Glover. I do not think any industry intentionally 
advertises unprofitable products, Senator.
    Senator Wyden. I thought that is what you just said, that 
there is no evidence of whether you are advertising profitable 
products or unprofitable.
    Dr. Glover. No, what I said, Senator, is that it is 
unlikely to be the case that anyone is advertising a profitable 
product for which there is an alternative that is less 
profitable. These are drugs where there usually is no 
alternative.
    Senator Wyden. I just think that the policy of asking and 
telling, which I support, ought to extend across the board, and 
I do not get the evidence that that is the case. If there is 
any information that you could supply us for the record that 
would indicate that it is applying to a variety of these other 
products where there are not significant profits to be made, I 
would very much like to see it, and Senator Dorgan has made it 
clear he is going to hold the record open.
    One other question----
    Dr. Glover. You should not expect that that information 
exists, Senator.
    Senator Wyden. Right. But you made the claim.
    Dr. Glover. I made the claim.
    Senator Wyden. That is why I was interested in it.
    Dr. Glover. I made the claim that in every industry no one 
intentionally advertises unprofitable products. You should not 
expect this industry to be any different. I also made the claim 
that the products that get advertised are the pharmaceutical 
innovations. For those products there is no unprofitable 
alternative.
    Finally, as with every other industry, we do not force 
people to advertise things that are not in their commercial 
best interest.
    Senator Wyden. Ms. Chockley, if I might, you called for an 
independent source to try to make sure that people got accurate 
drug information. That operation is going to be a busy one. 
Suffice it to say they would have to handle information that 
goes out over the Internet and information that is available 
from a variety of sources.
    Who do you think should be the independent source in this 
country for monitoring the drug information that gets out?
    Ms. Chockley. I think it has to include all stakeholders, 
so it should include the pharmaceutical industry, it should 
include the government, it should include doctors, most 
importantly. But I think that we are going to continue to see 
this trend increasing and the growth in pharmaceuticals I think 
everyone is predicting is going to continue at this high rate.
    I think it behooves us all to have an independent source of 
information, both for consumers and for physicians.
    Senator Wyden. So who sets this up? I am not clear. You 
want all these various people to sit around----
    Ms. Chockley. And therefore make it unworkable?
    Senator Wyden. I thought it was an interesting concept. I 
was curious how it would work.
    Ms. Chockley. Well, I think that that is the direction that 
we should move, then, is that there are a couple of--Rinehart 
and some other researchers are talking about trying to come up 
with more of an independent group that brings together the 
different stakeholders.
    What is very interesting and kind of gets to a couple of 
the comments that you made is in the study where we showed that 
prescription drug spending went up by 19 percent, if you 
remember I said there were over 9,800 drugs. Half of the 
increase was in 23 drugs, half the increase. So we could do a 
lot by just looking at a few number of drugs in terms of 
looking at how effective they are and when it is appropriate, 
etcetera, to use them.
    Senator Wyden. I will tell you, I think the industry has a 
valid point when they say there are a lot of reasons why the 
cost of drugs are going up.
    Ms. Chockley. Sure.
    Senator Wyden. There are a whole host of them, and we do 
need to study the implications here. There is not anybody on 
the planet today, if they were redesigning Medicare, would not 
include a pharmaceutical benefit. I had a physician in 
Washington County at home who put a senior citizen in the 
hospital not long ago for 6 weeks because the person could not 
afford an outpatient benefit. So of course pharmaceutical 
spending went up in that kind of instance. But that was the 
government's fault, that was not the fault of anybody in the 
prescription drug industry.
    But what I think Senator Dorgan has raised today are a 
variety of issues that we ought to be looking at. We ought to 
be looking at the implications on generic drugs. I have made it 
clear we ought to be concerned about that. We ought to be 
looking at the question of the doctor-patient relationship. We 
ought to be looking at the area Dr. Wolfe has talked about, 
ramifications for coupons and these programs that draw people 
in and once they have got them there is an affinity there. I 
think I made it clear to Dr. Glover that, while I support his 
ask and tell policy, I want it extended across the board in our 
society, and I am concerned about the ramifications that it may 
apply only to these profitable drugs.
    So all of you have given excellent testimony and I wish I 
could spend the day with Senator Dorgan because he is doing 
important work. But thank you for this time.
    Senator Dorgan. Senator Wyden, thank you very much.
    Let me just mention--let me ask a brief question, Dr. 
Glover, and Dr. Wolfe wanted to comment, then I want to go to 
the next panel. Dr. Glover, in response to questions posed by 
Senator Wyden, he was asking I think a very specific 
interesting question, and I think your answer was, 
understandably, that the drug companies advertise where it is 
profitable and in their interest to do so.
    But then it seems to me what Senator Wyden was getting at 
is if advertising direct-to-consumer is a public service and if 
it is done only in circumstances where it is profitable to do 
so for the industry, then it becomes only a public service to 
the extent that it profits the industry with respect to those 
specific drugs. Is that not the case?
    Dr. Glover. That is clearly going to be--it clearly is 
going to be the case that we will advertise where it seems to 
be in our commercial best interest. We believe, however, and I 
believe that other panelists will confirm this, that there are 
spillover effects from our advertising for the drugs that we 
want to, namely that we raise consumer awareness about certain 
conditions for which there are treatments that were not 
previously available; and second, what we think is more 
important is that it stimulates a conversation with the doctor. 
Where these patients go in, they do not always get the drug 
that we have been advertising. They are often told they need to 
change their health care, their lifestyle. Sometimes they are 
given an over-the-counter drug and sometimes they are given 
another prescription drug.
    So while clearly we are going to advertise where we think 
it is in our best interest, we believe there are going to be 
spilloff effects there.
    Senator Dorgan. Let me say that I think there are benefits 
to direct-to-consumer advertising and I think there are risks. 
I agree with Dr. Wolfe's opening statement that it is not the 
case where I think the clock will be turned back on this issue, 
but the risk questions I think in addition to the benefit 
issues pose some very interested challenges for us.
    Dr. Wolfe, you wanted to make a comment.
    Dr. Wolfe. Just a comment on the now absent Senator Wyden's 
question. One category of drugs where it is quite clear that 
the drugs with the best record in terms of preventing death 
from heart attack and stroke are the least advertised and the 
most advertised are the ones that do not have as much evidence, 
and that is for hypertension. Calcium channel blockers, which 
do lower blood pressure but do not have anywhere near the 
evidence of preventing stroke and heart attack that beta 
blockers and diuretics do, are much more advertised and have 
actually surpassed them in the number of prescriptions.
    One can say why is it not that the companies that sell beta 
blockers and diuretics, many of which are generically 
available, to repeat that point, why do they not advertise? 
Well, some of them are just small generic companies that mainly 
cannot keep up with the brand name companies. But even some of 
them who are brand name companies do not want to advertise 
because they can make more money off of the much more expensive 
and, at least as the evidence is right now, less effective 
calcium channel blockers.
    I think that is a good example where the advertising is not 
limited just to the breakthrough drug that is much better than 
anything else on the market.
    Senator Dorgan. Dr. Wolfe, thank you very much. This panel 
has been very helpful and I thank you for your testimony.
    I am going to call on the next panel, and as I do I want to 
recognize our ranking member, Senator Fitzgerald from Illinois. 
Next we are to hear from John Gilensky, Executive Director of 
RxHealth Value, Dr. Michael Shaw, Executive Director of 
EthicAd', and Dr. Richard Dolinar, an 
endocrinologist from Phoenix, Arizona.
    Let me welcome our ranking member, who has been on the 
floor of the Senate and is just now joining us, Senator 
Fitzgerald.

            STATEMENT OF HON. PETER G. FITZGERALD, 
                   U.S. SENATOR FROM ILLINOIS

    Senator Fitzgerald. Thank you, Senator Dorgan. I appreciate 
your holding this hearing and I am sorry that it conflicted 
with a floor speech I had to give about the problems at the 
O'Hare Airport in Chicago, which I am sure you have experienced 
at one time or another.
    I think this is an important topic. I come to this debate 
with a fairly open mind. I have not previously taken a position 
on this issue. I come from a family where hardly anybody ever 
used prescription drugs. To this day, I think the only thing 
that my parents, who are in their seventies, have in their 
medicine chest is aspirin. My parents were always cautious 
about taking any kind of prescription medicine, and that is the 
kind of orientation I have had in my own life with my own 
family, too.
    I do believe that consumers benefit by having as much 
information available to them as possible. I am concerned, 
however, that direct-to-consumer advertising has in its initial 
years stimulated more usage of prescription drugs than perhaps 
would be optimal. I think that consumers will have to over time 
develop a healthy skepticism about those kind of ads. They may 
not have had that same kind of skepticism with respect to 
prescription drug advertising a few years ago because we did 
not have those kind of ads before then.
    I know my nine-year-old child, when he was a few years 
younger, every time he saw an ad for a toy or for a cereal he 
would tell me we had to get it, that that cereal is the best 
cereal. I would say, how do you know that, and he would parrot 
a television ad that he had seen. Now as he has gotten older, 
he has realized that all those advertisements have to be taken 
with a degree of skepticism.
    Just as he has learned that, I think consumers probably 
have to develop a healthy degree of skepticism with respect to 
prescription drug advertisements. But I am not sure that I 
would ever want to go so far as saying that we should prohibit 
or ban companies from making those advertisements. But really I 
come to this with a pretty open mind, and I want to compliment 
Senator Dorgan for his interest in the area and for convening 
this hearing.
    With that, I welcome panel two.
    Senator Dorgan. Senator Fitzgerald, thank you very much.
    We have Mr. Mark--is it ``CLO-tier''?
    Mr. Cloutier. Correct.
    Senator Dorgan. Mark Cloutier--let me amend my earlier 
announcement--Executive Director of RxHealth Value; Dr. Michael 
Shaw and Dr. Richard Dolinar. Mr. Cloutier, why do you not 
proceed.

  STATEMENT OF MARK CLOUTIER, POLICY DIRECTOR, RxHEALTH VALUE

    Mr. Cloutier. Thank you, Mr. Chairman. Senator Dorgan, 
Members of the Committee: I am Mark Cloutier, Policy Director 
of RxHealth Value, which is a national coalition of consumer 
groups, labor unions, provider groups, business groups, and 
employers, insurers and health plans, pharmacy benefit 
management organizations, and academic researchers who are 
committed to improving Americans' access to health-improving 
prescription drugs.
    As you can understand, a deliberative body comprised of 
nearly 30 organizations will rarely arrive at a full consensus 
regarding any issue. Remarkably, our membership has achieved 
consensus regarding the recommendations I am offering regarding 
direct-to-consumer advertising of prescription drugs to 
consumers and patients. We believe safety is at stake. I 
believe the fact of these consensus recommendations indicates 
the fundamental importance of this issue for the members of 
RxHealth Value.
    It is our belief that this form of advertising affects the 
health and safety of American patients and consumers. The 
tremendous increase in the extent of direct-to-consumer 
advertising of prescription drugs since the FDA removed the 
requirement for brief summary of risk information in 1997 is 
well documented. It is almost impossible to open a general news 
magazine, view prime time television, or listen to the radio 
and not see or hear advertising for prescription drugs.
    Given that the prescribing physician is the decisionmaker 
regarding the use of these medications, it is all the more 
startling that so many resources are expended by drug 
manufacturers to affect the attitudes of consumers and 
patients. Although there is little evidence, as we heard from 
Dr. Ostrove, currently available regarding whether consumer and 
patient attitudes affect physician choice in prescribing, no 
stakeholders in the health system and healthy economy have 
suggested that the impact of such advertising is insubstantial.
    Given the FDA's expressed interest in assessing the effects 
of direct-to-consumer advertising, we expect more direct 
evidence of impact will be available in the near-term future. 
While we await the results of planned and pending studies on 
the effects of advertising on the attitudes, behaviors, and 
medical outcomes of consumers and patients, RxHealth Value 
members are concerned that risk information in particular is 
not adequately or effectively conveyed in direct-to-consumer 
advertising.
    One of our member organizations, AARP, recently conducted a 
survey of members to assess the impact of direct-to-consumer 
advertising, finding that the majority of those surveyed could 
not recall ever seeing risk information in the ads. As you went 
up in age cohorts, there was even less recall of risk 
information. This poses a serious safety risk to consumers and 
patients.
    In our first public recommendation to the FDA presented 1 
year ago at the National Press Club, RxHealth Value emphasized 
the fundamental importance of protecting safety of patients and 
consumers who are confronted by DTC advertising. Thus, RxHealth 
Value recommends that the Congress direct the FDA to convene a 
task force of key stakeholders, including the pharmaceutical 
manufacturers who advertise prescription drugs, as well as 
consumer groups, patient organizations, provider groups, payers 
and relevant experts, to develop and test standards for 
information disclosure in direct-to-consumer advertising, to 
more carefully define the concrete meaning of fair balance in 
disclosing benefits and risks of advertised medications, to 
include disclosure of other appropriate therapies in addition 
to alternative medications.
    As you may know, the AMA approximately a month ago passed a 
resolution calling on language ``Your doctor may recommend 
other treatment options that may be equally or more 
effective.'' We want to support that resolution.
    To further define ``fair balance'' to mean that full 
disclosure of risks and side effects be given equal print and 
air time as the description of benefits in the same 
communication.
    RxHealth Value recommends that the appropriate agencies of 
the Federal Government conduct ongoing research to evaluate the 
effect of direct-to-consumer advertising on the health of 
American consumers and patients. It is a given that many 
Americans appreciate the increased awareness of diseases and 
conditions and potential therapies which direct-to-consumer 
advertising makes possible. It is also true that such 
advertising can obscure potential hazards of the pharmaceutical 
advertised and neglect the relative value of other forms of 
therapy.
    Only thorough independent research can demonstrate the 
differential impact of such advertising upon the health choices 
of American patients and physicians.
    In conclusion, the members of RxHealth Value applaud the 
Subcommittee for beginning the investigation of the effects of 
this increasingly pervasive influence on the therapeutic 
choices of American consumers and patients. We pledge our 
assistance in implementing any of these recommendations we have 
offered and thank the Subcommittee for this opportunity to 
comment.
    [The prepared statement of Mr. Cloutier follows:]

  Prepared Statement of Mark Cloutier, Policy Director, RxHealth Value
    Mr. Chairman, Members of the Subcommittee, I am Mark Cloutier, 
Policy Director of RxHealth Value, a national coalition of consumer 
groups, labor unions, provider groups, business groups and employers, 
insurers and health plans, pharmacy benefits management organizations, 
and academic researchers committed to improving Americans' access to 
health-improving prescription drugs. (Our membership list is appended 
below.) As you can understand, a deliberative body comprised of nearly 
30 organizations will rarely arrive at full consensus regarding any 
issue. Remarkably, our membership has achieved consensus regarding the 
recommendations I am offering regarding Direct-to-Consumer (DTC) 
advertising of prescription drugs to consumers and patients. Safety is 
at stake. I believe the fact of these consensus recommendations 
indicates the fundamental importance of this issue for the members of 
RxHealthValue. It is our belief that this form of advertising affects 
the health and safety of American patients and consumers.
    The tremendous increase in the extent of DTC advertising of 
prescription drugs since the FDA removed the requirement for the 
``brief summary'' of risk information in 1997 \1\ is well documented 
\2\. It is almost impossible to open a general news magazine, view a 
prime time television program or listen to the radio and not see or 
hear advertising for prescription drugs. Given that the prescribing 
physician is the decision-maker regarding the use of these medications, 
it is all the more startling that so many resources are expended by 
drug manufacturers to affect the attitudes of consumers and patients. 
Although there is little evidence \3\ currently available regarding 
whether consumer and patient attitudes affect physician choice in 
prescribing, no stakeholders in the health system and health economy 
have suggested that the impact of such advertising is insubstantial. 
Given the FDA's expressed interest in assessing the effects of DTC 
advertising, we expect more direct evidence of impact will be available 
in the near term future.
---------------------------------------------------------------------------
    \1\ Draft Guidance for Industry: Consumer Directed Broadcast 
Advertisements: Availability. Federal Register 1997; 62:43171.
    \2\ Findlay, Stephen. Prescription Drugs and Mass Media 
Advertising. NIHCM, Sept. 2000.
    \3\ Bero, Lisa A. & Lipton, Shira. Methods for Studying the Effects 
of Direct-to-Consumer Pharmaceutical Advertising on Health Outcomes and 
Health Services Utilization. (Paper to be presented at ASPE Conference 
on Methods to Assess Effects of DTC Advertising, May 30, 2001).
---------------------------------------------------------------------------
    While we await the results of planned and pending studies on the 
effects of DTC advertising on the attitudes, behaviors and medical 
outcomes of consumers and patients, RxHealthValue members are concerned 
that risk information in particular is not adequately or effectively 
conveyed in DTC advertising. One of our member organizations, AARP, 
recently conducted a survey of members to assess the impact of DTC 
advertising \4\ finding that the majority of those surveyed could not 
recall ever seeing risk information in the ads. This poses a serious 
safety risk to consumers and patients. In our first public 
recommendations to the FDA, presented one year ago at the National 
Press Club, RxHealth Value emphasized the fundamental importance of 
protecting the safety of patients and consumers who are confronted by 
DTC advertising \5\
---------------------------------------------------------------------------
    \4\ Foley, Lisa A. & Gross, David J. Are Consumers Well Informed 
About Prescription Drugs? The Impact of Printed Direct-to-Consumer 
Advertising. AARO: Public Policy Institute, April 2000.
    \5\ Policy Recommendations. RxHealth Value May 10, 2000.
---------------------------------------------------------------------------
    Thus, RxHealth Value recommends that the Congress direct the FDA:

   To convene a task force of key stakeholders, including the 
        pharmaceutical manufacturers who advertise prescription drugs, 
        as well as consumer groups, patient organizations, provider 
        groups, payers and relevant experts, to develop and test 
        standards for information disclosure in DTC advertising.

   To more carefully define the concrete meaning of ``fair 
        balance'' in disclosing benefits and risks of advertised 
        medications to include disclosure of other appropriate 
        therapies in addition to alternative medications.

   To further define ``fair balance'' to mean that full 
        disclosure of risks and side effects be given equal print and 
        air time as the description of benefits in the same 
        communication.

    RxHealthValue recommends that the Congress direct that the 
appropriate agencies of the Federal Government conduct on-going 
research to evaluate the effects of DTC advertising on the health of 
American consumers and patients. It is a given that many Americans 
appreciate the increased awareness of diseases and conditions and 
potential therapies which DTC advertising makes possible. It is also 
true that such advertising can obscure potential hazards of the 
pharmaceutical advertised and neglect the relative value of other forms 
of therapy. Only thorough, independent research can demonstrate the 
differential impact of such advertising upon the health choices of 
American patients and physicians.
    In conclusion, the members of RxHealth Value applaud the 
Subcommittee for beginning the investigation of the effects of this 
increasingly pervasive influence on the therapeutic choices of American 
consumers and patients. We pledge our assistance in implementing any of 
the recommendations we have offered and thank the Subcommittee for this 
opportunity to comment.

    Senator Dorgan. Mr. Cloutier, thank you very much.
    Next we will turn to Dr. Shaw.

    STATEMENT OF MICHAEL S. SHAW, M.D., EXECUTIVE DIRECTOR, 
                      EthicAd'

    Dr. Shaw. Good afternoon, Mr. Chairman, Senator. On behalf 
of EthicAd' and the health care community we 
represent, thank you to the Subcommittee for this opportunity 
to comment on direct-to-consumer advertising. This is the area 
to which our organization is dedicated. EthicAd' is 
an independent and neutral nonprofit organization composed of 
leaders of the academic health care community. Dr. Michael E. 
DeBakey is our chairman emeritus.
    EthicAd''s goal is to promote the development of 
DTC advertising in a manner that maximizes public health 
benefits. We do not oppose DTC advertising, we are not critics 
of the pharmaceutical industry. Rather, we support the idea 
that industry should work with other stakeholders to define 
voluntary self-regulatory standards for DTC. These standards 
should be designed to assure the American public that the DTC 
advertising they see represents reliable, accurate, and 
trustworthy medical information.
    The pharmaceutical industry has a long and honorable 
tradition of collaboration with the health care community in 
the development of high quality professional and patient 
education programs. This traditional relationship is usually a 
collaborative effort between the health care community and 
industry. This system provides important checks and balances on 
the marketer, and I am certain this distinguished body 
understands the importance of checks and balances.
    DTC represents a dramatic shift in this traditional 
relationship. DTC removes these important checks and balances. 
DTC provides an opportunity for industry to act autonomously to 
develop and disseminate health care information for the 
consumer without any outside input or review by the medical 
community.
    The issue is not the relatively innocuous television and 
magazine advertisements. These highly advertised and visible 
programs are closely monitored by the FDA. They represent only 
the tip of the iceberg. Industry is investing hundreds of 
millions of dollars in a wide variety of consumer web sites, 
patient informational programs and relationship marketing 
projects.
    The overwhelming majority of these arrangements are not 
reviewed by FDA. Who, then, assures the reliability of this 
information?
    Currently this DTC content is developed by marketing 
departments and their advertising agencies, subject only to the 
internal medical review within a given company. Most DTC 
programs are not pre-approved by the FDA. Does this current 
system assure consumers of reliable and unbiased health care 
information? Industry has no uniform standards other than the 
expectation that they will comply with FDA requirements. But 
there are an estimated 60 to 70,000 pieces of DTC material 
developed each year. The FDA has only 13 full-time reviewers. 
As a practical matter, the FDA can review only a sampling of 
these materials. Clearly, DTC presents great potential for 
abuse.
    There is a wide disparity in how different companies 
approach DTC. Many pharmaceutical companies are socially 
responsible and ethical in preserving consumer trust. Other 
companies take a narrower view. They focus on DTC merely as a 
mechanism to drive sales. The consumer is often unable to 
differentiate between those DTC programs designed the promote 
their health and welfare and those programs designed merely to 
promote sales. There are no standards, best practices, or even 
clear goals for DTC. There should be. We applaud the 
exceptional work of FDA. The agency has balanced conflicting 
demands of its stakeholders to review mountains of promotional 
materials using extremely limited resources. FDA is the 
American public's best protector in this area. It requires 
increased resources to manage the increased demands placed upon 
it by DTC.
    But FDA regulations alone will not solve the DTC problem. 
These regulations represent minimum legal requirements. They do 
not and cannot and many would argue should not define optimal 
behavior. Clearly, something additional is needed. We do not 
believe that additional legislative action is required at this 
time. Instead, we suggest that there is immediate need for 
industry collaboration with other stakeholders in the 
development or support of voluntary self-regulatory goals, 
standards, and best practices. These standards will assure the 
American public that the DTC health care information they 
receive is reliable, understandable, and trustworthy.
    Rather than wait for government or industry action, the 
academic health care community that EthicAd' 
represents has developed suggested standards and best 
practices. These specific standards are summarized in my full 
written testimony. We believe that reasonable people develop 
responsible solutions. We welcome and need the active 
involvement of the pharmaceutical industry and the oversight of 
Congress and the FDA to implement voluntary DTC standards.
    Thank you for the opportunity to share these views and to 
answer your questions.
    [The prepared statement of Dr. Shaw follows:]

   Prepared Statement of Michael S. Shaw, M.D., Executive Director, 
                          EthicAd'
EthicAd'
    EthicAd' is a non-profit organization representing the 
neutral and independent views of the academic healthcare community. The 
EthicAd' Steering Committee and Advisory Board is chaired 
by, Dr. Michael E. DeBakey, Director of the DeBakey Heart Center of the 
Baylor College of Medicine, and Donna Hill Howes, R.N., M.S., Director 
of Health Education for Time, Inc. Health. It is also composed of 
leaders in medical education. Many of those members have collaborated 
with the pharmaceutical industry in the development of professional 
educational programs and materials. EthicAd''s Executive 
Director, Dr. Michael Shaw, is a physician, educational filmmaker, 
former-educational media specialist at the National Institutes of 
Health National Library of Medicine and President of Shaw Science 
Partners, Inc. in Atlanta, GA.
Part 1--Executive Summary
Direct-to-Consumer Advertising and Public Health
    During the past two years, EthicAd' has studied the 
legal, ethical and practical issues underlying DTC advertising. In 
order to better understand the needs and views of the various 
stakeholders, we obtained advice and input from the pharmaceutical 
industry, regulatory community, consumer groups, healthcare 
professionals, managed care providers, insurers and members of the 
legislative community.
    While a significant portion of the medical community and medical 
organizations are opposed to DTC advertising, EthicAd' 
maintains a different position. We respect the pharmaceutical 
industry's long tradition of developing valuable and credible 
professional educational programs. We believe that if industry takes 
proactive responsible steps to develop voluntary goals, standards and 
best practices, DTC advertising has the potential to make a significant 
positive contribution to public health. We believe that the major 
concern of healthcare professionals is not the existence of DTC, but 
the informational depth, quality and focus of the current genre of DTC 
advertising.
    As a result of our research, we offer the following observations 
about DTC advertising:

      L1. The Pharmaceutical Industry Has Become a De Facto Member of 
the Healthcare System

        LDTC represents a dramatic departure from the traditional 
relationship of the pharmaceutical industry to the healthcare 
professional and patient. Prior to DTC, industry communicated directly 
to the healthcare professional through the common language of 
scientific studies and clinical data. When industry sponsored patient 
education materials, these were distributed to patients only after 
being screened by ``learned intermediaries.'' DTC fundamentally changed 
this dynamic by enabling industry to provide healthcare information 
directly to patients. Because no tradition or common language exists 
for industry to communicate complex medical information to consumers, 
by default the ``language'' used is predominantly one of merchandise 
advertising. This emphasizes product image and brand awareness more 
than education. While this mode of advertising is appropriate for most 
types of consumer goods, society holds medical practice to higher 
standards. EthicAd' believes that there is an important 
rationale for asking industry to adhere to similar high standards. 
Through DTC, the pharmaceutical industry has become a healthcare 
provider and a de facto member of the healthcare community. In all 
other instances, society requires that healthcare providers undergo 
extensive training and licensure as a prerequisite for the privilege of 
providing healthcare to the public. EthicAd' believes that, 
when industry exercises the privilege of becoming a provider of 
healthcare information, industry must take similar self-regulatory 
steps to assure that the information it develops, sponsors and/or 
provides adheres to ethical standards comparable to those of other 
healthcare providers.

      L2. DTC--The Tip of the Iceberg

        LWhile DTC advertising is the most visible form of industry 
involvement in the delivery of healthcare information, the scope of 
this new relationship between industry and consumers goes far beyond 
television and print advertising. In recent years, industry has been 
systematically extending the ``reach'' of its marketing into less 
apparent direct and indirect forms of healthcare information delivery 
to consumers. These activities take various forms, from creating and 
sponsoring disease-state Internet sites, to creating and sponsoring 
patient advocacy groups whose goal is to promote patient information in 
a manner that is consistent with product marketing strategy. These 
activities do not necessarily fall within the category of ``direct-to-
consumer'' programs but under the headings of:

       Relationship marketing;

       Industry-funded patient support programs; and

       Direct-to-patient marketing.

    The scope and extent of these alternate forms of healthcare 
information delivery to consumers are not necessarily reflected as DTC 
spending. They can fall into other less apparent categories. Industry's 
involvement in communicating directly with patients through these more 
ambiguous channels is likely to expand exponentially given the rate of 
industry's growing investment in consumer data mining sources such as 
healthcare Web sites, online patient medical record systems, and 
pharmacy benefits management databases. These forms of patient data 
sources provide industry with the opportunity to market directly to 
patients within a specific disease category in a manner that may not be 
recognized as commercial advertising by patients and patients' 
families.

      L3. The Consumers' Need for Trustworthy Information

        LBased upon discussions with consumers, we believe that the 
public may be uncertain and confused about the reliability and 
impartiality of DTC healthcare information. As alternate forms of 
advertising, such as ``infomercials,'' expand, it will become 
increasingly difficult for consumers to separate valid and unbiased 
medical information from commercial product advertising. They are also 
confused about educational efforts represented as ``independent'' but 
actually funded by industry. Activities such as disease-state Web sites 
may be represented as ``independent'' but may not necessarily be 
unbiased. For example, an ``independent'' consumer Web site about a 
cholesterol-lowering treatment may discuss the relative benefits of a 
particular class of drug used to treat high cholesterol in a medically 
accurate manner. But while the materials may be factually correct, they 
may not provide sufficient emphasis upon the fact that lifestyle 
modification (proper diet and exercise) might entirely eliminate the 
need for medication. Thus, while consumers and patients have enormous 
need for healthcare information, they are uncertain about whether they 
can trust material developed though industry funding.

        LAn important question is, if industry is going to play the 
role of healthcare information provider, how can consumers trust that 
the information provided is independent, unbiased, medically reliable, 
and represents the patients best interest . . . not just the commercial 
best interest of the sponsor.

      L4. The Need for Voluntary Best Practices for DTC

        LThere is enormous variability in the methodologies used by 
different pharmaceutical companies in the development of DTC campaigns 
and materials. Some companies take extraordinary steps to assure that 
the DTC programs they sponsor provide significant public health 
benefits. Those companies take systematic steps to gain input and 
suggestions from independent medical experts, consumers, and patient 
advocacy groups. Some companies develop comprehensive DTC campaigns 
that include patient education and patient care materials developed in 
collaboration with reputable independent third-party organizations and 
institutions. Other companies have a more restrictive view of DTC. They 
limit DTC activities to product advertising and promotion. Currently, 
there is no set of standards or best practices, or even agreed upon 
goals for DTC. Moreover, the consumer has no way to differentiate 
programs developed using these ``best practices'' from those that 
employ only a narrow commercial bias.

      L5. FDA Regulations Represent the Legal Requirements, Not the 
Highest Ethical Standards

        LWe recognize that the FDA has ultimate regulatory authority 
and commend DDMAC for its excellent performance in balancing the 
complex needs of its stakeholders. However, there are limitations to 
the FDAs role given limitations in its regulatory scope and its finite 
manpower. While current FDA regulations are necessary to protect the 
public, they are not sufficient to assure that DTC programs promote the 
public good. The FDA has no regulatory authority to require that 
industry develop DTC programs in a manner designed to promote public 
health. For example, FDA regulations require that sponsors include a 
``Brief Summary'' to accompany a product advertisement. The term Brief 
Summary refers to complex, exhaustive labeling traditionally used to 
inform physicians about the myriad of potential side effects and 
complications associated with a given product. While the FDA 
``encourages'' pharmaceutical companies to modify this Brief Summary 
into a form that is understandable to patients, FDA regulations do not 
``require'' pharmaceutical companies to do so. This is but one example 
of how current FDA regulations protect the public interest but do not 
require industry to act according to optimum standards.

        LWe believe that there is enormous and immediate need for 
industry to develop voluntary self-regulatory DTC goals, standards, and 
best practices that promote development of consumer healthcare 
information that is reliable, understandable and trustworthy.
Part 2
Goals and Standards in Direct-to-Consumer Advertising of Ethical 
        Pharmaceutical Products
    Background

    Advertising prescription drug products to consumers is a relatively 
recent phenomenon. The most visible form of DTC advertising, television 
commercials for prescription products where the indicated use of the 
product was identified, has only been in existence since 1997 when the 
FDA released its draft Guidance to Industry. Because DTC advertising is 
so new, there has not been enough time to fully assess its impact upon 
public health, or to evolve standards and best practices for DTC 
advertising. EthicAd' has been studying this issue for more 
than a year. It has obtained input from representatives of the 
pharmaceutical industry, advertising industry, healthcare 
professionals, regulatory agencies, patient advocates and, most 
importantly, consumers. The ideas for DTC Standards described below are 
based upon this research.
    The pharmaceutical industry has a long and honorable tradition of 
collaboration with the medical community and government agencies in the 
development of new therapies and sponsorship of educational programs 
designed to promote public health. DTC advertising represents a 
fundamental shift in the nature of the pharmaceutical industry's 
relationship to healthcare providers, patients, and the public 
(``consumers''). Prior to DTC, industry made information available to 
healthcare professionals who then served as learned intermediaries in 
educating patients with information they deemed relevant. By permitting 
industry to provide health information directly to consumers, DTC 
advertising allows industry to function in a role traditionally 
reserved to trained and licensed healthcare professionals.
    EthicAd' is not opposed to DTC advertising. We believe 
that providing the public with reliable, balanced, and understandable 
information about diseases, treatments and prevention can result in 
consumers developing more responsibility for their own health and well-
being. EthicAd' believes that it is possible for the 
American people to derive public health benefits from DTC advertising 
if industry takes positive, responsible, and constructive steps to 
reduce the potential for bias in DTC information. Such voluntary 
efforts would also reduce the need, or likelihood, of systematic 
government regulation.
The Need for DTC Best Practices
    The FDA has sole regulatory authority for promotional materials 
involving prescription pharmaceuticals. However, FDA regulations 
represent the minimum legal requirements, not optimal behavior. 
Professional organizations, consumer groups and the legislative 
community have raised serious questions about whether the current form 
of DTC advertising contributes to public health and well-being or 
merely raises the cost of pharmaceutical products and contributes to 
public confusion. EthicAd' believes that it is critical for 
the pharmaceutical industry to take voluntary constructive steps to 
assure that DTC advertising develops in a responsible manner.
    Just as all healthcare professionals are trained in a set of 
ethical standards and their behavior monitored for adherence to those 
standards, we believe that industry must take concrete positive steps 
to assure that DTC information is consistent with the ethics of good 
medical practice based upon the following principles:

   By virtue of providing the public with health information 
        through DTC advertising, the pharmaceutical industry has become 
        a de facto healthcare information provider. As with any other 
        health care provider, this is a privilege and carries community 
        responsibilities.

   In enjoying this privilege, industry must exercise social 
        responsibility to ensure that the information they provide to 
        patients and the public is honest, fair, balanced, and 
        comprehensive.

   In addition, industry should accept responsibility for using 
        DTC advertising as an opportunity to collaborate with the 
        medical community, patient advocates and government agencies to 
        improve public health by dedicating a significant portion of 
        DTC budgets to providing the public with non-promotional 
        educational materials.
A Vision for DTC
    EthicAd' is committed to promoting constructive change 
in the field of DTC advertising. One of the first steps is to develop a 
clear vision for DTC advertising.

    We envision the next generation of ``ethical DTC advertising'' to 
be Direct-to-Consumer programs developed by the pharmaceutical industry 
in collaboration with other stakeholders (the medical community, 
consumer groups, government agencies) that are designed to meet the 
needs of the public for reliable, relevant and trustworthy information 
while also meeting industry's need to build brand awareness and promote 
appropriate use of its products.

    There are several important elements to this vision. First, it 
acknowledges the fact that the pharmaceutical industry is, and has long 
been, an active participant in the health care system. Second, it 
recognizes and accepts the fact that the pharmaceutical industry is a 
business and not a charity. Industry participates in DTC because it 
expects a return on investment. There is nothing inherently wrong with 
this, but by definition, it does mean that industry has an inherent 
bias. In order to create ``socially responsible'' DTC, it is important 
to recognize, accept and adjust for that bias. This is the third 
component, the need for collaboration and for systems of checks and 
balances.
    In order for DTC to meet the consumers desire for reliable and 
trustworthy information, industry can correct its inherent bias through 
collaboration with outside and independent advisors or organizations 
willing to assure the credibility, reliability, and balance of the 
information being presented.
EthicAd' Recommended Goals for DTC Advertising
    The EthicAd' goals for Direct-to-Consumer advertising of 
pharmaceutical products are:

      L1. To provide consumers with substantive and reliable 
information about pharmaceutical products and the diseases that they 
treat.

      L2. To provide materials that increase consumer awareness of the 
signs, symptoms and treatment options for medical conditions.

      L3. To provide a mechanism for industry to develop and deliver 
materials to patients/consumers that can be useful in the patients' 
care or improve consumers' ability to ask more informed questions of 
their healthcare provider.
Best Practices for Development of Quality DTC by Pharmaceutical 
        Industry
    EthicAd' has determined that many, but not all, 
pharmaceutical companies take constructive steps to develop socially 
responsible DTC. The following are industry best practices that some 
pharmaceutical companies are already successfully employing in the 
development of DTC programs:

      L1. Ethical DTC advertising should provide consumers with 
reliable and accurate pharmaceutical products available for the 
treatment of a disease or medical condition without creating 
misimpressions or unrealistic expectations regarding,

        La. The specific patient population for which the product is 
indicated,

        Lb. The availability of non-pharmacologic means of therapy,

        Lc. Results that patients can expect from treatment, and

        Ld. Possible negative consequences from treatment.

      L2. All materials developed through direct or indirect industry 
influence and/or financial support should explicitly state the nature 
of such support and the nature of influence exercised by industry over 
the subject matter.

      L3. When designing a DTC campaign, industry should develop an 
advisory board of independent health care professionals and patient 
advocates at the formative design stage of a DTC campaign. The goal of 
this advisory board is to help identify the needs of patients and to 
assure that the approach being developed is consistent with public 
health interests. This best practice helps industry to create DTC 
programs that balance the needs of the company with the needs of the 
public and the healthcare community.

      L4. In DTC campaign development, industry should conduct a formal 
needs assessment of the informational and educational requirements of 
individuals who have a particular disease. In essence, this is a step 
to define what specific benefits a DTC campaign can provide for 
consumers and patients.

      L5. Industry should formally test DTC materials with consumers in 
order to validate the materials educational efficacy. DTC materials go 
through a rigorous process of focus group testing to assess how well 
they convey the sponsor's message. This testing can be expanded to 
evaluate whether the advertisements are conveying medical information 
clearly and effectively, and to assure that the advertisement is not 
creating any misimpressions.

      L6. Industry should develop consumer-friendly versions of the 
current professional ``Brief Summaries.'' Not only has the FDA allowed 
industry to revise this material, they have encouraged industry to do 
so. From a best practice perspective, there is no reason why industry 
cannot revise the Brief Summaries of each and every product that is 
promoted through DTC by the end of 2002. These revisions should also be 
tested to assure that they are understandable to the average consumer.

      L7. Recommendations for DTC Content Design

        La. Content accuracy is more than just lack of factual errors. 
Often materials can be misleading by omission of information that can 
provide objectivity and balance. The review process established by 
industry should include outside independent advice from medical experts 
to look for such important omissions or potential areas of confusion.

        Lb. Responsible DTC should include information about behavioral 
and non-pharmacologic approaches to treatment and/or prevention. In 
many common diseases and conditions, such as hypertension and Type II 
diabetes, diet and exercise are the first-line therapy. DTC materials 
have the responsibility to inform patients of these important public 
health measures.

        Lc. The use of statistics or data in DTC advertisement can be 
inherently misleading and, if used, must be presented in a manner that 
assures accurate understanding by the target audience. For example, 
stating that a drug reduces risk of a disease by 50% may be factually 
correct. But, that benefit may only be a reduction from 2% risk to 1% 
risk. To simply state a ``50% reduction'' is inherently misleading 
unless accompanied by a full and understandable disclosure of the 
meaning of the data.

        Ld. Industry typically assesses DTC advertising materials by 
means of field tests and focus groups. These tests should be expanded 
beyond just marketing efficacy to include questions that measure 
whether the content is understandable to consumers and to assure that 
the content does not create misimpressions. That data should be made 
available to the internal DTC reviewers and should be available for 
submission if requested by the FDA.

      L8. Recommendations For DTC Design and Visual Presentation

        La. Industry must recognize that patients, especially those 
with serious or chronic medical conditions, may be emotionally 
vulnerable to information that can be interpreted as suggesting 
unrealistic hope for improvement.

        Lb. Print advertisements and broadcast commercials are 
expensive to develop and disseminate. Obviously, industry has the right 
to make these materials visually attractive so that consumers will pay 
attention. However, there is a point where the application of visual 
design that appeals to consumers' ``inner self'' and ``inner desires'' 
may become misleading to consumers by creating unrealistic hope. While 
this area is admittedly subjective, the main area of concern relates to 
the selection and portrayal of ``role model'' patients and the 
activities they are represented as performing.

        Lc. Industry should establish a process for including outside 
medical advice regarding the selection and characterization of actors 
cast to depict patients suffering from a condition or disease. Every 
effort should be made to assure that actors portraying patients are 
appropriate in age, sex, race, national origin, body habitus, and 
physical characteristics. Actors portraying patients become ``role 
models'' for how patients see themselves. They should be shown with 
performance and activities that represent realistic expectations for 
individuals who suffer from the respective disease or condition.
Part 3
EthicAd'
    EthicAd' is non-profit organization dedicated to helping 
to promote increased public health benefits from DTC information about 
prescription pharmaceutical products. EthicAd' is a 
coalition of leaders from academic medicine and the healthcare 
community who are committed to working as a neutral and impartial body 
in collaboration with regulatory agencies, professional organizations, 
consumer groups, advertising agencies, and the pharmaceutical industry. 
Dr. Michael E. DeBakey is Chairman Emeritus of EthicAd'.
    Our goal is to maximize the public health benefits of DTC 
information by providing the consumer with substantive, understandable 
and reliable information about pharmaceutical products. We will achieve 
this goal through the development and continuous improvement of 
``Ethical DTC Standards'' for the development of DTC material. 
EthicAd' will focus upon the educational quality of DTC 
material, while taking into account the concerns of manufacturers and 
regulators. The role of EthicAd' is not to judge or evaluate 
individual products, but to promote high ethical standards and 
effective educational techniques for communicating information about 
those products. In addition, EthicAd' will review DTC 
materials and provide an ``EthicAd' Seal'' for DTC 
pharmaceutical information that demonstrates use of the Ethical DTC 
Standards.

    Senator Dorgan. Dr. Shaw, thank you very much.
    Dr. Dolinar.

     STATEMENT OF RICHARD DOLINAR, M.D., ENDOCRINOLOGIST, 
                   ENDOCRINOLOGIST ASSOCIATES

    Dr. Dolinar. Senator Dorgan, Senator Fitzgerald: Thank you 
for allowing me to testify today. I am an endocrinologist in 
private practice in Phoenix, Arizona. I specialize in the 
treatment of diabetes. I received my undergraduate degree at 
SUNY College in Albany, New York, I went to medical school at 
State University of New York at Buffalo, and I did my training 
in diabetes and endocrinology at Duke University down in North 
Carolina.
    I am also a retired Air Force colonel, Vietnam veteran, 
former flight surgeon. I mention my flying experience for the 
following reason: I want to use it as an example to make the 
case for direct-to-consumer advertising and to show you the 
value thereof.
    When you are flying in an airplane and you smell smoke in 
the cockpit, you have got to address that issue immediately and 
aggressively. Otherwise that plane is going to come down sooner 
than you planned, at a location other than an airport, and the 
wheels are not going to be the first thing to touch the ground.
    Likewise with diabetes. High blood sugars indicate the 
smoke of diabetes in a patient. If that is not treated 
immediately and aggressively, that patient is going to crash, 
and the crash is going to be in the form of a heart attack, a 
stroke, kidney failure, amputation, blindness. What direct-to-
consumer advertising is doing is bringing patients into my 
office early so that I can treat them, can intervene.
    We know that by treating diabetes, bringing the blood 
sugars under control, we can decrease the complications down 
the road. When you look at diabetes, it is the complications 
that really cost. For example, if you do not treat the sugars 
and they get a heart attack, then they come into the hospital 
with a heart attack or stroke, very expensive.
    In fact, your diabetes patients, they represent 6 percent 
of the population; they consume 15 percent of the health care 
dollar. On the other hand, if we can get them early and treat 
them, I am confident we can decrease the amount of dollars 
spent on the diabetes patient.
    Direct-to-consumer advertising brings these people in for 
treatment. The other thing it does, it helps to reach out to 
those who are not diagnosed. The ADA estimates there are 6 
million people out there with diabetes that do not realize it. 
By getting the word out to them and reaching out to those 
people and bringing them in, we can significantly help them. 
They really represent smoke in the cockpit of our health care 
system. There is an avalanche of diabetes that is now affecting 
our population.
    I also think direct-to-consumer advertising is critically 
important today, especially in light of managed care. Managed 
care has changed the doctor-patient relationship. I started 
medical school in 1968 and over the last 30 years I have seen 
the changes. The doctor is now often faced with the problem of 
attempting to meet the needs of two masters: on the one hand 
the patient, on the other hand the managed care plan, the HMO, 
the insurance company.
    On the one hand, he is trying to provide care. On the other 
hand, incentives and disincentives are set up to withhold care. 
In a situation like this, the doctor-patient relationship 
becomes an adversarial one. We have drugs available to treat 
diabetes that can save money down the road, but unfortunately 
many of the managed care plans have incentives in place not to 
treat these patients. So consequently the patient is in a very 
difficult situation, in a situation where you are in an 
adversarial relationship with your physician, you need 
everything you can to help you. Information is critical. DTC 
provides information to those patients.
    I personally do not think that advertising burdens the 
physicians or negatively impacts on the doctor-patient 
relationship. In fact, I find that patients who have seen these 
ads on diabetes, hypertension, etcetera, are easier to work 
with. They know the seriousness of the disease, they know there 
are treatments out there, and they come asking for help. So I 
have found it to be a benefit actually.
    I do not think it puts pressure on me to order drugs that 
are not necessary. If that patient does not require the drug, I 
do not order it.
    If any of us were to go out and buy a house or buy a car or 
buy a stereo set, would we not get information from various 
sources before we made that decision? Yet when it comes to 
health care we seem to keep the patient in the dark. I think 
knowledge is power. I think it is critically important that 
patients have that knowledge, have that power, because 
currently they are trapped in their health care systems. They 
do not have choice. They have to take their employer's health 
care system. So we have limited choice, and now if we limit 
direct-to-consumer advertising we limit knowledge, and if we 
limit choice and limit knowledge how is that patient going to 
work their way through the health care maze to get the care 
that they need?
    Direct-to-consumer advertising provides information that is 
filtered through the FDA. It is regulated by the FDA. It is a 
better source of information than on the unregulated Internet 
or whatever hearsay the patient picks up from somebody down the 
street.
    For the sake of the patients, I would ask you to vote 
against ignorance. I think anyone against direct-to-consumer 
advertising is really in favor of ignorance. I would ask you to 
vote against ignorance. I would ask you not to place any 
further constraints on direct-to-consumer advertising.
    Thank you. I would be happy to take any questions.
    [The prepared statement of Dr. Dolinar follows:]

     Prepared Statement of Richard Dolinar, M.D., Endocrinologist, 
                       Endocrinologist Associates
    Mr. Chairman and Members of the Committee:
    I am Dr. Richard Dolinar, an endocrinologist in private practice in 
Phoenix, Arizona, specializing in the treatment of diabetes. I earned 
my undergraduate degree at Siena College in Albany, New York, and my 
medical degree from the State University of New York at Buffalo. I did 
a fellowship in endocrinology and diabetes at Duke University. I am co-
author, with Betty Breckenridge, of a book entitled Diabetes 101, a 
patient-oriented guide to this disease. It is in its 3rd edition and 
has been published in several languages. I am also a retired Air Force 
Colonel, a Vietnam veteran, and a former flight surgeon.
    I mention my flight experience because I want to use an airplane 
analogy to make the case for the value of direct to consumer 
advertising of prescription drugs.
    When you're flying and you smell smoke in the cockpit, you know 
that this is something that has to be addressed immediately and 
aggressively. If this problem is not addressed, the plane is likely to 
come down sooner than planned, at a place other than an airport, and 
the wheels are not going to be the first things that touch the ground.
    If a patient's blood sugar is high, that's the smoke that warns of 
diabetes. Unless the problem is addressed immediately and aggressively, 
there will certainly be a crash--in the form of a heart attack, a 
stroke, kidney failure, amputation or blindness, all of which are 
complications of diabetes.
    In my experience as an endocrinologist, direct to consumer 
advertising of prescription medicines is getting patients with diabetes 
into my office sooner, so they can be treated with effective medicines 
and avoid the dire complications of this disease. According to the 
American Diabetes Association, an estimated six million Americans have 
undiagnosed diabetes. This constitutes smoke in the cockpit of our 
health care system that, unless addressed, will lead to deadly, and 
costly, crashes.
    People with diabetes make up about 6 percent of the U.S. population 
but account for 15 percent of health care costs--15 cents out of every 
health care dollar. For Medicare, the percentage is even higher because 
1 out of 5 people over age 65 has diabetes. Twenty-five percent of 
Medicare costs go toward diabetes. The majority of this expenditure 
goes to the complications of diabetes, complications that put patients 
in the hospital or on the surgery table and can make them disabled for 
life.
    If we can get diabetes under control, we can avoid these 
complications, saving lives and money. That's why it's critical to 
diagnose diabetes promptly and treat it aggressively. Direct to 
consumer advertising is helping us reach this important goal.
    Direct to consumer advertising is bringing diabetes to the 
attention of people who might have it. It's pointing out the 
seriousness and possible complications of the disease. It's prompting 
people who may have diabetes in the family or may be feeling unusually 
tired, to see their doctors and be checked out. For people who are 
already diagnosed, the ads reinforce the fact that this is a chronic 
disease and that patients need to stay on their medicines.
    Direct to consumer advertising is particularly critical in this era 
of managed care. Sadly, in many cases, the physician can no longer act 
as the patient's advocate. In health maintenance organizations, or 
HMOs, the physician is often forced into the uncomfortable position of 
being an adversary rather than an advocate. The way the system works, 
the physician makes more money if he or she provides less care. 
Although medicines, by helping avoid complications from diabetes, can 
save money in the long run, HMOs, unfortunately, focus on the short 
run, the bottom line for the current quarter. And, since patients tend 
to change insurers every two or three years, there is always the hope 
that when the patient crashes, it will be on another HMO's watch.
    In this environment, the patient needs all the help he or she can 
get. Specifically, the patient needs information about disease and 
possible treatments. Armed with such information, a patient may be able 
to successfully navigate the HMO maze and get needed treatment. Direct 
to consumer advertising is an excellent source of information. Since 
it's regulated by the Food and Drug Administration, it's a far better 
source of information than the neighbor down the street or the 
unregulated Internet.
    I dispute the notion that direct to consumer advertising burdens 
physicians. I find that patients who have seen ads for diabetes 
medicines are informed and easier to work with. They are aware of the 
disease, and they know that it can be treated. Perhaps more important, 
they know that treating the disease now can make a difference down the 
road. They're ahead of the game and willing to take new medicines that 
can help them avoid the complications of diabetes.
    Nor do I feel that direct to consumer advertising puts pressure on 
doctors to prescribe unnecessary medicines. Quite often, patients with 
Type 1, or insulindependent, diabetes come in with an advertisement for 
a pill they hope will enable them to stop insulin injections. I simply 
level with these patients and tell them that these new medicines work 
only for Type 2 diabetes. They are disappointed, but accept the reality 
that these pills are not appropriate for them. I do not consider taking 
the time to explain this to patients an inconvenience, and I resent any 
implication that I would allow pressure from direct-to-consumer 
advertising to influence my prescribing decisions.
    If any of the Members of this Committee were buying a car or a 
house or even a television, I'm sure you would gather information about 
the purchase from a variety of sources. When it comes to health care, a 
much more critical decision, however, we seem to want to keep consumers 
in the dark. We need educated and informed consumers of health care. 
It's not right to withhold information about health care from patients. 
Direct-to-consumer advertising is an easily accessible, user-friendly, 
and FDA-regulated source of information about diseases and possible 
treatments.
    To be against direct to consumer advertising is, in my mind, to be 
in favor of ignorance. Knowledge is power. That's why we're at this 
hearing, so we'll gain the knowledge to make the right decisions. Don't 
take knowledge away from them, too. How are patients to defend 
themselves and get the best care possible, if we limit both choice and 
knowledge?
    For the sake of patients, I ask that you vote against ignorance and 
refrain from placing further restrictions on direct to consumer 
advertising of prescription medicines.
    Thank you very much. I would be happy to take any questions.

    Senator Dorgan. Thank you very much. You have provided 
interesting and in some cases different testimony about the 
same issue.
    I recall an ad that has been on television for some long 
while about a young man what lost I think 140 pounds eating 
Subway sandwiches. Do you recall that ad?
    Dr. Dolinar. I do not recall that one, no.
    Senator Dorgan. Well, do you recall it? Some guy walking 
around holding up the pants he used to wear. He dropped I think 
100, 140 pounds by eating a certain deli sandwich at a 
franchise store.
    I was thinking about advertising. You know, I am smart 
enough to understand that the proper weight loss program does 
not include going to a fast food store. But it seems to me in 
advertising it is kind of let the buyer beware, you make 
whatever claims you can make and let people assess those 
claims.
    It is different, however, with respect to prescription 
drugs. I expect or I would expect that all of you would agree 
that there are risks that one must be cognizant of, and that is 
the reason we have a regulatory regime with respect to 
prescription drug advertising. We want to make sure that what 
people are representing about the drugs is accurate, number 
one, and number two that we are giving some basic information 
about the risk of the drugs and so on.
    There has been testimony today that the regulatory 
responsibility is not being met, not sufficient resources exist 
at the FDA. You have heard some of that discussion. Mr. 
Cloutier, what is your impression of that?
    Mr. Cloutier. I would echo the support of Sidney Wolfe and 
others saying that, given the volume and the rate of increase, 
we have not seen a commensurate increase in staff and resources 
at the FDA to oversee and regulate this.
    Senator Dorgan. Dr. Shaw?
    Dr. Shaw. We actually have a very good relationship with 
the FDA and it is interesting that a lot of times there is 
internal pressure placed on them not to come to the Hill and 
ask for additional funding. But I think that if one took the 
individuals aside within FDA they would almost uniformly say 
that they are in desperate need of additional funding and 
staff.
    Senator Dorgan. Dr. Dolinar, as a practicing physician you 
may not deal with that question day to day, but what is your 
impression of that?
    Dr. Dolinar. I would be happy to respond to it. First of 
all, the Subway sandwiches, I will have to get the reference on 
that so I can start using it in my practice.
    But think about it. If we had the same constraints on 
advertising for Subway sandwiches and hamburgers, probably at 
the end of the advertisement there would be a disclaimer: This 
food could cause obesity, heart attack, high cholesterol, et 
cetera.
    Senator Fitzgerald I thought made a very good point earlier 
when he said he had a nine year old boy who saw an 
advertisement and wanted something. But actually Senator 
Fitzgerald, being the parent, had control over whether that 
child was going to get that or not. I have a nine year old boy, 
Mark, and Mark came to me. He wanted me to build him a 
pipeline. I said, a pipeline? That is one of those things where 
you go flying on your skateboard, you go up in the air and flip 
around. I am the parent. I am not going to do that.
    But my point is these are prescription drugs. What DTC 
does, it brings the patient in, it starts the process. Then the 
physician evaluates, is this an appropriate drug, is it not 
appropriate, is there something else we should be using. So I 
think that is important.
    Also, just to share with you, as I have been sitting here 
listening to the proceedings I just could not help but think 
back to the 1950's. I was a child in the 1950's and at that 
time polio was a very big problem, in the early 1950's. Then 
the vaccine came out. I wonder, if this were the 1950's, 
whether we would be sitting here today pointing out that the 
amount of money spent on vaccines is skyrocketing and that this 
is a very bad thing and that we should not be advertising about 
polio because it is bringing all these people in to ask for 
this vaccine, when in reality there would be another chart with 
the number of iron lungs going in the opposite direction.
    I think drugs are the solution, not the problem. I think 
when it comes to the world of diabetes, high blood pressure, 
heart attack, and stroke, it is not as obvious as that polio 
example I just gave you, but I can assure you by using these 
drugs I can decrease blood pressure, blood sugars, cholesterol. 
I can decrease the chance of complications coming down the 
road.
    So I find this to be very important.
    Senator Dorgan. I would just observe that in the 1950's 
they could not advertise prescription drugs, and of course in 
the 1950's when Dr. Salk gave us the vaccine it became a matter 
of public health for us to deliver that vaccine to virtually 
everyone, especially all children in this country.
    Yes, Dr. Shaw.
    Dr. Shaw. Mr. Chairman, if I could follow up on your Subway 
sandwich analogy, as long as you have offered it. I think that 
what I have heard here is almost universal agreement that DTC 
has the potential to do great good and the pharmaceutical 
industry in the United States and globally is one of the best 
assets for health care that exists, period. It is just a 
question of a squandered opportunity.
    With your Subway analogy, there is an opportunity to talk 
to the American people, not just about which lipid-lowering 
drug is best, but the fact that if you went back to Subway and 
started using their low-fat sandwiches or other modifications 
that in fact you could reduce or eliminate the potential for 
heart disease or atherosclerotic that two-thirds of the 
American citizens are going to die from, approximately, and 
two-thirds of the world's population does not have this entity.
    Why can this opportunity be used also, not just to promote 
drugs, but to promote public health?
    Senator Dorgan. Let me just make one quick comment. I do 
not dispute at all that there is good that can be achieved by 
direct-to-consumer advertising. The issue we have not discussed 
in great detail because that is not what the hearing is about 
is the substantial increased cost and pricing of prescription 
drugs, which I think one could have a hearing or several 
hearings just on the question of pricing and whether that 
pricing is fair.
    But let me call on my colleague Senator Fitzgerald.
    Senator Fitzgerald. Thank you, Mr. Chairman.
    Thank you, all of you, for your testimony. It is all very 
good. I wondered really if our tort system in your opinion does 
not provide a sufficient check on rogue behavior on the part of 
prescription drug advertisers. I do not know if either of the 
first two witnesses had any particular ads that they have seen 
for prescription drugs that they thought went too far. If you 
do, I would be interested, if there are any specific ads that 
you could cite that you thought went too far.
    But also, does not our legal system in this country present 
some liability for any advertiser of pharmaceuticals or, for 
that matter, anything else that goes too far? Either of you, 
Mr. Cloutier and Dr. Shaw?
    Mr. Cloutier. I would just actually draw your attention to 
the ads that the chairman showed at the beginning. Our concern 
is about the amount of risk information and the availability of 
that in terms of comprehension relative to other information 
that is being presented. I think it is a complicated picture.
    We are about to release some research next week on use of 
drugs in the over 65 population. One of the things that we have 
found is that 10 percent of people over 65 use 8 therapeutic 
classes or more. That means that they are treating eight 
separate conditions simultaneously. What we know about that is 
there is a 100 percent probability of polypharmacy, in other 
words some adverse health consequence of using all those drugs.
    As we see direct-to-consumer advertising driving up volume 
and usage, some of which is very appropriate, some of which is 
less clear, that consumers as we empower them to seek these 
prescription drugs need to have the information available to 
them. We believe that it is lacking and the voluntary 
regulations that are in place do not require appropriate 
disclosure of those risks.
    Senator Fitzgerald. Dr. Shaw.
    Dr. Shaw. Well, in our opinion the overwhelming majority of 
pharmaceutical companies are extremely responsible in the way 
they approach direct-to-consumer advertising. It is sort of the 
80-20 rule, that perhaps 20 percent of the companies are 
causing 80 percent of the problems.
    Earlier testimony by Dr. Wolfe cited the fact that in some 
instances companies have been cited 13 and 14 different times 
for essentially the same violation, with little or no 
consequences, and it has just become sort of a cost of doing 
business. In the mean time, it provides incremental revenue.
    Senator Fitzgerald. How is this really any different than 
just about any other area? You have ads out there all over the 
place, say, to invest in a mutual fund and you are not going to 
have all the information you really need in the ad, which will 
probably show their last year's return or something like that, 
just as you are not going to have all the information on both 
sides of the story in an ad for a prescription drug. Why is 
this any different than any other area?
    The consumers out there who undertake research on their 
own, try to get educated as best as possible, and view a 
variety of sources are always going to come out better, 
whatever the area.
    Dr. Shaw. Senator, I think from our perspective the key is 
this: through direct-to-consumer advertising the pharmaceutical 
industry has become a de factor health care information 
provider. Frankly, I think the health care providers----
    Senator Fitzgerald. What is wrong with that?
    Dr. Shaw. Nothing necessarily. The issue is the essence of 
standards and are they going to assume the same ethical levels 
of behavior that we expect from other health care 
professionals. We think that they are capable of that, but we 
think that there is a need to push in that dimension.
    Senator Fitzgerald. Back to my liability question, do they 
not have liability if they are misleading people?
    Dr. Shaw. What behaviors would you expect from your 
physician? Would you expect your physician to merely act within 
the bounds of the law or do you expect something different? 
With due respect----
    Senator Fitzgerald. I think they have a fiduciary duty. I 
expect them to take extra care, a physician. But they are 
always worried about their own liability for medical 
malpractice. I would think that there would be many potential 
tort causes of action for misleading advertising for a 
prescription drug manufacturer. That is kind of a free market 
check on the whole system.
    Mr. Cloutier. I would like to respond to that. I think 
there is a dimension of public health protection here that is 
being missed. To go back to my example of eight therapeutic 
classes being used by 10 percent of the over 65 population, 
there simply is no evidence of what three drugs or more does 
when someone is taking them. So part of it is that we actually 
lack the science, that the science is out of pace with the 
promotional activity of loading on all these pharmacologic 
agents in one person, that we need to pay attention to and that 
we need to be cautious about.
    Senator Fitzgerald. Now, that patient who is taking eight 
or more pharmaceuticals at the same time--you said 10 percent 
of the seniors are doing that?
    Mr. Cloutier. Yes.
    Senator Fitzgerald. They are getting those prescriptions 
from doctors, are they not?
    Mr. Cloutier. They are, and those doctors do not have 
information about any more than there of those drugs 
interacting with each other. So what will typically happen is 
that someone will be taking eight or nine drugs and they will 
come in they will have a number of moderate side effects--
dizziness, nausea.
    Senator Fitzgerald. That doctor could be liable for 
malpractice if he prescribes those conflicting medicines, could 
he not?
    Mr. Cloutier. There is that potential, yes.
    Senator Fitzgerald. I know Dr. Dolinar has been chomping at 
the bit. I do not know if I mangled your name there. If I did, 
I apologize.
    Dr. Dolinar. That is fine.
    I am a doctor. I treat patients. Some of them require that 
many medications. In fact, in the over age 65 group one out of 
five has diabetes and they are taking up 25 percent of the 
Medicare budget.
    The other point I would like to make, this issue of 
empowering the patient I think is critical. I touched on it in 
my introductory statement. Many times the doctor is in an 
adversarial relationship with the patient. In a setting like 
that, you need a patient who is educated.
    Let me give you a quick example. A drug came out a few 
years ago that was a pill for the treatment of diabetes. It 
would allow people who were on insulin who had type 2 diabetes, 
it would allow them to come off the insulin shot. They could go 
on this pill. Many of them could go on this pill, stop the 
insulin.
    There was an HMO, I spoke with the physicians there. They 
were happy with the drug. They could not use it. They could not 
use it because, the way their finances were structured, if the 
physician wrote for that drug the patient would get it, but the 
cost of that drug would come out of that physician's pay check 
that month. So if the drug costs, let us say, $100 for the 
month, that doctor's pay check would be $100 less that month.
    In a situation like that, I doubt if there would be more 
than a handful of physicians who would offer to the patient, 
let us try this pill and take you off of insulin. On the other 
hand, an empowered patient could go in there and say: I have 
seen this drug, I think this could help me; can we try it out.
    I cannot emphasize enough how the doctor-patient 
relationship has changed. The doctor is in an adversarial role.
    Senator Fitzgerald. Well, thank you. Thank you all for your 
testimony.
    Senator Dorgan. Let me just observe, my colleague raises 
the question of tort liability. It is the case, I think, 
however, with respect to food safety and safety of prescription 
drugs and so on, there is a separate class. I was thinking to 
myself as you were asking those questions about Upton 
Sinclair's work in Chicago, as a matter of fact, where he was 
going into these meatpacking plants, and they had rat problems, 
so they were lacing slices of bread with poison and then the 
rates would eat the poison and die and they would throw the 
bread and the rats right down the same chute where the mystery 
meat came out the other end.
    He wrote a book about it and of course that led to the Food 
and Drug Administration and dramatic standards about food 
safety.
    There are some things where let the consumer beware and let 
the courts respond to it do not work. I think medicine is one 
of them, in the sense that you must have standards. I think the 
question you raise is important, what kind of standards should 
you have with respect to advertising, and that is less--that is 
a little less clear.
    It is quite clear what standards you ought to have when you 
manufacturer prescription drugs in an FDA-approved plant. But 
it is a little less clear, and that is one of the reasons for 
the hearing, what the standards one must have to deal with 
advertising of prescription drugs. It is a most interesting 
discussion.
    Senator Fitzgerald. By the way, the stockyards are no 
longer in Chicago. I think they moved them out West, your way.
    Senator Dorgan. That is true.
    I want to thank the panel. The testimony we have received 
has been most interesting and I think sheds different opinions 
and viewpoints on a very interesting question. As the price and 
the cost of prescription drugs continues to increase and as new 
and exciting prescription drugs are developed to deal with 
dread diseases and other conditions, I think all of these 
issues will continue to be ones that will be discussed in I 
hope a thoughtful and a serious way by the Congress.
    This hearing is adjourned.
    [Whereupon, at 4:33 p.m., the Subcommittee was adjourned.]

                                
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