To dial down DTC, let companies collaborate on ads, says ex-Merck exec

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A former Merck exec says it's time to wind down a product advertising arms race that he says hurts pharma firms more than it helps them. In its place, he proposes a law allowing companies with brands in competitive categories to collaborate on unbranded ads – essentially disease advertising that informs consumers about an illness and advises them that there are medical treatments available.

Ian Spatz, who now works for the healthcare practice of high-powered Washington law firm Manatt, Phelps & Phillips and operates his own consultancy, Rock Creek Policy Group, left Merck two years ago as VP global health policy. Spatz penned a New York Times op-ed piece arguing that “We've reached a point where the drug companies may be looking for a way to change the system.”

“While big pharmas belief in advertising benefits – both for their finances and for their customers' health – remains strong, direct-to-consumer ads are expensive, and companies often buy them merely to blunt the impact of their competitors' ads,” wrote Spatz, who writes a column for the RPM Report. “In addition, many drug company chief executives recognize that the FDA's 1997 decision to allow the ads has, inadvertently, caused the public to view the industry as focused no longer on research but on sales.”

However, pharmas have painted themselves into a corner with successful defenses of DTC on First Amendment grounds, says Spatz, and competitive pressures make advertising a necessity in many categories. Better, then, that companies be allowed to collaborate on unbranded ads, thereby saving money and avoiding a reputation hit. But that would require Congress to carve out an exemption in antitrust law. With PDUFA reauthorization approaching, Spatz told MM&M, there's a window of opportunity to do just that.

“The goal of this is to provide another avenue,” said Spatz. “Most ads today operate essentially as disease awareness ads, tending to help everybody in the category and not just the product advertised. If three or four competitors in a class of medicines could negotiate something, it could give them the option to say all in or none in.”

Spatz said he hasn't broached his proposal with any of his pharma clients or his old colleagues at Merck. “This is just me speaking in my own voice,” he said.

Arnie Friede, of Friede FDA Law, said “It's a theory that probably deserves empirical study and evaluation.” However, Friede added, “it is not entirely clear that unbranded messages, even if collaboratively funded by companies without potential anti-trust liability, would produce the same benefits while at the same time avoiding most of the negatives associated with branded ads.”

Coalition for Healthcare Communication executive director John Kamp called it "Simply a naïve idea, ignoring the realities of a competitive marketplace and the value of multiple products in a category -- and let's not forget the First Amendment."

Former FDA associate commissioner Peter Pitts also pooh-poohed the plan. “Not gonna happen,” quipped Pitts, “and if it did, it wouldn't be funded to any relevant levels.” Besides, he added, “Isn't this what PhRMA is for?”

It's a truism among many ad agencies that disease awareness advertising lifts all boats, so to speak, and that it's therefore only effective for clients with the sole drug in a category, or for those with a prohibitive lead in market share. And yet, unbranded advertising continues in some highly competitive categories where there are large numbers of undiagnosed and untreated sufferers.

“For many chronic conditions, the real issue is underuse of effective medicines,” Spatz said in his Op-Ed, arguing that cooperation between companies would deliver “unbiased information about the medical conditions we care about, and encouragement to seek out the medicines and vaccines that can help us maintain and improve our health.”
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