News Analysis: Drug firms demand right to advertise

News Analysis: Companies say: You can do it in cyberspace, so why can't you do it on TV?

THE IMMINENT launch of a new blockbuster drug by Smith-Kline Beecham is set to reopen the long-standing debate over the advertising of medicines on television and newspapers.

The UK group is expected to receive regulatory approval from the US authorities for Avandia, a revolutionary new treatment for diabetes, at the end of the month. The drug, believed to be more effective and to cause fewer side-effects than rivals, is crucial to SKB's future.

With projected annual sales of over $1bn (pounds 630m) by 2002, Avandia could boost SKB's sales for years to come, changing the company's profile in the same way the ulcer compound Zantac transformed Glaxo Wellcome from a medium-sized drug company into a pharmaceutical powerhouse.

SKB will not declare its intentions until after regulatory approval but, given Avandia's importance, industry experts believe it will support the product launch with a mass marketing campaign on the US media.

A series of high-profile advertisements for Avandia would highlight the gulf between the US, where drug advertising is allowed, and Europe, where both European Union and national laws have imposed a blanket ban on drug adverts.

The debate over pharmaceuticals marketing has been going on for some time, but it is set to heat up in coming years as the growth of the Internet is blowing large holes in European media laws.

In the US, strong lobbying by pharmaceutical groups led the authorities to allow direct-to-consumer advertising (DTC) in August 1997. The ruling, which followed years in which companies were heavily restricted in marketing their products, opened the floodgates of advertising investment. Last year, the US pharmaceutical industry spent over $1.2bn on marketing products to the public, with around half of that going to promote medicines that can only be prescribed by a doctor.

TV spots, such as the one featuring the former Republican presidential candidate Bob Dole promoting the impotence treatment Viagra, struck a chord with a health-obsessed public and contributed to an 11 per cent rise in US drug sales to nearly $100bn. Drug adverts are now a regular feature of US prime-time TC and have also been shown during the American football Super Bowl, the biggest TV event in the US.

Supporters of the American system claim that DTC benefits patients because it raises their disease awareness. Recent figures show that last year, advertising prompted over 20 million Americans to talk to their doctors about illnesses they had never mentioned before. The adverts proved particularly effective for diseases such as diabetes, depression and heart ailments, where cases may not be diagnosed. John Kamp, of the American Association of Advertising Agencies, said: "Government agencies and medical professionals can use their tools until they are blue in the face and not reach the people that could be reached through television."

Others believe that direct advertising of prescription medicines fosters a healthier relationship between patients and doctors. Robert Jones, the director of corporate policy at Glaxo, agrees. "The role of the patient is changing. The patient is much less of a passive recipient of medicines than years ago. The idea that the doctors know best is dying."

But if DTC has such a beneficial impact on the pharmaceutical industry and its customers, why has it not been introduced in Europe?

Opponents of advertising believe that adopting the US policy could have devastating social and economic implications for the European healthcare industry. From a financial viewpoint, national governments are dead against a system that could inflate strained health budgets.

As the US experience shows, DTC increases demand for medicines as more and more people get to know about treatments. Last year Schering Plough spent an astonishing $182m on media promotions of its allergy product Claritin and saw sales leap by 31 per cent to $2.3bn.

Soaring drug sales are not a government concern in the US, where the bulk of healthcare expenditure is funded by private insurance schemes. In Europe, however, an advertising-led boom in medicine sales would have to be met by public expenditure and would jeopardise many governments' efforts to cut health and social security budgets. One industry figure said: "There is no way EU governments would go the way of the US. It is just too expensive."

Pharmaceutical companies and some experts dispute this, arguing that doctors will keep a tight grip on drug demand as they have the final say on which medicines they prescribe. Jerry Avorn, professor at the Harvard Medical School, said: "There is no pharmaceutical company or patient that puts a gun to a doctor's head to write the prescription."

However, doctors complain that DTC puts them under pressure to prescribe. One leading US physician warned its European counterparts on the dangers of adverts: "The problem is that [DTC] creates misdirected expectations and desires. Increasingly we find patients coming in and saying: `I want this drug,' even though that treatment may not be appropriate."

These misgivings are being increasingly challenged by the spread of the Internet. European consumers can now find information about drugs and diseases by hitting on one of the thousands of pharmaceutical websites. A recent survey showed that healthcare had overtaken pornography as the most popular Net sector.

The key worry of drug companies and regulators is that most of the information on the Web has not been vetted and could prompt consumers to choose the wrong drugs. For example, there are over 20 sites debating Avandia even before its launch. Viagra is on nearly 150 locations, many of them unauthorised by its maker, Pfizer.

Some drugs companies believe the Internet's increasing popularity will force European governments to allow adverts. According to Mr Jones of Glaxo: "There is a kind of technical inevitability about it because of the power of the Net."

SKB agrees. "We are increasingly concerned at unregulated sources of information. Consumers have the right to accurate information about medicines," a spokeswoman said.