Pros and cons to a DTC ban, says CBO

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How much of an impact would a two-year moratorium on consumer advertising of new drugs have on drug pricing and public health? Not much, and it could go both ways, said the Congressional Budget Office, which ran the numbers and gamed out the likely effects of such a measure.

The CBO report, titled “Potential Effects of a Ban on Direct-to-Consumer Advertising of New Prescription Drugs,” concluded that because branded drugs, and new ones in particular, comprise such a small slice of the retail market for prescription drugs, the financial impact of an ad ban would be minimal. Moreover, the nonpartisan Congressional numbers-crunchers noted, those drugs coming to market in recent years have tended to be less mass-market, which has led to diminished spending on DTC advertising.

“Nevertheless, the impact on sales and use of individual drugs could be substantial because a number of changes could occur in response to a moratorium on advertising to consumers,” said the report, citing the likelihood of:

  • A shift in spending towards professional marketing, including detailing, professional meetings and journal ads, to compensate – particularly for those products with close competitors – or, for those without competitors, unbranded advertising
  • Fewer prescriptions for drugs that would have otherwise been advertised, which could have plusses – lower prices and fewer unexpected serious side effects – and minuses, such as fewer people seeking treatment and patterns of serious side effects going undetected longer.
  • A ban creating a disincentive to drug company innovation by making novel, first-in-class drugs that typically receive heavy promotion much less profitable.

“Although it would allow more time for possible safety problems with some drugs to be uncovered and to become widely known, some individuals who would benefit from a new drug might be unaware of its availability and not seek treatment in the absence of consumer advertising,” blogged CBO director Douglas Elmendorf. “Thus, the health effects of a moratorium would depend on whether the benefits of fewer unexpected adverse events were larger than the health costs of possibly reduced use of new and effective drugs.”
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