[Senate Hearing 108-183]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 108-183
 
                   DIRECT-TO-CONSUMER ADVERTISING OF
             PRESCRIPTION DRUGS: WHAT ARE THE CONSEQUENCES?
=======================================================================

                                HEARING

                               before the

                       SPECIAL COMMITTEE ON AGING
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                             WASHINGTON, DC

                               __________

                             JULY 22, 2003

                               __________

                           Serial No. 108-16

         Printed for the use of the Special Committee on Aging




                        U.S. GOVERNMENT PRINTING OFFICE
90-049                         wASHINGTON  : 2003
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                       SPECIAL COMMITTEE ON AGING

                      LARRY CRAIG, Idaho, Chairman
RICHARD SHELBY, Alabama              JOHN B. BREAUX, Louisiana, Ranking 
SUSAN COLLINS, Maine                     Member
MIKE ENZI, Wyoming                   HARRY REID, Nevada
GORDON SMITH, Oregon                 HERB KOHL, Wisconsin
JAMES M. TALENT, Missouri            JAMES M. JEFFORDS, Vermont
PETER G. FITZGERALD, Illinois        RUSSELL D. FEINGOLD, Wisconsin
ORRIN G. HATCH, Utah                 RON WYDEN, Oregon
ELIZABETH DOLE, North Carolina       BLANCHE L. LINCOLN, Arkansas
TED STEVENS, Alaska                  EVAN BAYH, Indiana
RICK SANTORUM, Pennsylvania          THOMAS R. CARPER, Delaware
                                     DEBBIE STABENOW, Michigan
                      Lupe Wissel, Staff Director
             Michelle Easton, Ranking Member Staff Director

                                  (ii)

















                            C O N T E N T S

                              ----------                              
                                                                   Page
Opening Statement of Senator Larry E. Craig......................     1
Statement of Senator John Breaux.................................     2
Statement of Senator Debbie Stabenow.............................     5
Statement of Senator Susan Collins...............................    27

                                Panel I

Janet Woodcock, M.D., Director, Center for Drug Evaluation and 
  Research, FDA, Washington, DC..................................    28

                                Panel II

Marjorie Powell, Senior Assistant General Counsel, Pharma, 
  Washington, DC.................................................    58
Nancy Nielsen, M.D., Ph.D., Speaker of the House of Delegates, 
  American Medical Association, Washington, DC...................    79
Meredith B. Rosenthal, Ph.D., Department of Health Policy and 
  Management, Harvard School of Public Health, Boston, MA........    98
Arnold Relman, M.D., Professor Emeritus of Medicine and of Social 
  Medicine, Harvard Medical School, Boston, MA...................   110

                                APPENDIX

Testimony submitted on behalf of the Henry J. Kaiser Family 
  Foundation.....................................................   127
Statement of The Center for Patient Advocacy.....................   138

                                 (iii)

  















  DIRECT-TO-CONSUMER ADVERTISING OF PRESCRIPTION DRUGS: WHAT ARE THE 
                             CONSEQUENCES?

                              ----------                              --



                         TUESDAY, JULY 22, 2003

                                       U.S. Senate,
                                Special Committee on Aging,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:05 a.m., in 
room SD-628, Dirksen Senate Office Building, Hon. Larry Craig 
(chairman of the committee) presiding.
    Present: Senators Craig, Collins, Breaux, Stabenow, and 
Carper.

       OPENING STATEMENT OF SENATOR LARRY CRAIG, CHAIRMAN

    The Chairman. Good morning, everyone and thank you for 
joining us. The Senate Special Committee on Aging will be 
convened.
    We are here today to look carefully at the issue of direct-
to-consumer advertising prescription drugs and ask some 
important questions. The questions would go like this. Does it 
drive up prices? Does it drive up costs? Does it lead to 
inappropriate prescribing? Does it provide useful information 
to consumers? Ultimately, does direct-to-consumer advertising 
of prescription drugs benefit or harm the health care system 
and especially the seniors of our country?
    This is an issue that we as legislators hear about quite 
often. In my town meetings across the State of Idaho and other 
places I have traveled where this issue becomes a topic of 
discussion, the question is why so much advertising? I know 
that it is increasing the cost of the pharmaceuticals that I am 
taking. Is that true? We thought it was important to begin to 
build a record to find out if, in fact, that is the case.
    Too many Americans, often seniors, are not able to afford 
prescription drugs. We know that. We are wrestling with that 
here in the U.S. Senate as we speak and in the House with the 
modernization of Medicare and the inclusion of a prescription 
drug program within it.
    When they see the introduction of new and expensive 
advertising campaigns on television, many ask why are 
pharmaceutical companies spending all of this money on ads 
instead of lowering the price of their drugs? Although direct-
to-consumer advertising may not be the most expensive promotion 
drug companies do, it is by far the most visible. The public 
has noticed the dramatic increase in broadcast advertising over 
the last few years and many tell us that they are concerned 
about it. As I look at the rising cost of prescription drugs I 
can certainly understand their concern.
    I also have heard concerns about direct-to-consumer 
advertising from doctors. They have told me their patients 
occasionally see advertising for prescription drugs and do not 
understand the risks associated with taking drugs or do not 
recognize other treatment options that might be available. Some 
of those treatment options may be less expensive than the 
prescription drugs themselves. I have had some doctors tell me 
that direct-to-consumer advertisements negatively impact the 
doctor/patient relationship.
    On the other hand, I have heard that individuals who, as a 
result of direct-to-consumer advertising, were prompted to 
visit a doctor concerning a condition they would not have 
otherwise have found treatment for. There are certainly 
individuals, including many seniors, who have treatable 
illnesses and are not being treated. If direct-to-consumer 
advertising can get them to see the doctor, this is certainly a 
positive aspect of this kind of advertising.
    I support the idea of consumer-driven health care. If we 
expect consumers to be good decisionmakers, we need to assure 
that they have access to good information. Proponents of 
direct-to-consumer advertising claim that it can provide some 
of that information.
    These questions are especially timely in light of what I 
have just mentioned--the effort on the part of Congress and the 
taxpayers of this country to respond to the needs of many of 
our citizens to have access to prescription drugs. So that is 
why, in part, we are holding the meeting today.
    Now let me turn to the ranking member of this committee, 
who plays a key role in all of these issues and whose 
leadership has been dominant in this committee for a good 
number of years, my colleague from Louisiana, Senator John 
Breaux. Senator.

            OPENING STATEMENT OF SENATOR JOHN BREAUX

    Senator Breaux. Thank you, Mr. Chairman. Thank you for 
having this hearing. It is an important hearing.
    I have always taken the position that good information 
allows people to make good decisions. Bad information, on the 
other hand, causes people unfortunately to make incorrect and 
wrong decisions. Therefore, the question of how information is 
received, where does it come from, how much do people get, are 
vital issues that need to be discussed and debated.
    Advertising for prescription drugs is not the same as 
advertising for deodorant or used cars. The products are much 
more substantial, more difficult to understand, and obviously 
have a much greater impact on the lives of the American people 
than some of the other products that we see advertised.
    So I am anxious to hear from some of the experts today and 
some of the industry representatives as to the purpose of 
advertising, what they hope to get from it, and how that 
advertising influences people with regard to the knowledge that 
they need to take better control of their own health care. 
Hopefully some of these answers will be found today at today's 
hearing and I thank you for having it. Thank you.
    The Chairman. Thank you very much, Senator.
    Now let me recognize our colleague from the State of 
Michigan, Senator Stabenow. Welcome.

              STATEMENT OF SENATOR DEBBIE STABENOW

    Senator Stabenow. Thank you, Mr. Chairman, and welcome, Dr. 
Woodcock and others who will be testifying today. This is an 
issue that I have been extremely interested in and involved in 
and appreciate the opportunity to have the testimony today.
    I also think it is important that we have an opportunity to 
analyze all kinds of information regarding this issue and would 
ask, Mr. Chairman, as part of the record to put out a different 
view than may be reflected in some of the testimony today. 
There is a recent book out called ``The Big Fix'' by Catherine 
Grader and Chapter 5 talks about direct-to-consumer advertising 
and I would appreciate your willingness to put Chapter 5 into 
the record.
    [The information follows:]



    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    
    The Chairman. Certainly. That will become a part of our 
record as part of the testimony today.
    Senator Stabenow. When we analyze this issue of direct-to-
consumer advertising I think it is important to look at the 
total impacts. There is no question that we all want to be 
informed consumers--no question about that--and that we make 
better decisions when we have good information. I think, 
though, that as we look at the rising cost of prescription 
drugs, the spending on prescription drugs, we should be asking 
questions about whether or not it is in the consumer's 
interest. I will just pick one drug. That Vioxx spends more to 
advertise than Pepsi or Budweiser beer, is that necessary for 
us as consumers or does that just add to utilization and add to 
the overall cost and price of prescription drugs?
    I think common sense would tell us we do not really need to 
debate the increase in advertising. All we have to do is turn 
on the television set, Mr. Chairman. I was thinking as I was 
watching this morning, watching the news, that if not every 
commercial, every other commercial is for some kind of 
prescription drug. So common sense tells us that there has been 
a dramatic increase in advertising. Is that meaning a dramatic 
increase in consumer awareness and education or simply a 
dramatic increase in pricing, a dramatic increase in 
utilization?
    I am caught by the fact that the GAO in 2002 reported that 
most of the spending increase for heavily advertised drugs is 
the result of increased utilization. For example, between 1999 
and 2000 the number of prescription drugs dispensed for the 
most heavily advertised drugs rose 25 percent but increased 
only 4 percent for the drugs that were not heavily advertised. 
So I think, Mr. Chairman, that is significant.
    I would just say in conclusion that we constantly, I think, 
struggle between more dollars for research, which we all have a 
great stake in, and dollars for advertising, marketing, other 
parts of the industry, and as a state that does a tremendous 
amount of that great research--Pfizer has facilities in 
Michigan and we are very proud of that research--I want very 
much to see and I think we have a stake in continuing policies 
that provide billions of dollars of taxpayer money through the 
National Institute of Health, tax credits and deductions for 
research, patents that protect companies to recover their 
costs.
    But the deal at the end of the chain for the American 
consumer is that we will be able to afford that product 
because, as our ranking member indicated, this is not buying a 
car, although coming from Michigan, I think we should buy new 
cars every year and they should be American-made, but if I have 
cancer I need my medication and I may have to forego that new 
car.
    I am very concerned that when we look at these issues we 
hear that two to three times more is spent on advertising and 
marketing than research. The industry, of course, disputes 
that. What I find interesting, Mr. Chairman, is that I put in 
legislation last year that simply said that the taxpayers of 
our country will subsidize through tax credits and deductions 
as much advertising and marketing as we do in research. There 
are two line items on tax forms, one for research, one for 
advertising, marketing, administration. The SEC reports show 
that the second line item is, on the average, 2\1/2\ times more 
than research. We are told no, there is more spent on research, 
so I simply said they should be the same, that we would only 
allow a subsidy in the advertising and marketing line item 
equal to research. I could only say that after the strong 
opposition of the industry, the overwhelming and tenacious 
opposition of the industry, it is hard for me to believe, based 
on that and the fact that this bill would not have affected 
them if, in fact, there was more being spent on research, I 
have to assume that, in fact, there is not.
    So I will stop there, Mr. Chairman, and welcome the 
testimony and think that this is a very important topic for all 
of us.
    The Chairman. Thank you very much, Senator, and thank you 
for your interest and involvement in this issue.
    Now let me turn to our colleague from Maine, Senator Susan 
Collins. Welcome.

               STATEMENT OF SENATOR SUSAN COLLINS

    Senator Collins. Thank you very much, Mr. Chairman. I want 
to thank you for calling this morning's hearing to examine the 
effect that direct-to-consumer advertising has had on the 
pricing and utilization of prescription drugs. This issue has 
long been of interest to me and I appreciate having the 
opportunity to examine it in more detail.
    Prescription drug spending increased at an annual rate of 
about 18 percent from 1997 through 2001 and we know that it is 
the fastest growing component of health care spending in the 
United States. With the increase in the cost of prescription 
drugs and in the amount of prescription drugs purchased has 
come the increase in direct-to-consumer advertising. Direct-to-
consumer advertising of prescription drugs has tripled from 
$791 million in 1997 to $2.7 billion in 2001. That raises what 
I think is a very legitimate question: Has DTC advertising 
contributed to the spiraling cost of drugs in the United 
States?
    Now we know what both sides say about this. Critics say 
that the advertising gives consumers incomplete information, 
that it promotes false expectations, that it puts pressure on 
physicians to write unnecessary or inappropriate prescriptions. 
They say that the ads prompt patients to ask their physicians 
to prescribe new drugs that are more expensive but not 
necessarily more effective than older drugs.
    Proponents of the advertising, however, contend that it 
improves public health, that it encourages patients to seek 
help for untreated conditions, and has opened up discussion of 
once-forbidden topics. They say that the increases in the 
prices of prescription drugs are not due to advertising but 
rather, to appropriate increases in utilization and the high 
cost of research and development.
    We do know that the high cost of prescription drugs is 
putting pressures on states' Medicaid programs and on insurance 
costs that the private sector is bearing. Rising drug costs are 
also important to us as we are drafting the new Medicare 
prescription drug plan.
    All of this prompted me to join a tripartisan group of 
senators--Senator Jeffords and Senator Mikulski and I--in 
asking the General Accounting Office last year to review the 
effect of such advertising on the use and the cost of 
prescription drugs. We found through this report that while the 
pharmaceutical industry did spend significantly more on R&D 
than on promotional activities such as direct-to-consumer 
advertising, the drug companies have increased spending on 
advertising more rapidly than they have increased spending on 
R&D.
    The report also found that DTC advertising appears to 
increase utilization and spending and, perhaps not 
surprisingly, that the drugs that are most heavily advertised 
are often among the best selling drugs. In the year 2000, 22 of 
the 50 drugs with the highest direct-to-consumer spending were 
among the top 50 in sales. Moreover, the sales of drugs with 
the highest advertising spending have risen more quickly than 
the sales of other drugs.
    More troubling and an issue that I want to raise with our 
witness today was the fact that the report indicated that the 
Food and Drug Administration has been unable to keep pace with 
those pharmaceutical companies that were bent on bad faith 
advertising while seeming to comply with the rules. This is an 
issue that we have been pursuing with the FDA.
    So again I would ask that my full statement be placed in 
the record but thank you for holding this important hearing.
    The Chairman. Senator, thank you for that statement and 
thank you for the work that you have done and the prompting 
that you did with the development of that audit. I think that 
is an important template from which we work in this effort and 
understanding it better.
    Now let me turn to our panels today. We have two. Our first 
panel is panelist Janet Woodcock, M.D. from the FDA, Director, 
Center for Drug Evaluation and Research here in Washington. 
Janet, we thank you for your time before the committee. We also 
thank you for your willingness to stay on and, as my staff has 
said, participate with the second panel and respond to 
questions or interaction as we build this record. We think that 
is very important. We appreciate that courtesy. Please proceed.

 STATEMENT OF JANET WOODCOCK, M.D., DIRECTOR, CENTER FOR DRUG 
          EVALUATION AND RESEARCH, FDA, WASHINGTON, DC

    Dr. Woodcock. Thank you. Good morning, Mr. Chairman and 
distinguished members of the committee. I am Janet Woodcock, 
Director of the Center for Drug Evaluation and Research at the 
FDA. The Division of Drug Marketing, Advertising and 
Communications, which is the group in FDA that regulates 
prescription drug promotion, is located within the Center for 
Drugs.
    Thank you for the invitation to discuss FDA's oversight of 
what we refer to as DTC advertising, the promotion of 
prescription drugs directly to consumers. Depending on how it 
is done, DTC advertising has the potential for doing good or 
harm. On one hand, there is real potential value in patients 
recognizing undertreated conditions and consulting with their 
doctors. As you know, undertreated chronic diseases result in a 
tremendous burden of illness in our country and some of this 
burden is preventable. Ads may help by raising awareness of 
symptoms and potential treatments, as well as encouraging 
people to be more involved in their own health maintenance.
    On the other hand, there is potential for increasing 
inappropriate use of medicines for consumers who do not need 
them, for substituting the use of more costly medicines for 
older effective treatments, or for misinforming consumers about 
a drug's safety and use. Consumers may become confused and 
physicians frustrated when valuable time must be spent 
correcting misconceptions.
    The purpose of FDA regulation of DTC ads is to keep the 
balance on the positive side for the public. The debate about 
where this balance lies has been particularly pointed over the 
past 5 years. Research data, rather than opinion, can best 
inform us all about the real-world impact of DTC ads, and some 
of the data will be discussed today.
    Now there are three important things to understand about 
FDA's authority in this area. First, the statute and the 
regulations focus on the content, not the existence, of 
prescription drug promotion. Second, the law does not make a 
distinction between target audiences. The law has never 
prohibited advertising prescription drugs to consumers. 
However, until the early 1980's this just was not done. Third, 
the act specifically forbids requiring preclearance of ads by 
the FDA, except under extraordinary circumstances.
    The modern era of DTC advertising really began in 1985 when 
FDA announced that the regulations for overseeing promotion to 
doctors provided sufficient safeguards to protect consumers, as 
well. After this, increasing numbers of DTC print 
advertisements appeared.
    Beginning in about 1995, spending on DTC ads began to rise 
sharply and this trend has continued ever since. The on-going 
debate, though, over DTC intensified in 1997 when FDA issued a 
draft guidance that addressed broadcast ads.
    DTC advertising of prescription drugs, including radio and 
TV ads, had always been legal. However, there was a feasible 
mechanism to make sure that consumers could get the required 
risk information. But by the mid-1990's, many changes had 
occurred, both in the marketplace and in technology. Given 
these changes, it was apparent to FDA that sponsors could 
provide a convenient way for consumers to get the additional 
product information.
    So in 1997 we issued a draft guidance, made final in 1999, 
that gave advice on how sponsors could meet the adequate 
provision requirement for broadcast ads by giving reference to 
multiple sources of product information in the ad. At the time 
we issued the final guidance we stated our intent to assess the 
impact of broadcast ads, as well as the impact of DTC promotion 
in general on the public.
    Monitoring direct-to-consumer promotion and especially 
broadcast ads is a top priority of our program. We want to 
ensure that consumers can understand the claims and the product 
risks. We also want to ensure that consumers get truthful and 
not misleading information. We are very interested in better 
ways to communicate risk information to consumers. We have 
issued a draft guidance on the brief summary in 2001 and we are 
working on a revision of this guidance.
    Most sponsors voluntarily submit proposed broadcast ads to 
us for review and comment. We believe that as a result, we 
comment on proposals for most product claim broadcast ads 
before they are aired. FTC gives DTC enforcement letters top 
priority to clear and to issue.
    We also conduct research on DTC and keep on top of the 
literature. The available research shows both positive and 
negative effects from DTC. FDA is not aware of evidence that 
DTC promotion is increasing inappropriate prescribing. Our 
research shows that DTC promotion may encourage consumers to 
obtain additional information about the products and to talk to 
their health care providers about health issues they had not 
raised before.
    However, our research also shows that many physicians 
believe that DTC ads lead patients to overestimate benefits. In 
addition, some physicians do feel pressured to prescribe a 
specific brand name product.
    In summary, at this time we are not aware of evidence that 
DTC promotion is harming the public health. We also acknowledge 
that in some cases DTC promotion may expand the recognition and 
treatment of serious untreated conditions. However, potential 
for harmful consequences calls for on-going vigilance on our 
part. We intend to continue closely scrutinizing DTC promotion, 
working with industry to ensure that broadcast ads comply with 
regulatory requirements and taking enforcement action when 
appropriate.
    Thank you and I will be happy to answer any questions.
    [The prepared statement of Dr. Woodcock follows:]




    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


    The Chairman. Dr. Woodcock, thank you very much for that 
testimony. A couple of questions from me before I turn to the 
rest of my colleagues here.
    I appreciate the scenario you gave of the different events 
that occurred that brought us to broadcast advertising and the 
guidance changes in 1997 and the rationale behind it. Was there 
on the part of the pharmaceutical companies a substantial 
amount of, if you will, lobbying or urging that a review of 
this particular regulation come about or was it a normal 
process of review on the part of FDA that brought you to a 
conclusion that has really spawned the kind of acceleration of 
broadcast advertising that we have seen?
    Dr. Woodcock. It was a confluence of factors. No. 1, 
companies were running what are called reminder ads on 
television. These simply had the name of the drug. They were 
originally conceived of for physicians, who would have been 
aware of what the drug was. This was very confusing for the 
consumers.
    Second, it is true that some sponsors were considering 
running ads; these broadcast ads were perfectly legal. We felt 
it would be best for us to set the parameters whereby adequate 
provision could be given for getting the consumer information, 
rather than letting this happen and then having to repair it 
afterward.
    So we issued a guidance on how companies could comply, 
since it was apparent it was now feasible, with 1-800 numbers, 
with the Internet, with all the print ads that had begun to 
occur, it was now feasible for companies to make this 
information widely available.
    The Chairman. The problem with that print ad is that while 
I have just turned 58 and I have bifocals, I get out the 
magnifying glass to read it.
    By your testimony, it is evident to me that a letter from 
FDA on a given advertisement, permission to, if you will, or 
recommendations of are not necessary prior to the ad being 
aired. They are purely advisory in their character, your 
activity?
    Dr. Woodcock. They are notification that we would consider 
that ad, if aired, violative, for example, if we sent it to the 
company before they air the ad. So companies follow our advise 
and modify their ads.
    The law states that the companies need to submit the 
information at the time they air ads, not before, and they are 
not required to seek permission or clearance from the FDA to 
air an ad. But many companies, especially for broadcast ads, 
the vast majority of ads are sent to the FDA beforehand, 
probably they are so expensive that pulling them and correcting 
them would be a very expensive proposition.
    The Chairman. Have ads aired that you then followed prior 
to a letter going to them in which you made recommendations for 
change and the ad was pulled and those changes made, or vice 
versa, the ad continued to air against your recommendations or 
in opposition to your recommendations?
    Dr. Woodcock. That does not really happen.
    The Chairman. OK, that does not happen?
    Dr. Woodcock. No. We have additional sanctions we can take 
beyond these letters. They are just the initial notification.
    The Chairman. Thank you very much. Let me turn to my 
colleague, Senator Breaux. John?
    Senator Breaux. Thank you very much, Mr. Chairman.
    Thank you, Dr. Woodcock, for your presentation. Is it a 
policy that the FDA has to review the ad on a pharmaceutical 
before it is shown or does the FDA see it at the same time the 
public would see it for the first time? Tell me what the 
requirements are and what happens in actual practice.
    Dr. Woodcock. The requirements are that firms have to 
submit the ad at the time it is aired. They do not have to seek 
any clearance from the FDA. They do not have to send it in and 
have us look at it. They simply have to send it to us at the 
time it is made public.
    In practice for broadcast advertising, the vast majority of 
ads are sent to the FDA and FDA is consulted before the ad is 
aired.
    Senator Breaux. You make suggestions at that time or would 
you give them a warning that this ad is really not in 
compliance?
    Dr. Woodcock. Yes, we send advisory letters to them. We 
send quite a few of these letters out.
    Senator Breaux. Before the ad is shown?
    Dr. Woodcock. Yes. Then those ads are modified according to 
our advice.
    Senator Breaux. What percentage of the ads that are shown, 
for instance on television, do you think you all have a chance 
to review before they are shown? Fifty percent, more than that?
    Dr. Woodcock. We have estimated around 90 percent but we 
cannot give you an exact figure.
    Senator Breaux. Of the ones that are not previewed, what 
percentage of them get letters of violation or whatever that 
letter is called saying you are not in keeping with what the 
standards should be?
    Dr. Woodcock. We do not have data cut that way. The average 
I think is about 5 percent of all----
    Senator Breaux. The total?
    Dr. Woodcock. Mm-hmm.
    Senator Breaux. How rapid do the companies respond to a 
letter that would be sent by the FDA? What happens if they 
get--what do you call the letter? I am sorry.
    Dr. Woodcock. A notice of violation.
    Senator Breaux. A notice of violation letter. What is the 
respondent rate from the companies? Do they fight you on that? 
Do they comply? Tell me what happens after they get a letter.
    Dr. Woodcock. Almost uniformly the companies comply 
immediately.
    Senator Breaux. What would that consist of?
    Dr. Woodcock. Pulling the ad.
    Senator Breaux. Do they make changes in the ad and rerun 
it?
    Dr. Woodcock. They may but it would have to conform to our 
requirements.
    Senator Breaux. One of the witnesses to follow will talk 
about the policy of the American Medical Association. They have 
instituted a policy on direct-to-consumer advertising and they 
have a policy that has, in fact, been published and contains a 
number of guidelines.
    I understand that the FDA has not accepted those 
guidelines. Why would that be? Do you think you are already 
doing that or you disagree with them, or what?
    Dr. Woodcock. The legal requirements are different than 
recommendations, say, that ads be educational. Those might be 
very desirable characteristics and it is not that we would 
disagree with those aims, but the legal requirements, the 
regulatory requirements for advertising are different and we 
are enforcing the regulatory requirements, as outlined in the 
statute and regulations.
    Senator Breaux. So you would interpret the AMA 
recommendation on guidelines as being other than what you do 
already?
    Dr. Woodcock. Well, there are some additional--as I 
understand them, there are additional goals that the AMA is 
looking for, that ads, for example, help educate patients about 
disease, and so forth. That is very desirable but it is not a 
legal requirement of an advertisement.
    Senator Breaux. So what would establish what the legal 
requirements are? There is not an act of Congress that we 
passed and I did not notice it?
    Dr. Woodcock. Yes.
    Senator Breaux. There is?
    Dr. Woodcock. It is in the Food, Drug and Cosmetic Act and 
the implementing regulations.
    Senator Breaux. That was what your regs in 1997 were 
pursuant to?
    Dr. Woodcock. We did not issue regs in 1997. Our guidance 
that we issued in 1997 was referring to our long-ago 
regulations, which I believe are from the 1960's, implementing 
the advertising provisions in the statute.
    Senator Breaux. When is the last time Congress has acted on 
the rules are regarding to advertising of pharmaceuticals?
    Dr. Woodcock. 1962.
    Senator Breaux. But we were not advertising with the media 
and we were not doing direct-to-consumer advertising in those 
days, were we?
    Dr. Woodcock. That is correct. It was a very different 
environment at that time. In fact, if you recall, from a 
medical standpoint we were coming out of an era where it was 
felt to be desirable not to inform the patient very much.
    Senator Breaux. Sometimes that is still true.
    Let me ask you, then, if the act that Congress last enacted 
dealing with advertising was back in the 1960's, has FDA 
further advanced what those requirements are or are you still 
just basically implementing the 1960 act, although you said the 
situation is entirely different?
    Dr. Woodcock. Right. We have continued, as our guidance 
shows, to clarify how we are currently interpreting the statute 
and regulations but we cannot obviously extend our power beyond 
the powers that are delineated, the limits that are delineated 
in the statute.
    Senator Breaux. Do you think there is anything that you 
would recommend to the Congress that should be changed in light 
of the 1960 act?
    Dr. Woodcock. I think it is a very complicated issue. We 
feel that we are doing an effective job in regulating direct-
to-consumer advertising. We feel that the ads meet the 
requirements in the statute, except when we send them letters. 
So we feel the program in general is quite effective but we are 
continuing to evaluate it.
    Senator Breaux. Final question. Is there anything that you 
feel that is lacking that the FDA ought to be doing in this 
area?
    Dr. Woodcock. We could do more surveillance and other 
activities which were mentioned by GAO if we had additional 
resources to do these activities.
    Senator Breaux. But statutorily it does not seem to be a 
problem? It is a question of manpower, people power?
    Dr. Woodcock. I think statutorily we have our limits. That 
is what we are following.
    Senator Breaux. But is that a problem for you or it is not?
    Dr. Woodcock. No, I do not think that is a problem.
    Senator Breaux. Thank you.
    The Chairman. Thank you very much, Senator. We will go with 
time of arrival of our colleagues, so let me turn to you, 
Senator Stabenow.
    Senator Stabenow. Thank you, Mr. Chairman. Thank you again.
    I wonder if you might respond, in light of your answer to 
Senator Breaux, about a section in the GAO report where they 
indicated that a recent change in the Department of Health and 
Human Services policy for reviewing regulatory letters has 
sharply reduced FDA's effectiveness in issuing untitled or 
warning letters in a timely manner. They have indicated this 
change has increased the time between FDA's identification of a 
misleading advertisement and FDA's request to remove it from 
dissemination, with the result that some regulatory letters may 
not be issued until after the advertising campaign has run its 
course.
    Would you agree with that assessment by the GAO? If you 
might speak to that.
    Dr. Woodcock. The change was put into place to ensure legal 
review of the letters, a thorough legal review before they went 
out, but there is no doubt they had impacted on the timeliness 
of the letters. We agree with that, based on our data.
    We have recently instituted a program in the last several 
months reforming our process of getting review through chief 
counsel and our response to those reviews and I am happy to 
announce that we have issued quite a few letters in the past 
month. We expect to issue several more warning letters this 
month and we expect that this will get our rate of output of 
letters back up to our goal.
    We recognize there is a balance between timeliness and 
legal sufficiency and quality but we feel that the legal review 
has improved the quality of the letters.
    Senator Stabenow. So are you indicating that you supported 
the change that was made in the procedures that has created 
this situation for you?
    Dr. Woodcock. We feel that it has improved the quality but 
we are going to have to do something about the timeliness.
    Senator Stabenow. So you have better quality but at this 
point, in fact, you would agree with their statement that 
regulatory letters, in fact, may be coming out after the ads 
have already run?
    Dr. Woodcock. They were taking too much time to get done 
and we have modified our procedures and we are seeing an effect 
of improved timeliness over the last 45 days.
    Senator Stabenow. Is that an issue also--you mentioned 
funding--is that an issue of staff resources, and so on, as 
well?
    Dr. Woodcock. We will have to see. We will implement these 
changed procedures and see how well we can keep up with the 
timeliness.
    Senator Stabenow. I wonder if you might also talk a little 
bit more about the findings in your research. You indicated 
that the direct-to-consumer advertising is not causing harm to 
public health. However, I wonder if you have examined if the 
DTC is causing patients to request a more expensive, newer drug 
when an older or less expensive one or generic drug might, in 
fact, do just as well for their health condition.
    Dr. Woodcock. Well, in our physician survey that we did, a 
little over half of the physicians who recalled a patient who 
came in and had seen an ad, that patient actually did ask for a 
specific brand name drug. In about half of the cases the 
physician actually prescribed that particular brand name drug. 
In other cases a physician did not prescribe it and one of the 
reasons given was that drug was too expensive, otherwise it was 
not right for the patient, and many other appropriate medical 
reasons for not prescribing the drug.
    Our survey was not really capable of determining whether or 
not more expensive drugs are being prescribed in individual 
cases. We did find that some physicians feel pressured during 
an encounter. Whether the patient has seen an ad or not, they 
feel pressure to prescribe a drug and that pressure was 
increased if the patient had seen an ad.
    Senator Stabenow. I certainly have had those same 
conversations with my own physician, who indicated she could 
see 15 to 20 drug company representatives in her office every 
week promoting their newest, best, most expensive drugs if she 
were to allow that to happen. So there is a whole series of 
things I think that relate, as well as DTC.
    Is it fair to say that DTC gives consumers the impression 
that newer drugs are better drugs? Is that a reasonable 
statement, you think?
    Dr. Woodcock. Well, the drugs that are advertised are newer 
drugs and the physicians in our survey said that the patients 
had a better impression of the effectiveness of the drugs than 
how effective the physicians felt the drugs were. In other 
words, they felt the patients developed an exaggerated idea of 
the effectiveness of the drug as a result of the ad.
    The fact is that older drugs are not advertised. Older, 
effective drugs may not be advertised because they are off-
patent or whatever.
    Senator Stabenow. So this really does relate and I would 
suggest it very definitely relates to the cost of health care 
in terms of utilization going up of the higher-priced 
prescription drugs going up and not only older drugs possibly 
not being asked for by consumers, even though they might be 
just as effective, but generic drugs or unadvertised drugs, 
basically those drugs that come about as a result of companies 
using information once a patent has expired--that also does not 
get adequately in the mix.
    I would just say as an aside, Mr. Chairman, I think one of 
the really positive things that we did in the Senate in passing 
as part of the prescription drug bill was the portion dealing 
with closing loopholes regarding unadvertised brands or generic 
drugs going on the market. I think that was a very positive 
bipartisan effort of the Senate and I hope it will become law. 
It is now in the conference committee.
    I would just also say that as you looked at your study, as 
you looked at the situation, you did not analyze those other 
issues. That really was not within the scope of your study in 
terms of cost, and so on, because when we talk about public 
health effect, I think people in Michigan would say that the 
inability to purchase the medications that they desperately 
need as a result of the price is as much of a public health 
threat to them as anything else. But I am assuming from what 
you said that those issues were not a part of the scope of your 
study; is that correct?
    Dr. Woodcock. Right. Our studies were not economic studies. 
They looked at the attitudes and responses of physicians and 
consumers to direct-to-consumer advertising. So we came from 
that end.
    Senator Stabenow. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Senator, thank you.
    Now let us turn to our colleague from Maine, Senator 
Collins.
    Senator Collins. Thank you, Mr. Chairman.
    Dr. Woodcock, in your survey of physicians you found that 
75 percent believed that direct-to-consumer ads caused patients 
to think that a drug works better than it did and a majority of 
the physicians surveyed also felt that patients who had seen 
these ads did not understand very well the possible risks of 
the advertised drug.
    Don't those facts suggest the need for better scrutiny of 
the ads or for additional consumer disclaimers? If 75 percent 
of the physicians felt that higher expectations than justified 
have been raised by these ads, then does that not suggest a 
problem?
    Dr. Woodcock. I think that advertising in general, it 
probably would be very difficult to provide a balanced medical 
perspective on a drug. That is why there is a learned 
intermediary for prescription drugs, which is that a patient 
must go to a prescriber and seek better information.
    We also found that patients have an appropriately skeptical 
attitude toward these ads and they do not think that all 
information is being presented. Often their response is to go 
to their physician, their pharmacist, the Internet or other 
sources of information to seek more information about the drug. 
So they do not see it as the be-all-and-end-all of their drug 
information.
    Senator Collins. Nevertheless, your survey showed that 75 
percent of the physicians felt that their patients were coming 
in with unrealistic expectations.
    Dr. Woodcock. That is right, and they also reported they 
felt it was somewhat of a problem because they had to spend 
time correcting those impressions.
    If I may say so, we feel that one of the problems that we 
still have and we are working very hard on is in the print ads, 
the information that runs alongside of those ads, which I am 
sure you all have seen, is basically incomprehensible to the 
consumer and that information is supposed to relay the risks 
very clearly and lay out some of the problems and down sides of 
the drug.
    We are working very hard. In 2001 we issued a guidance 
saying that if there was improved patient label, that could be 
run instead, and that is in consumer-friendly language. So more 
people are doing that. We would like to go further with that 
and develop some kind of standard format or something for that 
information so that consumers--because when they see a 
broadcast ad, they are really supposed to go to one of these 
other sources of information. That was the whole idea, but they 
are not very good right now.
    Senator Collins. I guess I would question how effective 
that litany of possible side effects in a broadcast ad is, 
either. It seems like it is the same list for every drug. I am 
not sure that really registers with consumers and I think your 
survey would suggest that it does not. Perhaps that is 
something for you to look at, as well.
    Some of the opponents of direct-to-consumer advertising say 
that the decisions on the use of prescription drugs should rest 
with doctors to make sure that they are based on the best 
scientific knowledge. They say that it confuses the issues for 
consumers to get involved. I do not agree with that, but to 
what degree do you think that marketing directed to physicians 
affects utilization? After all, every physician has the sales 
reps coming to his or her office, has seminars offered and 
other free samples and enticements to use particular drugs.
    Dr. Woodcock. I am glad you asked that question because as 
a physician, I feel that is a much more powerful mechanism and 
it is the primary way of trying to move, I think, new products 
into doctors' offices and being prescribed and there is quite a 
bit more money, of course, spent on physician detailing and 
sampling than there is on direct-to-consumer advertising. We 
also, DDMAC also regulates that aspect of drug promotion.
    Senator Collins. Finally, since you mentioned DDMAC, I did 
receive a response just this morning from the FDA to the letter 
that we sent last fall.
    Dr. Woodcock. Yes.
    Senator Collins. On the issue of the change in procedure 
delaying the FDA's ability to respond quickly to a misleading 
ad.
    Dr. Woodcock. Yes.
    Senator Collins. We currently have a proliferation of cable 
stations. From what I think you said to Senator Breaux, the 
companies do not have to submit ads in advance, which is 
troubling in some ways because you may be missing a whole lot 
of misleading ads.
    But you are still taking 15 working days or more to work 
out internally the legal issues before such a letter can be 
issued. I think that is a problem because in some cases these 
ads will have run their course. It may be a 2-week media buy 
and if it is taking 15 working days, that is 3 weeks before 
your letter comes out.
    Dr. Woodcock. Well, let me explain again. The companies do 
need to submit the information when it is aired, so we are 
required--now it may be that someone will violate that 
requirement and not submit it, but companies are required to 
submit the broadcast when it is aired.
    Senator Collins. But not prior to its being aired.
    Dr. Woodcock. That is right. Timeliness is an important 
factor. As we said earlier, that is something we are looking 
at. We are going to do everything possible and we can 
prioritize. If we see an ad that we really feel is detrimental 
to the public health, is giving a very bad misimpression or 
unbalanced message, we can act much more quickly.
    Senator Collins. I would just note in closing that the GAO 
came up with two specific examples where the ad campaign for a 
popular selling drug had been run, and terminated before the 
FDA was able to issue its order.
    Dr. Woodcock. Yes.
    Senator Collins. I think we need to have a system that 
prevents that from happening and it seems to me one step would 
be to have submission prior to airing, not when the ad airs.
    Dr. Woodcock. Well, that would likely require statutory 
change.
    Senator Collins. Thank you, Mr. Chairman.
    The Chairman. Susan, thank you and Dr. Woodcock, thank you 
very much. We appreciate you staying on. There may be 
additional questions of you following our next panel. Thank 
you.
    Now let me ask our next panel to come forward and let me 
introduce them as they come. Marjorie Powell, Senior Assistant 
General Counsel at the Pharmaceutical Research and 
Manufacturers of America. Dr. Nancy Nielsen, Speaker of the 
House of Delegates of the American Medical Association and 
Senior Associate Dean of Medical Education at the University of 
Buffalo School of Medicine and Biomedical Science is with us. 
Also testifying will be Dr. Meredith Rosenthal from Harvard 
School of Public Health, who recently published a study on DTC 
advertising. Also--gee, Harvard gets double take today here--
also from Harvard is Dr. Arnold Relman. Dr. Relman is a 
Distinguished Scholar and former Editor of the New England 
Journal of Medicine.
    We thank you all for your patience and your presence here 
today and we will start with Marjorie Powell, Senior Assistant 
General Counsel, the Pharmaceutical Research and Manufacturers 
of America. Marjorie, welcome before the committee.

STATEMENT OF MARJORIE POWELL, SENIOR ASSISTANT GENERAL COUNSEL, 
      PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA

    Ms. Powell. Thank you, Mr. Chairman, members of the 
committee. It is a pleasure to be here. As the chairman said, 
my name is Marjorie Powell. I am the Senior Assistant General 
Counsel at the Pharmaceutical Research and Manufacturers of 
America or PhRMA for short, although those of us from New 
England occasionally are heard to say PhRMA.
    The Chairman. Before you start your testimony let me say 
this. All of your full statements become a part of the record. 
We will ask you to adhere to a 5-minute rule. Thank you.
    Ms. Powell. Thank you. I would actually like to make three 
major points because all of my supporting information is in the 
record.
    First, we think that direct-to-consumer advertising 
encourages patients to talk with their doctors about their 
symptoms, about health conditions, about their current 
treatments. The National Health Council, for example, which is 
an organization that includes the 50 leading patient 
organizations in the country, has said that they think the more 
information that patients have, the more effective they can be 
in working with their doctor to make decisions about their 
health care.
    The FDA's study, which has been described, documents that 
patients think that information in direct-to-consumer 
advertising is helpful. A study by Prevention Magazine in 2002 
reports that 61 million Americans talked with their doctors 
about an advertised medicine and 25 million of those patients 
were diagnosed as having a condition that had not been 
previously diagnosed. There are a number of other studies that 
support this same finding, although the exact figures or 
percentages vary from study to study.
    The information that is presented in direct-to-consumer 
advertising informs patients about available treatments. In 
many cases it informs patients about treatments for diseases 
that were not treatable in the past, therefore encouraging them 
to talk with their doctors. It may inform them about a disease 
that is associated with a symptom that they have but they did 
not associate that with a disease or did not think it was a 
serious symptom.
    They also inform patients about the existence of treatments 
for their diseases, treatments that in some instances doctors 
may not have talked with them about before. For example, a 
recent Health Affairs report of research indicates that 
approximately a third of physicians indicate they do not 
discuss treatments with their patients if they think the 
treatments are not covered by their patient's insurance. We 
think it is important for patients to have information about 
all available treatments, including ones that may not be 
covered. In many instances when the recommended treatment is a 
medicine, particularly a branded medicine, if the patient does 
not have insurance and cannot cover the cost of that medicine, 
all of the PhRMA member companies have patient assistance 
programs that will provide that medicine at no cost and many of 
the companies now have discount card programs as an interim 
until the conference committee resolves differences and both 
houses will pass a Medicare drug benefit; by the way let me 
congratulate you on moving as far as the effort has so far.
    We also think that direct-to-consumer advertising 
encourages patients to take medicines once they have been 
prescribed. There are a number of reports that patients who see 
direct-to-consumer advertising for a drug that they are taking 
continue to take their medicine. In some cases it reminds them 
that they need to take it when they have stopped taking their 
medicine. Given the vast expense within the health care system 
that is caused by patients who receive prescriptions but then 
stop taking their medications, particularly prescriptions for 
chronic conditions where the symptoms are not so severe that 
the patient has a direct incentive to remember to take their 
medication, that it is really important to encourage patient 
compliance.
    A number of the patient advocacy organizations also say 
that when a new medicine is advertised for the condition for 
which they are advocating, they receive an increase in the 
number of phone calls to their 800 line from people asking for 
information about that disease, either for themselves or for 
other people.
    So the direct-to-consumer advertising has a benefit in 
educating patients and the general public about diseases and 
conditions and treatments that are available.
    It is also true that when a patient talks with a physician 
about a drug that they have seen as the subject of direct-to-
consumer advertising, the physician does not automatically 
write a prescription for that medication. In fact, in a large 
number of cases--in fact, I think the FDA figure is 22 
percent--the physician directs the patient to change their 
lifestyle, either improve their diet or stop smoking or 
exercise or some other event.
    We think that--and let me just conclude by saying that in 
this debate it is important to ask some additional questions 
and those would be, how would patients benefit if they were 
less likely to know about new treatment options, if they were 
less likely to report to their physician symptoms that are now 
untreated? What is both the human and the economic costs of 
untreated diseases within our health care system? How is it 
that people who oppose direct-to-consumer advertising propose 
to end the amount of undertreatment of serious conditions?
    We think it is important that patients have information 
about treatments available and that direct-to-consumer 
advertising is one mechanism. Let me stop and I will be pleased 
to answer questions when the panel is finished.
    [The prepared statement of Ms. Powell follows:]
    The Chairman. Ms. Powell, thank you very much.



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    Now let us turn to Dr. Nancy Nielsen, speaker of the House 
of Delegates, the American Medical Association.

 STATEMENT OF NANCY NIELSEN, M.D., PH.D., SPEAKER OF THE HOUSE 
 OF DELEGATES OF THE AMERICAN MEDICAL ASSOCIATION, WASHINGTON, 
                               DC

    Dr. Nielsen. Thank you, Mr. Chairman, and thank you to the 
members of the committee. It is a pleasure to be here.
    I am Nancy Nielsen. I am an internist from Buffalo, NY and 
I am speaker of the House of Delegates of the American Medical 
Association. On behalf of our physician members and our medical 
student members, we are pleased to offer you our perspective on 
this important issue.
    I brought with me some examples but you have already 
referred to them, about the multiplicity of magazine ads. You 
have already heard from both the chair and other members of the 
committee about TV ads. Nobody can help but notice there has 
been a dramatic increase in these numbers.
    Patients see those ads. They then go to their physician and 
they ask for a prescription for a specific drug, even before a 
diagnosis is made. Back in 1998 the AMA developed an ethical 
opinion to help physicians deal responsibly with those kinds of 
ads. We also developed policy to help define what, to us, are 
acceptable direct-to-consumer ads. You have heard that 
mentioned by Dr. Woodcock and by the chair. Our written 
testimony contains the details of our written policy and I will 
not comment further unless there are questions.
    This kind of advertising is legal, it is widespread, and it 
is probably here to stay. That being said, it remains 
controversial and we have some concerns. First, most physicians 
believe that these ads are marketing, not education. The AMA 
absolutely supports patients' access to information about drugs 
but the real question is whether drug advertising designed to 
sell a product provides the type of objective and accurate 
information that patients need.
    What about fair balance and explanation of risks? The print 
ads have to provide the full disclosure but as you, Mr. 
Chairman, mentioned, it is real tough to read. When you go to 
broadcast ads, that is very different. Only the major risks 
have to be mentioned. Remember the girl prancing through the 
field of flowers and ragweed? Do any of you recall the risks 
that were described when that ad was running?
    A 1999 study found that fully one-half of patients 
incorrectly believed that the ads were preapproved by the FDA 
and 43 percent incorrectly believed that only risk-free drugs 
were advertised. These misconceptions may give consumers a 
false sense of security that prescription drugs are risk-free.
    What about the impact on the doctor-patient relationship? 
Consumer surveys suggest that these ads do increase the number 
of visits to physicians, some of which do lead to new diagnoses 
and to a more informed discussion. That is the good news. 
However, these ads also increase demand for specific drugs.
    Last weekend CNN aired a story on a treatment for attention 
deficit disorder in adults. I do not know if any of you saw it. 
There is only one approved drug for this condition. TV and 
radio ads for this drug center around some screening questions 
for consumers. Now hold on and see how you would answer these 
questions. Here are a few of them.
    How often do you feel restless and fidgety? When you have a 
task that requires a lot of thought, how often do you avoid or 
delay getting started? If you answer even sometimes to these 
questions, the ads suggest you have symptoms consistent with 
ADD and a visit to the doctor is recommended. Education or 
advertising? You decide. We have a hotline in the back if 
anybody wants to set up a visit to their physician right away.
    You have heard about some reports in Health Affairs. Let me 
talk about another one that I have not heard mentioned. There 
was a study reported in Health Affairs in which half of 
patients said they would be disappointed if their physician did 
not write the prescription they requested. A quarter said they 
would try to change their physician's mind. A quarter thought 
they might go to another doctor to get the drug and 15 percent 
thought they would change doctors.
    You have heard about the GAO report. The question is the 
increased utilization and spending appropriate? Were these 
drugs underutilized before or is this wasteful spending and 
would less expensive alternatives or no drug at all work just 
as well.
    In conclusion, we have three recommendations for the 
committee. First, there is room to improve the educational 
value of these ads and we urge the pharmaceutical industry to 
follow the AMA's guidelines. Second, more independent research 
on these ads is needed to determine their impact on the 
patient-physical relationship. Third, the FDA must be 
adequately funded by Congress to carry out its oversight role 
and to use enforcement when necessary.
    Thank you for the opportunity to speak before you.
    [The prepared statement of Dr. Nielsen follows:]


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 

    
    The Chairman. Dr. Nielsen, thank you very much.
    Now let us turn to Dr. Meredith Rosenthal from Harvard's 
School of Public Health, who recently published a study on DTC 
advertising.

STATEMENT OF MEREDITH B. ROSENTHAL, PH.D., DEPARTMENT OF HEALTH 
POLICY AND MANAGEMENT, HARVARD SCHOOL OF PUBLIC HEALTH, BOSTON, 
                               MA

    Ms. Rosenthal. Thank you, Chairman Craig, Senator Breaux, 
distinguished committee members. Thank you for inviting me to 
discuss the consequences of direct-to-consumer advertising of 
prescription drugs. I have been asked to summarize the 
scientific literature in this area and highlight key findings 
for policy. I would also like to make note of some important 
missing findings, questions that are not yet answered by 
empirical research.
    At the risk of confusing the record, I am going to use the 
acronym DTCA to keep my comments to a few shorter syllables.
    My review will highlight three main points supported by 
research. First, while DTCA expenditures have increased rapidly 
in recent years, the share of consumers that report asking 
their doctor for an advertised drug and receiving that drug has 
remained quite stable over the same period.
    Second, DTCA clearly increases spending on prescription 
drugs but it is not the primary driver of prescription drug 
spending growth.
    Third, because most of the increase in spending caused by 
DTCA appears to be due to additional use of prescription drugs 
in the advertised class rather than price inflation per se or 
consumers switching to higher-cost brands within a class, the 
most crucial outstanding policy question that I see is what is 
the magnitude of the incremental health benefit obtained by 
patients who seek and obtain treatment as a result of DTCA? 
When I say incremental I think it is important that we should 
keep in mind that the comparison should be what the patient 
would have gotten either in the absence of DTCA if we are 
talking about banning it or under some other model of DTCA. 
That would not necessarily be a generic drug, an older drug. It 
might be nothing. It might be a different brand.
    Among the earliest studies of DTCA are those that rely on 
consumer surveys; you have heard these cited already. Surveys 
conducted by Prevention and Men's Health Magazines, as well as 
the FDA and a number of others have shown that approximately 80 
percent of Americans can recall seeing advertisements for 
prescription drugs. One-quarter to one-third of consumers 
report that they spoke with their physician about the specific 
advertised drug. Roughly 5 percent of consumers surveyed say 
they actually received the drug that they asked for. These 
figure are remarkably similar across surveys and over time.
    The impact of DTCA on use and spending is the subject of 
several recent studies that rely on actual insurance claims or 
sales data, so these data actually reflect the behavior of 
consumers and physicians. A number of studies have found that 
DTCA increases prescription drug spending. Our study, a summary 
of which is included in your packet, funded by the Henry J. 
Kaiser Family Foundation, suggests that DTCA accounted for 
roughly 12 percent of total prescription drug spending growth 
in 2000.
    DTCA by a particular brand name drug increases the size of 
the market for the entire therapeutic class. Moreover, there is 
no evidence that DTCA increases the market share of the 
advertised brand. That is, brands benefit from DTCA by any drug 
within their class in proportion to their existing market 
share.
    In combination, these findings are very important from an 
economist's point of view. We look at this as some evidence 
that it is not a foregone conclusion that DTCA has a negative 
effect on consumer welfare. Because of the fact that there is 
increased use of drugs and we think there may be some positive 
health benefit to that use, it is worth looking further. If we 
saw this was just about shifting market share from drug A to 
drug B that are roughly substitutes, we could sort of close the 
book there.
    In most other markets we would be done and we would say 
that advertising is beneficial here. In health care, clearly 
because of imperfect information and the presence of insurance, 
we need to go further.
    As well, there is no current evidence to suggest that DTCA 
increases prices, although this is admittedly very difficult to 
study. If indeed DTCA has no effect on prices and price 
competition in particular, it stands in contrast to the 
published literature on physician promotion, which has been 
found to reduce competition and increase prices. This fact 
should be heeded, given that DTCA and promotion to physicians 
are substitutes and any constraints on DTCA is likely to give 
rise to increases in promotion to physicians.
    So in summary, I would just like to reiterate that to no 
one's surprise, DTCA increases spending on prescription drugs. 
It does not appear to be the main driver, however. DTCA appears 
to increase spending through increases in utilization for all 
drugs in a therapeutic class, not necessarily by inducing 
consumers to switch from one brand to another. This means that 
DTCA motivates consumers to seek treatment but those decisions 
about what treatment they will actually get when they seek that 
treatment are influenced by other factors, such as physician 
information and health insurance benefit structure.
    Finally, I would like to note again I think the important 
outstanding question that everyone seeks to be pointing to is 
that we need to understand better the magnitude of the health 
effects for people who are using drugs as a result of DTCA. 
There are clearly cases where it is inappropriate and clearly 
cases where this is very needed treatment for chronic illness, 
for deceases in particular that are undertreated, such as 
depression, but the relative magnitude of those two phenomena 
is what is really important here. Thank you.
    [The prepared statement of Ms. Rosenthal follows:]


    [GRAPHICS NOT AVAILABLE IN TIFF FORMATD] 

    
    The Chairman. Doctor, thank you very much.
    Now let us turn to Dr. Arnold Relman, distinguished scholar 
and former editor of the New England Journal of Medicine. 
Doctor, welcome before the committee.

    STATEMENT OF ARNOLD RELMAN, M.D., PROFESSOR EMERITUS OF 
 MEDICINE AND SOCIAL MEDICINE, HARVARD MEDICAL SCHOOL, BOSTON, 
                               MA

    Dr. Relman. Thank you. Mr. Chairman and members of the 
Special Committee, thank you for the invitation to be here. You 
have a copy of a longer version of what I have to say so what I 
am going to do is simply touch on the highlights.
    The total spent on direct-to-consumer ads is now probably 
over $3 billion but that is only a small fraction of the total 
industry expenditure on marketing, advertising and sales 
promotion. You have already heard Dr. Rosenthal cite the 
evidence that these consumer ads nevertheless have an effect on 
patient demand and on prescription drug spending. The exact 
extent I think is open to interpretation of uncertain 
methodology but it clearly has some effect. That is not 
surprising, of course, because common sense dictates that 
industry executives would not be spending so much on direct-to-
consumer advertising were they not convinced that it increased 
their sales.
    I might add parenthetically that Dr. Rosenthal's conclusion 
that it does not necessarily increase the sale of the drug 
being promoted, rather, the class of drugs, I suspect would 
come as a surprise and a disappointment to all those executives 
who spend billions and billions of dollars believing that it 
does.
    The industry argues that DTC ads serve more than purely 
commercial purposes. They say such ads educate the public about 
illnesses and the new medicines available to treat them and 
thus encourage patients to consult physicians for earlier 
diagnosis and treatment, but that is simply the claim of 
business people whose sales are increased by these ads, they 
think, and who therefore hardly can be unbiased.
    I do not know of any hard scientific evidence that would 
pass critical peer review that the information that is 
disseminated in these ads really helps the health care system. 
I really do not and I would challenge the statement that there 
is clear evidence that health care is improved by these ads. 
There is no solid scientific evidence to support that 
contention.
    There are some medical opinions in agreement with the 
industry's contention but they also lack data and unfortunately 
are often tainted by financial support from the pharmaceutical 
industry. I am glad to hear that my colleagues in the AMA 
clearly are skeptical, as they should be, about the medical 
value of these ads.
    When one considers that the majority of direct-to-consumer 
drug ads are now on television and that this means a hasty 30- 
or 60-second spot, it is hard to imagine how useful educational 
information could ever be conveyed in this manner, even if 
these ads were not biased toward a particular product. There 
simply is not time to provide any information about side 
effects or complications, let alone to compare the cost and 
effectiveness of the advertised brand with other available 
drugs or other methods of treatment, which is what good medical 
information would do. That is how we academics in medicine 
define useful education about drugs. You evaluate what is 
available, the pros and the cons, what is worth the money, what 
is safe, what is effective, as compared to everything else that 
you might do. There is none of that in these ads.
    Clearly these ads are intended simply to fix a brand name 
in a patient's mind, with the hope that the patient will then 
ask the doctor about it at the next visit and will influence 
the doctor to write a prescription for it. Actually how often 
that occurs I do not think is important, but that is what the 
advertisers think.
    Given all the above, what can we conclude about direct-to-
consumer advertising? I find little to recommend it and much 
that argues against it, particularly in these times when 
rapidly rising expenditures on prescription drugs are straining 
the budgets of all purchasers.
    In my judgment as a teacher of medicine for over 50 years, 
with a very large experience in medical education and in 
medical consulting, there are lots and lots of patients in the 
United States who are now being overmedicated, dangerously so, 
and take too many medications. I believe that these ads must, 
in part, be responsible. These ads promote only the newest and 
most expensive drugs, many of which are no better than or 
possibly not even as good as older, less expensive generic 
drugs or as effective as simpler, nonpharmaceutical treatments.
    As a physician, I believe that decisions about the use of 
prescription drugs should rest with doctors based on the best 
available scientific knowledge. The education of patients 
should be the responsibility of doctors and of governmental, 
public health and professional organizations.
    I do not see any basis for the industry's assumption that 
they have the responsibility for educating patients or, for 
that matter, for educating doctors. They have no such 
responsibility. They are businessmen. Their job is to sell 
honest products and advertise them honestly. They are not 
educators and they should not pretend that they are.
    I therefore would favor a total ban on direct-to-consumer 
ads. If the law were to prevent such legislation then I would 
advocate at least a return to something like the pre-1997 FDA 
regulatory policy and would require that all DTC ads include 
approved consumer-friendly information. I would also strengthen 
the FDA's capacity to eliminate the delays in reviewing ads, 
which you have heard about.
    I conclude. Prescription drugs simply are not like ordinary 
commercial goods and it is not in the public interest to 
advertise them to consumers as if they were. We need more, not 
less, regulation of consumer ads. Thank you for your attention.
    [The prepared statement of Dr. Relman follows:


    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 

    
    The Chairman. Doctor, thank you very much for that very 
provocative statement. We appreciate it.
    Now let me turn to our panelists for questions. Ms. Powell, 
let me start with you. The question that I would like at least 
your response to because my guess is you have had some 
opportunity to analyze it prior to this hearing--what is 
PhRMA's position regarding AMA's guidelines for DTC 
advertising?
    Ms. Powell. We have looked at the AMA's guidelines on DTC 
advertising and we think that many of them are, in fact, 
consistent with the FDA's guidance on direct-to-consumer 
advertising and many of them represent important public policy. 
We have, however, not actually adopted any kind of formal 
position on what we think our members should include in their 
advertising. We do, of course, encourage our members to provide 
educational information in their advertising and as Ms. 
Woodcock from the FDA said, the vast majority of our members 
do, in fact, submit advertising to FDA for review before that 
advertising goes on the air.
    We do think it is very important, of course, that all the 
ads comply with the FDA requirements and one of those 
requirements--I think I am correct--is that the advertisement 
has to indicate that this is a prescription drug and that the 
patient should seek additional information from their physician 
or other health care provider about both risks and benefits 
because the decision does remain with the physician about what 
treatment a patient should receive.
    The Chairman. Is there any consideration by PhRMA for 
developing or adopting principles, standards or guidelines not 
unlike what AMA is proposing?
    Ms. Powell. The AMA has actually talked with members of the 
PhRMA board of directors about that issue. It is something that 
comes up periodically. I do have to tell you realistically that 
right at the moment, PhRMA is focused on some other issues that 
have already been mentioned here and this would not be an 
immediate high priority but I certainly would be willing to go 
back to our executive officers and remind them of that request 
from the AMA.
    The Chairman. Well, I will only tell you that I think many 
of us in Congress look at the whole and not the pieces as it 
relates to prescription drugs and as government enters in and 
becomes much more the participant, cost factors, cost of total 
program is going to be an increasing focus of this Congress, I 
would guess, and future Congresses to come. I think that is a 
reasonable observation.
    Dr. Nielsen, what is the impact of this country's third-
party payor system on doctors' prescribing habits?
    Dr. Nielsen. It is enormous. It has been alluded to 
actually in the study that just came out a week ago cited by 
Ms. Powell where physicians do not dangle in front of their 
patients therapeutic options that are unavailable to them. In 
this country, for better or for worse, and Congress is right on 
the front line on this one, for most of us unless we are 
independently wealthy, if something is not covered as a covered 
benefit by our health insurance, we cannot afford it and we 
cannot get it. So that is an issue. Third-party payers have had 
a tremendous impact.
    Part of the impact may relate to what Dr. Rosenthal 
mentioned, as well. Patients come in seeking a specific drug 
because of an ad that they have seen. They may not be able to 
get that drug because it is not on the formulary of their 
third-party payor. So I would say that that is indeed a big 
issue.
    The Chairman. Do you believe the fact that someone else is 
paying for a patient's drug influences the behavior of either 
the patient or the physician in choosing the drug to be used?
    Dr. Nielsen. Yes. Yes to both.
    The Chairman. Thank you.
    This will be my last question in this round. Dr. Relman, in 
your testimony you stated ``There is no scientific evidence to 
support the contention that DTC advertising encourages people 
to consult physicians for earlier diagnoses or treatment.'' How 
do you respond to the surveys by FDA and Prevention Magazine 
that indicate that as many as 20 million people visited with 
their doctor about a condition for the first time as a result 
of DTC advertising?
    Dr. Relman. Senator, one of the basic rules of all good 
epidemiologic research is that there be adequate controls. 
There are simply no controls for all such studies. We do not 
know in any systematic, quantitative way what the behavior 
would be of patients who never heard about these ads for the 
simple reason that there is hardly anybody who is conscious in 
America these days who has not heard about these ads.
    If you look at the data which says well, these ads are 
responsible for the behavior, it will not pass muster. It would 
not have been accepted for the New England Journal of Medicine 
or any other really rigorously peer-reviewed journal.
    The Chairman. Well, Dr. Woodcock, how do you respond to 
that?
    Dr. Woodcock. It would be a challenge in today's 
environment, as Dr. Relman just alluded to, to design such a 
study. It would be difficult to take a segment of our 
population and refuse to allow them access to prescription drug 
ads so that we could determine what their behavior is. There 
are methodologic difficulties in getting to the level of 
scientific proof that Dr. Relman is looking for.
    The Chairman. Thank you.
    Let me turn to my colleague, Senator Breaux.
    Senator Breaux. Thank you, and thank all the panel members 
for excellent testimony.
    Dr. Woodcock, since you are back, does the FDA regulate 
advertising to doctors of pharmaceuticals?
    Dr. Woodcock. Yes.
    Senator Breaux. In what way?
    Dr. Woodcock. We have standards for all the information 
that goes to physicians. As I said in my testimony, it is the 
same standards and regulations that apply to consumers. The 
companies must submit their written information and other 
information, even the pens and all the promotional materials 
that they use, to the FDA at the time they are circulated to 
physicians.
    It is more difficult for us to regulate and really have 
effective oversight of the verbal exchanges that go on between 
the detailers and the physicians.
    Senator Breaux. Dr. Nielsen, would AMA support a 
prohibition on pharmaceuticals advertising to doctors?
    Dr. Nielsen. No, but any doctor who gets all their 
information about a drug from a drug salesman is a fool.
    Senator Breaux. The division of the expenditures on 
promotional spending shows that the spending that is labeled 
doctor's office detailing, can anybody tell me what that 
includes? What is doctor's office detailing? It is over $4 
billion back in 2000.
    Dr. Nielsen. Well, you heard Senator Stabenow address it. 
She said she spoke with her physician. Let me tell you what 
happened in my office. Let me immediately say this is not about 
doctors versus the pharmaceutical companies. I mean we need 
these products. They are life-improving; they are life-saving. 
So it is really not about----
    Senator Breaux. I understand. But what is doctor's office 
detailing?
    Dr. Nielsen. What really happens is the drug reps come to 
the doctor's office and they want face time with the doctor. 
That is what it is--sitting down, explaining what the newest 
drug is, what the side effect profile is, and usually offering 
free samples for the physician to try with their patients. That 
is what it means.
    Senator Breaux. Dr. Woodcock, you had a problem?
    Dr. Woodcock. Yes, I was going to add to that or elaborate. 
The sampling, providing the samples, which is costed out at the 
market value of the samples, is actually the largest segment of 
drug promotion. It is the largest proportion of drug promotion 
and this may affect what Dr. Rosenthal was talking about. A 
patient may come in requesting one drug and if the doctor has 
samples of another, free samples of another drug, the patient 
will start on that other drug.
    So that is also a very powerful mechanism by which patients 
can be initiated on a certain therapy, which they often might 
stay on, and that is a very high expenditure in the promotion 
realm.
    Senator Breaux. It seems to me that no consumer can write 
their own prescription. Unless they are a doctor, none of them 
can legally write their own prescription. So a consumer who 
sees an ad for a particular pharmaceutical and may not clearly 
understand the potential side effects of that drug, whether 
that particular drug is suitable for their particular 
condition, that individual consumer still has to go to the 
doctor. The doctor is the gatekeeper. Only the doctor can write 
a prescription that is suitable for that individual patient.
    So I have less of a concern about the advertising, 
detailing, all the medical consequences of a drug that is 
advertised because I know that behind that advertisement and 
before the consumer can ever get the drug he has to go through 
the gatekeeper. The doctor looks at that patient. If the doctor 
has a patient that says I would like this the doctor makes a 
medical decision whether or not that drug is suitable for you.
    Is that not the protection that consumers have? No consumer 
can write a prescription.
    Dr. Nielsen. That is correct. That is absolutely correct. 
Doctors do do that, but remember the study that said one-
quarter of patients whose doctors did not give them the drug 
would go to another doctor to try to get it and 15 percent of 
them would totally change doctors.
    Senator Breaux. That is important but Dr. Rosenthal also 
points out that about 80 percent of consumers remember a drug 
ad and of the 80 percent that even remember a drug ad, 
somewhere between a fourth or a third ever request their doctor 
to give them that particular pharmaceutical. Then the doctor 
responds positively to that request only 5 percent of the time. 
I would be concerned that if my advertising was only getting my 
product requested 5 percent of the time, I would say gee, I had 
better get a new advertising agency.
    So it does not seem to me from what Dr. Rosenthal said that 
you have a real problem if only 80 percent remember the ads and 
only a third to a fourth of them ever make a request and then 
only about 5 percent of those that make the request ever get 
what they requested. That means 95 percent are either turned 
down by their doctor or presumably would be turned down by 
another doctor who would make the same medical decision that 
this was not the appropriate prescription for that particular 
person's condition.
    So I do not know that you have a problem with direct-to-
consumer advertising in an overrequest of a particular drug 
that has been advertised with a connected compliance with that 
request by physicians. Is that your compilation of the studies 
you have looked at? Am I correct in reading it like that?
    Ms. Rosenthal. You are correct. I think in the overall 
picture that you have painted, that is the impression I tried 
to leave. I just want to correct perhaps your impression of 
those consumer survey numbers. The 80, a quarter to a third and 
5 are all off the same denominator, so talking about all 
surveyed consumers. So those numbers could be translated, but 
it is 5 percent of all surveyed consumers say they followed 
through the whole chain. They saw the ad, they went to their 
doctor, asked about the drug, and received the drug.
    But I think that you make a very important point, that many 
other factors intervene before a consumer actually gets to a 
decisionmaking process where they can purchase a prescription.
    Senator Breaux. I have one other question, if I may.
    Ms. Powell, the argument is that if the drug companies are 
spending $2.5-3 billion annually on advertising that somehow if 
you were not doing that that somehow drugs would be $2.5-3 
billion annually less expensive. Now I do not know that that 
would be correct. Can you comment on that? This is maybe not 
your area but it would seem to me that to a large extent if we 
eliminated direct-to-consumer advertising and you saved $3 
billion, I doubt whether the companies would automatically 
reduce the price of drugs by $3 billion. You would probably 
look at different forms of advertising. You may hire more 
people to do research and development. You may do a lot of 
things with that other than reduce the price of the retail 
pharmaceuticals. I do not know if this is your area or not but 
can you comment on that?
    Ms. Powell. Well, the information that we have, which is 
collected by IMS Health, on the allocation of----
    Senator Breaux. IMS Health, just for the record?
    Ms. Powell. IMS Health is a third-party independent 
organization which collects information and then there are a 
number of other groups that look at drug spending information. 
We do not, as a trade association, actually collect drug 
marketing information but the information that we have is that 
the majority of the money that is now spent on broadcast 
advertising or print advertising to consumers is money that had 
been spent on either marketing to physicians by sending sales 
people to their offices or money that was spent on advertising 
in professional journals.
    So the money has not come from other research and 
development or has not come from price increases but has been 
pulled from other marketing activities. I would have to presume 
that companies, if they were prohibited from advertising 
directly to consumers, would go back to advertising not only to 
physicians, but also let me point out that everybody else 
within the physician's office may be giving information to 
patients about how to use their medications and they need 
information about what the contraindications or the risks would 
be, as well.
    Senator Breaux. Thank you, Mr. Chairman.
    The Chairman. Senator Breaux, thank you.
    Senator Stabenow.
    Senator Stabenow. Thank you, Mr. Chairman, and thank you to 
all the panelists. I have many questions, as all who are 
listening to this will have.
    I will just start by saying I think it is unfortunate if 
we, in fact, eliminate advertising and prices would not go 
down. That is a very unfortunate thing because I think that the 
biggest risk to American consumers today is the fact that we 
are paying such high prices and Americans, in fact, pay the 
highest prices in the world, even though we greatly invest in 
research and development and support of the industry, which I 
support.
    According to a July 2003 Families USA report, the prices of 
the 50 most prescribed drugs to seniors rose, on average, 
nearly three and one-half times the rate of inflation last 
year. I believe that is an incremental cause of concern to 
people's health, their ability to be able to have access to 
medicine.
    Regarding advertising, I believe in public information, 
consumer information in many, many ways and support many 
efforts for people to be well informed, for all of us to be 
well informed as consumers, but I wondered if any of the 
panelists might want to speak from not just a statistical 
standpoint but from common sense, common sense. This is 
something that the average person does not need a study to look 
at; they just need to turn on their television set. It is very 
clear what is happening.
    What I think is important to reemphasize is that we are not 
seeing ads on television with words from a physician explaining 
the pros and cons of various kinds of ailments and what people 
should think about in going to the physician's office and what 
questions to ask. We are seeing the woman in the field, the 
lilies. When we look at all of the possible things we would 
educate people on, certainly Viagra is educating us over and 
over again about a series of things through pretty pictures.
    Again I do not mean to pick on Vioxx but since they have 
huge advertising, we are seeing just all kinds of pretty 
pictures. We are not seeing objective information explaining to 
people the differences in products and that is for a good sound 
business reason--folks who advertise want to make sure their 
brand name is out there and they are trying to have us all buy 
their product, and that is the American way and I think we 
should not pretend that there is anything else going on here 
other than the attempt to advertise in order to increase their 
share of the market.
    The question I have though, relates to a supposition that 
we are educating people when, in fact, the majority of drugs 
that are being advertised are for things that millions of 
people have because you want larger market share; you want more 
people buying your product, as opposed to advertising regarding 
orphan drugs or rare diseases, where that person sitting at 
home may, in fact--they know they have a headache; they may 
know they are a little tired; they may know that they are not 
feeling well but may not be aware of a rare disease, may not be 
aware of something that involves an orphan drug. Yet that is 
not what we are seeing on telephone. We are not seeing 
advertisements or educational promotions for those things that 
people may not know about. We are seeing it for the most 
common, the painkiller, even though on Peter Jennings they 
indicated on a show last year that--again unfortunately to pick 
on Vioxx--Vioxx has not been proven to be any more effective at 
treating pain than tried and true over-the-counter drugs, such 
as Alleve and Advil, but yet that is what we are seeing on 
television.
    So I wonder if any of you might speak to if you were going 
to put together an advertising campaign that encourage 
consumers and is helpful in terms of health education, what 
would you do and what about the fact that some of the most 
important rare diseases that we as consumers should learn about 
are not advertised because it is not, I assume, beneficial from 
a profit standpoint to advertise that? Dr. Nielsen and then Dr. 
Relman?
    Dr. Nielsen. I will take a stab at it. I think it is 
unrealistic to expect a pharmaceutical manufacturer to be 
altruistic primarily and I think that is just an unrealistic 
expectation. On the other hand, we wish they did more of that, 
obviously. The orphan drugs are a problem because they are very 
high cost and the manufacturers are not going to reap a profit 
from them. So you understand why they do not choose to 
advertise those.
    But let me go back to a little bit different aspect of what 
you are getting at because I think you have hit on something 
really important. We as physicians do appreciate when there is 
an educational part of the ads, and the way you go about that 
is make the ad disease-specific. Give screening questions for 
depression. If someone has not sought treatment for depression 
perhaps they will indeed seek such treatment. We like those ads 
and, in fact, that is the very first of our principles in our 
policy, to keep it disease specific when possible and to be 
educational.
    But I have to say that while I would love to believe that 
we would encourage them or maybe even mandate them to spend a 
little bit of their money on this altruistic sort of 
maneuvering, I doubt that it fits into the big scheme of what 
their advertising is going to be.
    Senator Stabenow. I appreciate that. Obviously I understand 
that and agree with that. It is a business. I think we should 
just recognize that in the context of all of our discussions, 
that it is a business decision and I very much appreciate that. 
Unfortunately, it is a business decision based on a product 
that may be life or death to someone, so I think it is a 
different product than other products that people can choose to 
purchase or not purchase.
    Yes, Dr. Relman.
    Dr. Relman. Senator Stabenow, I would like to add to what 
my colleague Dr. Nielsen said. Of course the pharmaceutical 
manufacturers are business people and they are not expected to 
be philanthropists. They are expected to want to sell their 
products and that is what they do. In response to Senator 
Breaux's question, it is more than $3 billion now. It passed $3 
billion and that $3 billion is paid for by the patients who buy 
the drugs.
    Now the way he framed the question, would they go out and 
lower their prices by $3 billion? No, they will not do that but 
clearly in order for them to maintain their expected level of 
profits, which are enormous, they have to price accordingly and 
part of their expense, which reduces their profit, is the $3 
billion plus for direct-to-consumer ads.
    But the point I want to make here is that Senator Breaux is 
absolutely right. The main responsibility for the proper 
prescribing of drugs and for the proper use of drugs and the 
evaluation of drugs rests with our profession. Doctors are the 
only ones really qualified to know what is worth the money and 
what is not, what works in a particular case or in general, as 
compared with all the other choices that are available. Doctors 
should advise patients about that.
    Unfortunately, however, they do not do it enough. The 
reason is quite simple. The pharmaceutical industry spends so 
much money ``educating doctors'' as to what they ought to think 
about the newest drugs, and on being nice to doctors. There are 
many different ways in which the pharmaceutical industry 
influences the doctor's professional judgment. It is too bad; 
it is a disgrace. I feel embarrassed for our profession that we 
allow it to happen.
    The pharmaceutical industry that says well, they spend more 
on R&D than on advertising and marketing and promotion than 
they do on R&D is simply not telling the truth. Look at the SEC 
filings. They say that on the average, 35 percent of their 
income is sales promotion and administration. They do not want 
to separate out what they call administration but one major 
pharmaceutical company does; that is Novartis. They list their 
administrative costs separately and that is 5 percent, and 
common sense tells you that is about the right kind of number.
    So what we are seeing is that the pharmaceutical industry, 
which now is selling about $200 billion worth of drugs this 
year, is spending roughly 30 percent, or $60 billion, on 
marketing. That is much more than they admit to, but it 
includes the enormous amount of money they spend on an 
estimated 314,000 ``educational'' occasions when the 
pharmaceutical industry sponsors meetings and seminars and 
conferences and symposia. They spend a huge amount of money and 
most of that goes to influencing the opinion of doctors.
    Unfortunately, there are very few professors of medicine 
who are teaching the students not to pay attention to that. It 
is very hard when people are so nice to you and want to give 
you all these goodies free and give you free samples for your 
needy patients, and so on; it is very hard not to pay attention 
to the pharmaceutical industry. But that is the secret and that 
is the dirty secret of our profession, that they are kept by 
the pharmaceutical industry and that dulls their willingness to 
be critical about what is really worth the money and what is 
not.
    Senator Stabenow. Mr. Chairman, thank you. I would just ask 
that we consider holding a hearing on the broader marketing 
issues. I think it is a worthy discussion to have. I would urge 
that we consider that and understand again from my own 
physician, who is a person of great integrity who talks about 
the daily and weekly pressures on her and the opportunities for 
computers and gifts and all kinds of things that constantly 
come that have a component related to that as it relates to 
marketing for the industry. I think that the biggest concern I 
have had is the increased pressure or requests that doctors 
receive to have the drug rep in the examining rooms, which I 
find extremely concerning.
    Dr. Nielsen. Senator Stabenow, you anticipated just what I 
was going to say. We just passed a resolution about that at our 
last meeting in June. I will say the AMA not only has ethical 
guidelines for how to evaluate direct-to-consumer ads but we 
also have ethical guidelines for our own members for how they 
intersect with the pharmaceutical industry and we sincerely 
hope that they will follow those.
    Senator Stabenow. Thank you. Thank you, Mr. Chairman.
    Dr. Relman. Unfortunately, those guidelines are voluntary.
    The Chairman. Let me turn to our colleague from Delaware, 
Senator Tom Carper, who has joined us.
    Senator Carper. Twice.
    The Chairman. Twice you have and are you here to stay now?
    Senator Carper. Not for long, no.
    The Chairman. Not for long, all right. Do you have any 
questions for our panelists?
    Senator Carper. Actually, I do.
    I want to thank you all for being here today and for your 
testimony. Most of my colleagues have a lot going on today; you 
probably do, too. You are nice to spend your morning with us.
    What would probably be most helpful to me in the short time 
that I have is to ask you a question or some questions. There 
are some things that you agree on with respect to direct-to-
consumer advertising and there are probably some things you do 
not agree on. Where do you agree? Where are the common points 
of agreement that you have stumbled across during the course of 
this discussion this morning? I do not care who goes first.
    Dr. Nielsen. Let me start. I think we agree that education 
of the public is a good thing and educating them about possible 
conditions that they might not know about is a good thing, so I 
think there is not anybody around the table that would disagree 
about that one.
    I can speak for myself. I believe and the AMA believes that 
the FDA is doing a good job. They need more resources. I will 
let Dr. Woodcock expand on that, but we do believe that they 
have worked hard to try to make sure that there are not 
excesses in some of the broadcast media and certainly the print 
media.
    So let me start with that and ask the other colleagues 
around the table what we agree on. I could give you a long list 
of what we do not agree on.
    Dr. Relman. I think everybody agrees that education is a 
good thing. Nobody can argue that consumers should not have as 
much information as they can usefully use. The question is not 
whether education is a good thing for consumers. The question 
is who should have that responsibility for giving them the kind 
of education they need.
    Now as a professional educator, my idea of education has 
not the remotest resemblance to the kind of drivel that is put 
out in the ads. It is not education. It is marketing. So the 
question is who should do that? Then we would differ. The 
industry thinks we should do it--we, the industry, should do 
it. They say that. If we do not educate doctors in continuing 
medical education, who is going to educate the doctors? That is 
absurd. That is clearly a professional educational 
responsibility.
    I believe that doctors and their professional 
organizations, as well as public health organizations, and 
government organizations, that have the facts and would be 
dispassionate and unbiased in serving the public interest 
should be the educators of our patients. The pharmaceutical 
industry simply doesn't belong there.
    That is why I am so mad at our profession for allowing the 
pharmaceutical industry to pretend that they are our educators, 
and our patients too. They are not. They are our seducers.
    Senator Carper. Well, that is not a word we hear every day 
here in hearings, not lately.
    Ms. Powell.
    Ms. Powell. Senator, if I could respond, I think that all 
of the PhRMA members would agree that education is important 
and that FDA regulation of direct-to-consumer advertising and 
physician advertising or education or marketing is appropriate. 
We have always supported funding for FDA that is at least equal 
to and in many instances greater than the administration has 
asked for or Members of Congress have been willing to fund. We 
think it is a vital agency and one that is fully worthy of 
support.
    We think that the FDA regulations are appropriate in 
providing balance between the statement of risk and the 
statement of benefits in both direct-to-consumer advertising 
and in print advertising, although personally I would have to 
agree that some of the print advertising statements require not 
only the bifocals but also more of a medical education than I 
have, but many of our companies are moving to make that much 
more informative to the nonmedical consumer.
    We also think that it is really important that members of 
the public become aware of diseases that are underdiagnosed and 
there are a great many of them, some of which are the subject 
of direct-to-consumer advertising. For example, there are many, 
many people with high blood pressure. I think the estimate is 
30 million people with high blood pressure who are not 
diagnosed. There are people with high cholesterol, people with 
diabetes who are not diagnosed, and we think that direct-to-
consumer advertising is helpful in getting those people in to 
see a physician.
    We also think that physicians or other prescribers if a 
state allows, for example, a nurse-practitioner to prescribe 
some subset of drugs, are the appropriate people to be making 
the decision about whether a patient needs and should have this 
drug, another drug, or any drug at all, and that is why we note 
that many physicians first say, have you tried diet and 
exercise? In fact, in many instances FDA requires the 
advertisements to include that information.
    Senator Carper. Thank you.
    Ms. Rosenthal, Dr. Woodcock.
    Ms. Rosenthal. Senator Carper, may I just add? I was 
actually struck by just how much common information we all drew 
upon in our written testimonies and how we all took different 
interpretations of the same numbers, all the same studies.
    Senator Carper. We sometimes do that, too.
    Ms. Rosenthal. I would say for those of us who are able to 
express the opinion, I think we all agree that marketing is not 
education. I think we all agree on the general direction of the 
impact of DTCA, that it is increasing spending, increasing use, 
and that we probably do not need too much more information to 
understand that that is an important effect.
    I think where we disagree is whether the evidence is really 
all in for us to make a decision on whether the benefits exceed 
the costs or vice versa and I would suggest that the evidence 
is not in and that further research is needed to understand 
where the health benefits may be real and where they may result 
in waste in the system.
    Senator Carper. Thanks.
    Dr. Woodcock, you can give the benediction if you want.
    Dr. Woodcock. I think the classic, I believe, is true, what 
Dr. Rosenthal just said. We do not believe the evidence is all 
in. There needs to be more independent research carried on in 
this area on these specific questions that you have. What is 
the public health impact? What is the economic impact to 
consumers and to the health care system, and so forth? I do not 
think we have enough information. It has not been that long and 
it is in a changing environment where other things have 
changed, as well, such as the advent of managed care, at the 
same time. I think even with such expert researchers as Dr. 
Rosenthal, it is very difficult to sort out a lot of these 
factors.
    Senator Carper. Thank you all.
    Mr. Chairman, I do not know that it is going to answer the 
question of what our course should be but that is pretty good 
input here and I want to commend you and our staffs for putting 
this together. Real timely discussion on a real important 
issue.
    I say that as a son of a mom who turns 81 years old next 
month and who has Alzheimer's disease, congestive health 
failure, and all kinds of maladies. The kind of education that 
my mom would glean, even in the years before we had to put her 
in a health facility, her ability to sit in front of a TV or 
read a print advertisement and to be able to really take away 
from that what she needs to know was limited and has been for 
some time.
    On the other hand, there are other people who at that age 
are doing just fine and they can really glean the educational 
information they need from a variety of disparate sources. 
Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    Let me thank all of you for your time with us today and 
your testimony and your involvement in this issue. I might 
suggest that at least it is my observation that this is an 
issue that will not go away and it will not go away for a very 
important reason--your taxpayers have just become involved in 
it. As agents of America's taxpayers, we will have a fiduciary 
responsibility and that will be, as we have in the past with 
Medicare, to begin to micromanage that portion of the 
pharmaceutical market that we affect by the programs that we 
are now developing. That micromanagement will come with, I 
would trust, reasonable and effective oversight that will 
ultimately determine different subsets of policy that Congress 
will prescribe to this program and to this public benefit.
    I have watched in the past. It is not that we are good at 
it; it is just that we do it because we are the board of 
directors. Certainly that was true of Medicare when, in fact, 
costs kept going up as to the given practice we were leveraging 
down those costs because we capped a certain amount of money on 
an annualized basis and tried to fit America's Medicare 
population into it.
    That could well happen here and as a result of that, while 
I know that many in the pharmaceutical industry have applauded 
our entry into this health care arena, my suggestion to that 
industry is that the magnifying glass has just come out. We 
will read the fine print to attempt to understand why these 
costs, are rising. Recognizing at the same time the tremendous 
benefit that the American consumer from a health care 
standpoint gets from today's modern medicine and 
pharmaceuticals being at the cutting edge of that modernness, 
if you will, and to the health care of our country.
    Dr. Relman, you are before us today at 80 years of age?
    Dr. Relman. Yes, sir. Yes, I am.
    The Chairman. I think that is not only remarkable; it is 
now becoming normal.
    Dr. Relman. I hope so.
    The Chairman. I just turned 58 Sunday and I am trusting 
that at 80 years of age I will not be here--I do not want to be 
here at 80 years of age--but that I will still remain active 
and involved, as many of our aging Americans are. I noticed 
that--or I should not say I noticed it; Senator Breaux noticed 
that in your resume and we were both commenting that you are a 
very youthful, involved 80-year-old, in part probably because 
of your genes but also it could well be because of modern 
health care and your understanding of it.
    We thank you all very much. The committee will stand 
adjourned.
    [Whereupon, 1 p.m., the committee was adjourned.]





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