Friday, July 17, 2009

CNBC and A DTC Ban?

Source: DTC Perspectives
(Issue 366 July 17, 2009)
Written by Bob Ehrlich, Chairman DTC Perspectives, Inc.

I regularly watch CNBC in my home office as I sit and write about or study DTC issues. The two activities are not related since I watch CNBC to track my investments(mostly energy) not to find DTC information. Today, on 7/15, I was unpleasantly surprised around 2:30 pm. Erin Burnett, an anchor I usually find very competent and one of their best, decided to ask some guest Congressmen to comment on some ideas to reform health care. She showed each idea as a chart that was stated in a problem solution format and promoted these ideas as specific ways to save money. I assume these are ideas she or her producers developed themselves or read about. The first idea was to end obesity as a covered anti-discrimination category under the disabilities act allowing employers to “encourage” weight loss. The second was to mandate living wills so people can choose to die earlier and avoid costly life maintenance procedures in those final few months.

The third idea was to ban DTC. Burnett said it would save $4 billion a year and end the practice of encouraging expensive brands over generics. She said it was outrageous that drugs are advertised. I was expecting big ideas on cost savings so I was shocked that DTC would make CNBC’s list. Ms. Burnett said jokingly we need to kill all the lobbyists since they inhibit change.

Ms. Burnett then posited her DTC cost saving idea to a Republican and Democratic Congressman. Would they ban DTC she asked? Democrat Frank Pallone said no. His rationale was very pragmatic. He tried in the past and said First Amendment and media company lobbying made that a no go. The Republican, John Fleming, a practicing M.D. said he feels we should not ban DTC advertising because it brings in people who are then diagnosed and educated on important medical conditions. I was relieved that a frequent industry critic like Pallone had put a ban on DTC off the table on both theoretical free speech grounds and very pragmatic media company constituent lobbying grounds. I sensed Frank Pallone has had enough of the DTC ban discussion for quite a while. The latest reform bill out of Congress does not have punitive tax treatment of DTC in the bill. I suspect the lobbyists used the First Amendment argument to discourage that idea.

Ms. Burnett seemed annoyed that such a practice could not be banned. First she needs to understand that banning DTC would not save $4 billion. Drug companies would not return that money to consumers but instead use it for other promotion or to add to profit for shareholders. Second, she assumes DTC leads to choosing branded drugs over equally effective generics. In fact she asked the Congressmen if generic Lipitor is worth using as a preventative. There is no generic Lipitor and her lack of awareness indicates the problem. Brands are usually prescribed because they are improvements over generics. Most doctors and most patients want to use generics when they become available. It is just that many of the newest medicines are not available as generics. It is true that some brands are no better than older versions available as generics. That cost/benefit decision is up to the doctor and of course the patient. DTC does not make a doctor or consumer choose a brand over a generic.

Ms. Burnett, by discussing DTC as one of three big cost saving ideas, once again shows how the media over plays the impact of drug advertising. That $4 billion spent is about 1.5% of annual drug sales in America. It adds about $8 billion in sales incrementally based on an ROI of 2 to 1. That $8 billion motivated by DTC is less than one third of one percent of our $2.4 trillion annual health care spending. DTC is not a cost problem in our health care system. It is rounding error at most. I keep telling the critics that DTC is an effective but minor promotional tactic. Just because you see it in prime time does not mean it is important. It is very important to me, ad agencies, media companies, pharma marketers, managed care but not to the health care system overall. Highly visible does not always mean highly important.

DTC is just one small part of the prescription drug information system, albeit information meant to sell more of the advertised drug. Do you really think the government plan currently proposed will provide only information meant in the best interests of its patients? No, that system will try to save cost by promoting cheap drugs that are adequate, not necessarily the best. DTC is designed to offer alternative information that is as subjective as government information will likely be. No information source is totally objective, as everyone has an agenda. Government wants to save money; insurance companies want to add to profit, doctors are influenced by habit, detail reps, insurers or peers. No one is unbiased so therefore consumers must take the final decision in their own hands after evaluating multiple points of view. A ban on DTC will just remove a portion of that biased information, leaving the cost mavens to push cheaper, but perhaps less effective drugs.

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