This is the accessible text file for GAO report number GAO-03-177 
entitled 'Prescription Drugs: FDA Oversight of Direct-to-Consumer 
Advertising Has Limitations' which was released on December 04, 2002.



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Report to Congressional Requesters:



United States General Accounting Office:



GAO:



October 2002:



Prescription Drugs:



FDA Oversight of Direct-to-Consumer Advertising Has Limitations:



Presciption Drug Advertising:



GAO-03-177:



Contents:



Letter:



Results in Brief:



Background:



Pharmaceutical Companies Spend More on Research and Development than on 

DTC Advertising:



DTC Advertising Appears to Increase Prescription Drug Spending and 

Utilization:



FDA’s Oversight of DTC Advertising Has Limitations:



Conclusions:



Recommendation for Executive Action:



Agency Comments and Our Evaluation:



Appendix I: Scope and Methodology:



Appendix II: Surveys of Consumers’ Behavior after Seeing or 

Hearing Direct-to-Consumer (DTC) Advertisements:



Appendix III: Comments from the Department of Health and 

Human Services:



Tables:



Table 1: Selected Requirements for Contents of Print and Broadcast 

Product Claim Advertisements:



Table 2: DTC Advertising Spending Compared to Spending on Total 

Promotion and Research and Development from 1997 to 2001:



Table 3: The 15 Drugs with the Highest DTC Spending, 2000:



Table 4: DTC Regulatory Letters Sent by FDA in 2001:



Table 5: Calendar Days between DDMAC’s Draft Regulatory Letter 

Submission to OCC and Issuance Date, since January 31, 2002:



Table 6: Duration of DTC Television Advertisements:



Figures:



Figure 1: Spending on Pharmaceutical Promotional Activities, 2001:



Figure 2: Percentage of Sales for Chronic and Acute Conditions Treated 

by the 50 Drugs with the Highest Spending on DTC Advertising, 2000:



Abbreviations:



CDER: Center for Drug Evaluation and Research

DDMAC: Division of Drug Marketing, Advertising, and 

 Communications 

DTC: direct-to-consumer

FDA: Food and Drug Administration

FFDCA: Federal Food, Drug and Cosmetic Act

HHS: Department of Health and Human Services

NIHCM: National Institute for Health Care Management Foundation

OCC: Office of the Chief Counsel

PhRMA: Pharmaceutical Research and Manufacturers of America:



United States General Accounting Office:



Washington, DC 20548:



October 28, 2002:



The Honorable Susan Collins

The Honorable Barbara Mikulski

The Honorable James Jeffords

United States Senate:



The Honorable Nick Rahall

The Honorable Joseph M. Hoeffel

House of Representatives:



Prescription drug spending increased at an annual rate of about 18 

percent from 1997 through 2001 and is the fastest growing component of 

health care spending in the United States. Among the many reasons cited 

for this increase are growth in the number of patients diagnosed with 

conditions that can be treated with pharmaceuticals and the development 

of innovative drugs for some conditions.[Footnote 1] Spending on 

direct-to-consumer (DTC) advertising of prescription drugs has tripled 

in recent years. Pharmaceutical companies promote their products 

directly to consumers through advertisements in magazines, newspapers, 

and consumer brochures; on the Internet; and on radio and television. 

They also promote their products to physicians by sending sales 

representatives to their offices, providing free samples for 

distribution to patients, and advertising in professional journals.



The potential consequences of print and broadcast DTC advertising have 

prompted much debate. Supporters of DTC advertising maintain that it 

educates consumers about medical conditions and care options and that 

the increased use of prescription drugs that DTC advertising encourages 

has improved the public’s health. Critics of DTC advertising contend 

that it is sometimes misleading, leads consumers to seek prescription 

drugs when other treatments may be more appropriate, and causes some 

patients to ask their physician to prescribe new drugs that are more 

expensive but may not be more effective than older drugs. Critics also 

argue that pharmaceutical companies spend too much money on drug 

promotion rather than on research and development initiatives.



The Food and Drug Administration (FDA) regulates the promotion of 

prescription drugs, including the content of DTC advertisements, under 

the authority of the Federal Food, Drug and Cosmetic Act 

(FFDCA).[Footnote 2] The act sets general standards for FDA’s 

regulation of prescription drug advertising directed to consumers and 

physicians. Regulations implementing the act require that 

advertisements present accurate information and fairly represent both 

the benefits and the risks of the advertised drug.[Footnote 3] The 

Division of Drug Marketing, Advertising, and Communications (DDMAC) 

within FDA’s Center for Drug Evaluation and Research (CDER) is 

responsible for implementing the regulations governing DTC advertising. 

Under the regulations, pharmaceutical companies are required to submit 

all drug advertisements to FDA when they are first disseminated to the 

public (that is, broadcast, published, or otherwise 

distributed).[Footnote 4] In 1997, FDA issued draft guidance to clarify 

and offer options on how these regulations applied to advertisements 

broadcast directly to consumers on radio and television.[Footnote 5] 

Since that time, the number of broadcast advertisements for 

prescription drugs has increased greatly. At the same time, the number 

of regulatory letters sent by FDA to pharmaceutical companies 

requesting that the companies remove misleading advertisements from 

circulation has decreased, leading some observers to question FDA’s 

ability to enforce its regulations. Others argue that this decrease has 

occurred because pharmaceutical companies are doing a better job of 

meeting FDA’s requirements.



In light of these developments, you asked us to (1) compare spending by 

pharmaceutical companies on DTC advertising with spending on all 

promotional activities and on research and development, (2) evaluate 

the effect of DTC advertising on prescription drug spending and 

utilization, and (3) evaluate the extent and effectiveness of FDA’s 

oversight of DTC advertising since FDA issued its 1997 draft guidance 

for broadcast advertisements.



To assess the trends in spending on DTC advertising, overall promotion, 

and research and development, we reviewed recent reports from the 

pharmaceutical industry and other organizations. To analyze the effect 

of DTC advertising on drug spending and utilization, we reviewed 

studies on pharmaceutical sales, examined surveys of consumer responses 

to DTC advertising, and reviewed studies on the impact of DTC 

advertising.[Footnote 6] To evaluate the extent and effectiveness of 

FDA’s oversight of DTC advertising, we reviewed federal regulations, 

and regulatory letters, and interviewed officials from several offices 

within FDA, including DDMAC. We also interviewed pharmaceutical 

industry representatives and other key stakeholders, including public 

interest groups and representatives of the advertising industry. We 

conducted our work from February 2002 through September 2002 in 

accordance with generally accepted government auditing standards. See 

appendix I for a detailed discussion of our scope and methodology.



Results in Brief:



Pharmaceutical companies spend more on research and development 

initiatives than on all drug promotional activities, including DTC 

advertising. According to industry estimates, pharmaceutical companies 

spent $30.3 billion on research and development and $19.1 billion on 

all promotional activities, which includes $2.7 billion on DTC 

advertising, in 2001. Pharmaceutical companies have increased spending 

on DTC advertising more rapidly than they have increased spending on 

research and development. Between 1997 and 2001, DTC advertising 

spending increased 145 percent, while research and development spending 

increased 59 percent. Promotion to physicians accounted for more than 

80 percent of all promotional spending by pharmaceutical companies in 

2001. Total promotional spending was equivalent to 12 percent of drug 

sales in the United States in 2001.



DTC advertising appears to increase prescription drug spending and 

utilization. Drugs that are promoted directly to consumers often are 

among the best-selling drugs, and sales for DTC-advertised drugs have 

increased faster than sales for drugs that are not heavily advertised 

to consumers. Most of the spending increase for heavily advertised 

drugs is the result of increased utilization, not price increases. For 

example, between 1999 and 2000, the number of prescriptions dispensed 

for the most heavily advertised drugs rose 25 percent, but increased 

only 4 percent for drugs that were not heavily advertised. Over the 

same period, prices rose 6 percent for the most heavily advertised 

drugs and 9 percent for the others. The concentration of DTC spending 

on a small number of drugs for chronic diseases that are likely to have 

high sales anyway and the simultaneous promotion of these drugs to 

physicians may contribute to increased utilization and thereby increase 

sales of DTC-advertised drugs. The recent research literature shows 

that DTC advertising may cause increases in drug utilization and sales 

in some cases. In addition, consumer surveys have consistently found 

that about 5 percent of consumers (or, by our estimate, about 8.5 

million consumers annually) have both requested and received from their 

physician a prescription for a particular drug in response to seeing a 

DTC advertisement.



While generally effective at halting the dissemination of 

advertisements it reviews and identifies as misleading, FDA’s oversight 

of DTC advertising has limitations. DDMAC focuses on advertisements 

that will be widely circulated or that are the most likely to impart 

misleading impressions of a drug to consumers. For example, DDMAC 

reviews all broadcast DTC advertisements because of the large number of 

people who will see them. FDA issues regulatory letters for a small 

percentage of the advertisements it reviews. From August 1997 through 

August 2002, FDA issued 88 regulatory letters for violative DTC 

advertisements. FDA officials told us that pharmaceutical companies 

that have received regulatory letters have invariably ceased 

dissemination of the misleading advertisement. However, FDA’s oversight 

has not prevented some pharmaceutical companies from repeatedly 

disseminating new misleading advertisements for the same drug, and some 

pharmaceutical companies have failed to submit in a timely manner all 

newly disseminated advertisements to FDA for review. Furthermore, FDA’s 

oversight has been adversely affected by a January 2002 change in its 

procedures for reviewing draft regulatory letters that was directed by 

the Department of Health and Human Services (HHS). This change has 

significantly increased the time between DDMAC’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.



In light of the delay caused by the change in policy for review of 

draft DTC regulatory letters, we are recommending that HHS expedite the 

review of these letters to ensure that misleading DTC advertisements 

are withdrawn as soon as possible once identified. In its comments on a 

draft of this report, HHS explained that the purpose of the change in 

procedure was to ensure that the letters are based on a solid legal 

foundation and promote voluntary compliance. HHS agreed that it is 

important to issue DTC regulatory letters quickly and said that it 

intends to reduce the number of days that the letters are under review.



Background:



Prescription drug spending and utilization have increased rapidly in 

recent years. Part of the increase is due to growth in the number of 

patients diagnosed with conditions that can be treated with 

pharmaceuticals and the development of innovative drugs for some 

conditions. The promotion of prescription drugs is regulated by FDA. 

FDA’s regulations and subsequently issued guidance contain specific 

requirements and explanations regarding the content of advertisements 

that promote prescription drugs. When requirements are not met, FDA may 

issue a regulatory letter requesting that the advertisement be 

withdrawn or revised.



Reasons for Increased Prescription Drug Spending and Utilization:



Prescription drug spending has risen steadily over the past decade. 

Spending on prescription drugs now represents 10 percent of health care 

expenditures in the United States, and adults aged 65 and older spend 

nearly 3 percent of their total household expenditures on 

medications.[Footnote 7] Increases in overall drug spending are the 

result of three types of changes in drug prices and drug use: increases 

in utilization, that is, the number of prescriptions dispensed; price 

increases; and a shift from older drugs to new, more expensive drugs 

(newly marketed drugs are generally more expensive than older drugs in 

the same class). The National Institute for Health Care Management 

Foundation (NIHCM) reported that overall spending on prescription drugs 

in the United States increased 17.1 percent from 2000 to 2001: an 

increase in the number of prescriptions accounted for a 6.7 percent 

increase, price increases for a 6.3 percent increase, and shifts to 

higher-cost drugs for a 4.1 percent increase.[Footnote 8]



Prescription drug utilization in the United States has shown a steady 

increase over the past decade. The number of prescriptions dispensed in 

retail pharmacies has grown at an average annual rate of 6 percent 

since 1992, reaching nearly 3 billion in 2000.[Footnote 9] Among the 

factors besides DTC advertising and promotion to physicians that may 

contribute to this increased utilization are an aging population that 

is more dependent on multiple medications for treatment; new 

medications for conditions that had less effective previous treatments, 

such as high cholesterol; and increased insurance coverage for 

medications. In addition, the number of patients diagnosed with chronic 

conditions for which pharmaceutical treatments are available has 

increased dramatically. For example, the number of people with 

arthritis, one of the most frequent causes of disability in the United 

States, increased from an estimated 38 million in 1990 to 43 million in 

1997.[Footnote 10] Furthermore, for some conditions, such as high 

cholesterol, increased drug utilization has resulted from biomedical 

research that has led to a broadening of the guidelines for treatment 

with drugs.[Footnote 11]



Countries that do not allow DTC advertising and have publicly funded 

health systems have also experienced increased drug utilization, and 

therefore increased spending, because of these same factors. According 

to a drug marketing research firm, retail pharmacy sales from April 

2001 through April 2002 rose 16 percent in the United States, 16 

percent in Canada, 10 percent in Germany, and 12 percent in the United 

Kingdom.[Footnote 12]



FDA’s Requirements for the Content of DTC Advertisements:



FDA regulations describe several types of prescription drug 

advertisements, including DTC advertisements, and the extent to which 

they are subject to regulation. One type, product claim advertisements, 

usually mentions a drug’s name and the condition it is intended to 

treat and describes the risks and benefits associated with taking the 

medication. The regulations specify, among other things, that product 

claim advertisements (1) cannot be false or misleading; (2) must 

present a fair balance between the risks and the benefits of a drug 

product; (3) must reveal facts that are material to the representations 

made in the advertisement or the consequences of using the product as 

advertised; and (4) must, depending on the medium, either disclose all 

the risks listed in the product’s labeling or make “adequate provision” 

to disseminate the approved product labeling through other means to the 

advertisement’s audience. Table 1 shows some of the requirements for 

print and broadcast product claim advertisements.



Table 1: Selected Requirements for Contents of Print and Broadcast 

Product Claim Advertisements:



Advertising medium: Print and broadcast; Regulatory requirements: 

Cannot be false or misleading; Explanation: Must present information 

that is not inconsistent with product label.



Regulatory requirements: Must present fair balance; Explanation: Must 

include risks and benefits of a drug product.



Regulatory requirements: Must present “facts material”; Explanation: 

Must present information relevant to representations made, and describe 

consequences that may result from recommended use.



Advertising medium: Print only; Regulatory requirements: Must describe 

risks; Explanation: Must disclose all risks in a product’s labeling.



Advertising medium: Broadcast only; Regulatory requirements: Must 

describe risks; Explanation: Must present major side effects and 

contraindications[A] in audio or audio and visual form.



Regulatory requirements: Must make “adequate provision” for directing 

consumers to labeling information, or provide a brief summary of all 

necessary information related to risks; Explanation: Must provide 

additional sources where consumers can find complete information, such 

as a toll-free telephone number, a Web site, and a print advertisement 

in a magazine, and by contacting their physicians; otherwise must 

summarize risks.



[A] Contraindications are symptoms or conditions that make a drug 

treatment inadvisable.



Sources: 21 C.F.R. § 202; FDA, Guidance for Industry: Consumer-directed 

Broadcast Advertisements (Washington, D.C.: FDA, Aug. 1997).



[End of table]



In 1997, FDA issued draft guidance on how broadcast product claim DTC 

advertisements could communicate information about the risks of using a 

drug by finding mechanisms by which to get the product labeling 

information to consumers, and thereby meet the adequate provision 

portion of its regulations.[Footnote 13] Before this provision of the 

regulation was clarified in 1997, pharmaceutical companies generally 

had to provide all of the risk information associated with the 

medication during the broadcast advertisement. Including all of this 

risk information in a broadcast DTC advertisement increased the length 

of the advertisement to the point that such advertising was largely 

impractical. After the guidance was issued, pharmaceutical companies 

had an alternative to the requirement that all risks in broadcast 

advertisements be disclosed. Pharmaceutical companies could meet the 

regulatory requirements by presenting the major side effects, either in 

audio or in audio and visual form, and by telling consumers where to 

find additional information, including how or where to obtain the 

approved product labeling.



A second type of advertisement is reminder advertisements. These may 

disclose the name of the product and dosage form (e.g., tablet, syrup) 

or cost information, but they are not permitted to present its intended 

use or to make any claims or representations about the product. Under 

FDA regulations, reminder advertisements are exempt from the risk 

disclosure requirements.



A third type of advertisement is help-seeking advertisements, which are 

not regulated by FDA. They do not identify drugs by name and generally 

discuss a disease or condition and advise the print or broadcast 

audience to “see your doctor” for possible treatments.



FDA Regulatory Letters:



In an effort to stop dissemination of misleading DTC advertisements, 

FDA sends regulatory letters to companies that are in violation of its 

regulations. These letters are of two types--untitled letters and 

warning letters. Untitled letters address violations such as 

overstating the effectiveness of the drug, suggesting a broader range 

of indicated uses than the drug has been approved for, and making 

misleading claims because of inadequate context or lack of balanced 

risk information. Warning letters address more serious violations, 

including safety or health risks, or continued violations of the act. 

Warning letters advise a pharmaceutical firm that FDA may take further 

enforcement actions, such as seeking judicial remediation, without 

notifying the company, and generally ask the firm to conduct a new 

advertising campaign to correct inaccurate impressions left by the 

advertisement. A company that receives either type of letter from FDA 

is asked to submit a written response to the agency within 14 days 

describing the remedial actions it has taken.



Pharmaceutical Companies Spend More on Research and Development than on 

DTC Advertising:



Pharmaceutical companies spend more on research and development than on 

DTC advertising or on all promotional activities combined, according to 

industry sources. Nonetheless, spending for DTC advertising has 

increased much faster than spending for all promotional activities or 

for research and development. More than 80 percent of all promotional 

spending is directed toward physicians rather than consumers.



Despite Rapid Growth in Spending on DTC Advertising, Pharmaceutical 

Companies Spend More on Research and Development:



According to industry analyses, spending on research and development 

was more than 10 times higher than spending on DTC advertising in 

2001.[Footnote 14] Pharmaceutical companies spent an estimated $30.3 

billion on research and development and $19.1 billion on all 

promotional activities, including $2.7 billion on DTC advertising in 

2001. However, the growth rate of spending on DTC advertising is higher 

than the rate of increase for spending on total promotion or spending 

on research and development. As table 2 shows, from 1997 through 2001, 

spending on DTC advertising increased from $1.1 billion to an estimated 

$2.7 billion, spending on total promotion increased from $11.0 billion 

to an estimated $19.1 billion, and research and development spending 

increased from $19.0 billion to an estimated $30.3 billion.



Table 2: DTC Advertising Spending Compared to Spending on Total 

Promotion and Research and Development from 1997 to 2001:



Dollars in billions: 



DTC; 1997: $1.1; 1998: $1.3; 1999: $1.8; 2000: 

$2.5; 2001: $2.7; Percentage spending increase, 1997-2001: 145.



Total promotion[A]; 1997: 11.0; 1998: 12.5; 1999: 

13.9; 2000: 15.7; 2001: 19.1; Percentage spending increase, 1997-2001: 

74.



Research and development; 1997: 19.0; 1998: 21.1; 

1999: 22.7; 2000: 26.0; 2001: 30.3[B]; Percentage spending increase, 

1997-2001: 59.



[A] Total promotion includes DTC advertising.



[B] Estimated spending on research and development.



Sources: For 1997 to 2000 data, Pharmaceutical Research and 

Manufacturers of America, Pharmaceutical Industry Profile 2002, 18, 75; 

for 2001 promotional spending estimates, IMS Health, “Total U.S. 

Promotional Spending by Type, 2001.”



[End of table]



In recent years there has been a shift of DTC advertising from print 

media to television broadcasts.[Footnote 15] The percentage of DTC 

spending devoted to print advertisements declined from 74 percent in 

1997 to 35 percent in 2001. Conversely, spending on television 

advertising increased from 25 percent of all DTC spending in 1997 to 64 

percent in 2001. Prescription drug promotion on television escalated 

from 25 percent to 53 percent of the total spending on DTC advertising 

from 1997 to 1998.



Most Promotional Spending Is Directed to Physicians:



Most promotional spending is targeted to physicians. In each year from 

1997 to 2001, providing samples to office-based and hospital-based 

physicians and sending sales representatives to meet with physicians 

(practices known as sampling and detailing, respectively) accounted for 

more than 80 percent of expenditures on promotional 

activities.[Footnote 16] (See fig. 1.) The ratio of total promotional 

spending to drug sales remained fairly constant from 1997 to 2001. In 

2001, promotional spending was equivalent to 12 percent of drug sales 

in the United States.



Figure 1: Spending on Pharmaceutical Promotional Activities, 2001:



[See PDF for image]



[A]The practice of providing samples during sales visits to office-
based 

physicians.



[B] Sales activity of pharmaceutical sales representatives directed to 

office-based and hospital-based physicians.



Source: IMS Health, “Total U.S. Promotional Spending by Type, 2001.”



[End of figure]



DTC Advertising Appears to Increase Prescription Drug Spending and 

Utilization:



Drugs that are promoted directly to consumers often are among the best-

selling drugs, and sales for DTC-advertised drugs have increased faster 

than sales for drugs that are not heavily advertised to consumers. Most 

of the spending increase for heavily advertised drugs is the result of 

increased utilization, not price increases. DTC advertising is 

concentrated among a small number of drugs for chronic conditions and 

many of these same drugs are also promoted to physicians, both factors 

that may lead to increased sales. To date, the few studies that have 

examined the effects of DTC spending on prescription drug spending and 

utilization have found that DTC advertising increases both. In 

addition, there is clear evidence from consumer surveys that DTC 

advertising encourages consumers to request prescriptions for specific 

brand-name drugs from their physicians and that some physicians provide 

the requested prescription.



Many DTC-Advertised Drugs Are Best Sellers:



Drugs with high DTC spending are among the best-selling drugs. For 

example, in 2000, 22 of the 50 drugs with the highest DTC spending were 

among the top 50 in sales.[Footnote 17] Furthermore, sales of drugs 

with the highest DTC spending have risen more quickly than sales of 

other drugs. For example, NIHCM reported that expenditures for the 50 

most heavily advertised drugs increased 32 percent between 1999 and 

2000, while expenditures for all other drugs increased 14 percent. Most 

of this expenditure increase results from increased utilization (that 

is, an increase in prescriptions filled), not from price increases. 

Among the 50 most heavily advertised drugs, the number of prescriptions 

dispensed rose 25 percent between 1999 and 2000, compared to a 4 

percent increase for other drugs. During the same period, prices 

increased 6 percent for the heavily advertised drugs, and 9 percent for 

other drugs.



DTC-Advertised Drugs Are for Chronic Conditions and Are Often Promoted 

to Physicians:



Concentration of DTC spending on a small number of drugs for chronic 

conditions that are likely to have high sales and the promotion of 

these same drugs to physicians may also contribute to increased 

utilization. Almost all spending on DTC advertising is concentrated 

among a small number of drugs that treat chronic conditions and 

therefore must be taken repeatedly. (See fig. 2.) These drugs are 

relatively new and are still under patent protection. According to 

NIHCM, the 50 drugs with the highest DTC advertising spending in 2000 

accounted for 95 percent of all DTC advertising spending that year, and 

the top 15 DTC-advertised drugs accounted for 54 percent of all DTC 

advertising spending. All of the top 15 DTC-advertised drugs were for 

chronic conditions: 6 for allergy or asthma, 3 for high cholesterol, 2 

for arthritis, and 1 each for acid reflux, depression, obesity, and 

impotence. (See table 3.) Only one of the 50 most heavily advertised 

drugs was an antibiotic, a drug class that is used episodically. In 

some drug categories, a small number of pharmaceuticals that are 

heavily advertised account for the vast majority of sales. For example, 

in 2000 three oral antihistamines, Claritin, Allegra, and Zyrtec, 

accounted for 86 percent of all oral antihistamine sales, and all three 

of them were among the 15 most heavily advertised drugs.



Figure 2: Percentage of Sales for Chronic and Acute Conditions Treated 

by the 50 Drugs with the Highest Spending on DTC Advertising, 2000:



[See PDF for figure]



Source: GAO analysis of data from NIHCM Foundation, Prescription Drugs 

and Mass Media Advertising, 2000.



[End of figure]



Table 3: The 15 Drugs with the Highest DTC Spending, 2000:



Drug: Vioxx; Condition: Arthritis; Percentage of DTC spending for all 

drugs[A]: 7.1; Percentage of sales for all drugs[B]: 1.2.



Drug: Prilosec; Condition: Acid reflux; Percentage of DTC spending for 

all drugs[A]: 4.8; Percentage of sales for all drugs[B]: 3.1.



Drug: Claritin; Condition: Allergy; Percentage of DTC spending for all 

drugs[A]: 4.4; Percentage of sales for all drugs[B]: 1.5.



Drug: Paxil; Condition: Depression; Percentage of DTC spending for all 

drugs[A]: 4.1; Percentage of sales for all drugs[B]: 1.4.



Drug: Zocor; Condition: High cholesterol; Percentage of DTC spending 

for all drugs[A]: 4.0; Percentage of sales for all drugs[B]: 1.7.



Drug: Viagra; Condition: Impotence; Percentage of DTC spending for all 

drugs[A]: 4.0; Percentage of sales for all drugs[B]: 0.6.



Drug: Celebrex; Condition: Arthritis; Percentage of DTC spending for 

all drugs[A]: 3.5; Percentage of sales for all drugs[B]: 1.5.



Drug: Flonase; Condition: Allergy; Percentage of DTC spending for all 

drugs[A]: 3.3; Percentage of sales for all drugs[B]: 0.5.



Drug: Allegra; Condition: Allergy; Percentage of DTC spending for all 

drugs[A]: 3.0; Percentage of sales for all drugs[B]: 0.8.



Drug: Meridia; Condition: Obesity; Percentage of DTC spending for all 

drugs[A]: 2.9; Percentage of sales for all drugs[B]: 0.1.



Drug: Flovent; Condition: Asthma; Percentage of DTC spending for all 

drugs[A]: 2.8; Percentage of sales for all drugs[B]: 0.5.



Drug: Pravachol; Condition: High cholesterol; Percentage of DTC 

spending for all drugs[A]: 2.7; Percentage of sales for all drugs[B]: 

0.9.



Drug: Zyrtec; Condition: Allergy; Percentage of DTC spending for all 

drugs[A]: 2.7; Percentage of sales for all drugs[B]: 0.6.



Drug: Singulair; Condition: Asthma; Percentage of DTC 

spending for all drugs[A]: 2.6; Percentage of sales for all drugs[B]: 

0.5.



Drug: Lipitor; Condition: High cholesterol; Percentage of DTC 

spending for all drugs[A]: 2.6; Percentage of sales for all drugs[B]: 

2.8.



Total; Percentage of DTC spending 

for all drugs[A]: 54.5; Percentage of sales for all drugs[B]: 17.7.



[A] Total DTC spending for all drugs was $2.5 billion.



[B] Sales for all drugs totaled $132 billion.



Source: Kreling, Mott, Wiederholt, Lundy, and Levitt, Prescription Drug 

Trends: A Chartbook Update, 32; NIHCM Foundation, Prescription Drugs 

and Mass Media Advertising, 2000, 9.



[End of table]



Many of the same drugs that are promoted through DTC advertising are 

also promoted to physicians, meaning that any sales increases may be 

due in part to that promotion. For example, according to industry 

analysts, half of the 10 drugs with the highest DTC spending were also 

among the 10 drugs with the greatest volume of samples distributed to 

physicians in 2000.[Footnote 18] Over 70 percent of physicians surveyed 

in one study said that they are more likely to prescribe the brand-name 

medication requested by the patient if they have a free sample 

available.[Footnote 19] In addition, there is a growing trend to 

announce through DTC venues such as television, newspaper 

advertisements, and the Internet that free samples are available from 

physicians. Thus pharmaceutical companies are making consumers aware of 

these products and providing samples to physicians so that samples are 

available when consumers request them.



Research Studies Suggest That DTC Advertising Has Increased Utilization 

and Sales of Advertised Drugs:



Researchers have only recently begun to examine the effects of DTC 

advertising on drug utilization and sales. The few studies we 

identified have conflicting findings but, on the whole, suggest that 

DTC advertising may increase drug utilization and sales. One study 

looked at the utilization of an injectable migraine headache treatment 

in cities in which a DTC advertising campaign was conducted and cities 

with no advertising. During the first year the drug was marketed, 

February 1993 to February 1994, the drug was dispensed nearly 10 

percent more in cities in which DTC advertisements were 

disseminated.[Footnote 20] Additionally, three recent studies that 

examined the joint effects of DTC advertising and promotion to 

physicians all found that DTC advertising significantly increased drug 

sales.[Footnote 21] Each of the studies found that DTC advertising 

increased sales within the advertised drug’s class (implying, for 

example, that advertising for one antihistamine increased sales for 

other antihistamines as well).[Footnote 22] Two of the studies 

estimated that each 10 percent increase in DTC spending within a drug 

class increased sales in that class by 1 percent.[Footnote 23]



An exception to this pattern of findings is a study on the effects of 

fluctuations in the intensity of DTC advertising on sales of 

cholesterol-lowering drugs from 1995 to 2000. While sales of 

cholesterol-lowering drugs increased substantially over that period, 

this study found that variations in the amount of DTC advertising were 

not statistically related to either sales of particular brand-name 

drugs or sales of cholesterol-lowering drugs as a class.[Footnote 24] 

Unlike the studies described above, this research did not consider the 

effects of promotion to physicians.



Consumer Surveys Have Found That DTC Advertisements Influence Consumers 

to Ask Physicians for Brand-name Drugs:



Surveys conducted by FDA and private organizations consistently show 

that DTC advertisements have an impact on whether consumers request and 

receive a specific brand-name prescription from their physician. (See 

app. II for a list of consumer surveys.) In several of these surveys, 

consumers were asked whether they had seen an advertisement for a 

prescription drug and whether seeing the advertisement resulted in 

discussing the medication with their doctor and receiving the 

prescription. Most consumers (65 to 85 percent) remembered seeing a DTC 

advertisement. A subset of consumers who saw an advertisement discussed 

the medication with their doctor. The percentage of patients asking 

their physicians about a prescription for a specific drug was 

consistent across studies, about 30 to 35 percent of those who 

remembered seeing a DTC advertisement. One study estimated that the 32 

percent of consumers in a 2001 survey who had discussed a DTC 

advertisement with their doctor translated into approximately 61.1 

million consumers asking about specific medications. In the consumer 

surveys we examined, the percentage of consumers who, in response to a 

DTC advertisement, requested and received a prescription from their 

physician for a drug they were not currently taking was generally about 

5 percent (ranging from 2 percent to 10 percent). By our estimate, this 

means that about 8.5 million consumers received a prescription after 

viewing a DTC advertisement and asking their physician for the drug in 

2000.[Footnote 25]



FDA’s Oversight of DTC Advertising Has Limitations:



FDA’s oversight of DTC advertising is focused on advertisements that 

have the greatest exposure or the greatest potential to be misleading. 

Pharmaceutical companies comply with FDA’s requests to cease 

dissemination of misleading DTC advertisements. However, some 

pharmaceutical companies have repeatedly disseminated misleading 

advertisements for the same drug, and pharmaceutical companies have 

failed to submit, or to submit in a timely manner, all newly 

disseminated advertisements to FDA for review. A recent change in the 

procedures for reviewing draft regulatory letters has adversely 

affected FDA’s ability to issue regulatory letters in a timely manner.



DDMAC Targets Reviews:



As of June 2002, five DDMAC staff were dedicated to reviewing DTC 

advertisements, and two DTC review slots were vacant.[Footnote 26] 

DDMAC’s reviewers focus on advertisements that will receive the 

greatest exposure or have the most potential to impart misleading 

impressions of a drug to consumers. These include broadcast 

advertisements, print advertisements appearing in high-circulation 

periodicals, initial advertising campaigns for newly marketed drugs, 

and new advertisements from pharmaceutical companies that have 

previously been cited for disseminating misleading advertisements. 

DDMAC officials told us that 248 broadcast advertisements and an 

unknown number of DTC print advertisements were submitted to it at the 

time of their dissemination in 2001. DDMAC staff reviewed all the 

broadcast advertisements it received in 2001. DDMAC does not keep track 

of the number of print advertisements it reviewed.[Footnote 27] DDMAC 

also received and reviewed 230 complaints about allegedly misleading 

advertisements (for both consumer-directed and health professional-

directed materials) in 2001, the majority of which were submitted by 

competing pharmaceutical companies. DDMAC investigates all tips 

concerning potentially misleading advertisements. Although FDA 

generally does not have the authority to preapprove advertisements 

before they are disseminated, companies may voluntarily submit their 

materials to FDA for advisory comments before launching an 

advertisement. DDMAC gave advisory comments on 128 broadcast 

advertisements in 2001. In addition to monitoring and review 

activities, DDMAC conducts research to better understand consumer and 

physician behavior related to DTC advertising.



FDA Sends Regulatory Letters When It Identifies a Violation:



When FDA identifies a violative DTC advertisement, it sends a 

regulatory letter to the company responsible for the advertisement 

asking that the company cease disseminating the advertisement. FDA 

issues regulatory letters for only a small percentage of the 

advertisements it reviews. For example, FDA has issued letters for 

about 5 percent of the broadcast advertisements it reviewed between 

1999 and 2001. In total, FDA issued 88 regulatory letters for DTC 

advertisements between August 1997 and August 2002--44 for broadcast 

advertisements, 35 for print advertisements, and 9 for both broadcast 

and print advertisements.[Footnote 28] Almost all of the regulatory 

letters were untitled letters, which are for less serious violations of 

FFDCA; for more serious violations, FDA issued three warning letters 

for broadcast advertisements and one for a print advertisement.



FDA’s warning letters often cite multiple, serious offenses or 

violations that raise public health issues. For example, FDA’s January 

21, 1999, warning letter to Novartis Pharmaceuticals Corporation about 

the marketing of Lescol, a cholesterol-lowering drug, described four 

violations: (1) Novartis did not submit the broadcast advertisement to 

FDA when it was disseminated, as required by the regulations, resulting 

in “violative messages being disseminated to a far larger consumer 

audience than might have otherwise occurred”; (2) the advertisement 

falsely stated that treatment with Lescol was as effective as treatment 

with other cholesterol-lowering agents named in the advertisement; (3) 

the advertisement falsely stated that treatment with Lescol was less 

expensive than treatment with other named cholesterol-lowering agents; 

and (4) the advertisement minimized the risk of potentially serious 

side effects, including liver function abnormalities and muscle pain or 

weakness.



Table 4 lists the 14 DTC regulatory letters issued by FDA in 2001 and 

describes the violations cited in each. One-half of the letters cited 

advertisements that made misleading claims about a drug’s efficacy. For 

example, FDA’s August 2001 letter concerning Luxiq, a cream for the 

treatment of psoriasis and eczema, noted that the advertisement claimed 

“highly effective relief in three out of four patients,” even though 

the clinical trial described on the product labeling found that Luxiq’s 

success at improving various symptoms ranged from 41 percent to 67 

percent. The Luxiq advertisement also claimed that it reduced symptoms 

“within days,” even though the clinical trial results were for patients 

who used it for 4 weeks. Similarly, in November 2001, FDA cited an 

advertisement for Protopic Ointment, a treatment for allergic 

dermatitis, which included models with completely smooth skin. FDA 

concluded that this implied that patients would experience 100 percent 

improvement of their symptoms with the ointment, even though the 

product labeling noted that only one-tenth of the patients taking the 

drug showed complete improvement. Regulatory letters have also cited 

advertisements for minimizing risk information. For example, FDA’s 

October 2001 letter about an advertisement for Differin Gel, an acne 

medication, claimed that risk information was inadequately presented 

because, “During the audio presentation of the major risk information, 

there are numerous visual distractions that interfere with the viewer’s 

ability to listen to … the information … [including] numerous scene 

changes and quick camera movements.” Still other advertisements have 

been cited because FDA identified them as being a different type of 

advertisement than apparently intended by the pharmaceutical firm. 

FDA’s January 2001 letter concerning an advertisement for the acid 

reflux medication Prilosec, for instance, noted that the advertisement 

did not mention the drug by name and did not include information about 

the drug’s approved indication and usage. The manufacturer apparently 

intended it to be a help-seeking advertisement that did not require 

such information. However, FDA found that, in essence, the 

advertisement was a product claim advertisement because it discussed 

acid reflux in conjunction with “the purple pill,” and at the time 

Prilosec was the only purple pill that treated acid reflux.



Table 4: DTC Regulatory Letters Sent by FDA in 2001:



Drug: Prilosec; Condition: Acid reflux; Company: AstraZeneca; Date: 1/

3/01; Type of letter: Untitled; Violation: Provides inadequate 

information on approved product indication and use, lacks fair balance.



Drug: Protopic; Condition: Eczema; Company: Fujisawa Healthcare; Date: 

2/16/01; Type of letter: Untitled; Violation: Fails to provide 

necessary information for making product claims.



Drug: Xenical; Condition: Obesity; Company: Hoffmann-La Roche; Date: 3/

30/01; Type of letter: Untitled; Violation: Provides 

inadequate information on full indication, fails to fulfill “adequate 

provision”[A] requirements, lacks fair balance.



Drug: Plavix; Condition: Heart disease; Company: Sanofi-Synthelabo; 

Date: 6/8/01; Type of letter: Untitled; Violation: Minimizes 

role of physician, fails to fulfill “adequate provision” requirements.



Drug: Avandia; Condition: Diabetes; Company: GlaxoSmithKline; Date: 6/

28/01; Type of letter: Untitled; Violation: Minimizes risks.



Drug: Ditropan XL; Condition: Overactive bladder; Company: Alza; Date: 

7/12/01; Type of letter: Untitled; Violation: Overstates 

efficacy, minimizes risks, fails to convey indications.



Drug: Cerezyme; Condition: Gaucher disease; Company: Genzyme; Date: 7/

13/01; Type of letter: Untitled; Violation: Minimizes risks, 

fails to fulfill “adequate provision” requirements, fails to disclose 

prescription drug status.



Drug: Niaspan; Condition: High cholesterol; Company: Kos 

Pharmaceuticals; Date: 7/13/01; Type of letter: Warning; 

Violation: Fails to present significant risks; makes misleading 

efficacy claims; implied use is inconsistent with product labeling.



Drug: Luxiq; Condition: Psoriasis and eczema; Company: Connetics; Date: 

8/13/01; Type of letter: Untitled; Violation: Overstates 

efficacy, misleading preference, compliance, and superiority claims.



Drug: Differin; Condition: Acne; Company: Galderma Laboratories; Date: 

10/1/01; Type of letter: Untitled; Violation: Provides 

inadequate risk information in relation to effectiveness information.



Drug: Actonel; Condition: Osteoporosis; Company: Proctor & Gamble; 

Date: 10/9/01; Type of letter: Untitled; Violation: Minimizes 

role of health care provider, fails to fulfill “adequate provision” 

requirements, provides inadequate risk information.



Drug: Protopic; Condition: Eczema; Company: Fujisawa Healthcare; Date: 

11/14/01; Type of letter: Untitled; Violation: Overstates 

efficacy, broadens approved product indication, minimizes risk.



Drug: Nolvadex; Condition: Breast cancer; Company: AstraZeneca; Date: 

12/14/01; Type of letter: Untitled; Violation: Makes 

misleading efficacy claims, minimizes risks, fails to comply with 

postmarketing reporting requirements.



[A] Unless broadcast advertisements provide a brief summary of all 
risks, 

they must make “adequate provision” for the dissemination of the 

approved product labeling.



Source: FDA, Center for Drug Evaluation and Research, “Warning Letters 

and Notice of Violation Letters to Pharmaceutical Companies” 

(Rockville, MD.: U.S. Food and Drug Administration), http://

www.fda.gov/cder/warn/ (downloaded Sept. 9, 2002).



[End of table]



FDA’s Regulatory Letters Are Effective in Halting Dissemination of 

Misleading Advertisements:



FDA officials told us that pharmaceutical companies have complied with 

FDA’s requests to cease dissemination of misleading DTC drug 

advertisements in every case to date. For that reason, and because FDA 

does not want to remove a beneficial drug from the market, FDA has yet 

to employ any of the harsher remedies available to it. FDA, through the 

Department of Justice, can initiate court action to seize drugs for 

which advertisements are false or misleading. FDA may also ask a court 

to stop the advertisement and request the company to run a corrective 

campaign. FFDCA provides for criminal penalties for violative 

prescription drug advertising.



Some Pharmaceutical Companies Have Been Cited for Repeatedly 

Disseminating Different Misleading Advertisements:



FDA’s regulatory letters do not completely deter pharmaceutical 

companies from making misleading claims in subsequent advertisements. 

Since 1997, FDA has issued repeated regulatory letters to several 

pharmaceutical companies, including 14 to GlaxoSmithKline, 6 to 

Schering Corporation, and 5 to Merck & Co.[Footnote 29] Some companies 

have received multiple regulatory letters over time for new 

advertisements promoting the same drug. For example, FDA issued four 

separate regulatory letters, one of which was a warning letter, to stop 

misleading advertisements for the allergy drug Flonase marketed by 

Glaxo Wellcome in 1999 and 2000. The untitled letters were for 

unsubstantiated efficacy claims and for lack of fair balance. The 

warning letter was for failure to provide any risk information on the 

major side effects and contraindications of the drug, failure to make 

adequate provision for disseminating the product labeling, and failure 

to submit the advertisement to FDA. In the past 4 years, FDA has issued 

four regulatory letters to Pfizer regarding broadcast and print 

advertisements for its cholesterol-lowering drug, Lipitor. Among other 

infractions, FDA noted that the advertisements gave the false 

impression that Lipitor can reduce heart disease and falsely claimed 

that Lipitor is safer than competing products.



Effectiveness of FDA’s Oversight of DTC Advertising Is Limited in Two 

Ways:



While FDA’s enforcement actions have succeeded in removing from 

dissemination misleading DTC advertisements, the effectiveness of its 

oversight is limited in two respects. First, FDA’s ability to assess 

the compliance of pharmaceutical companies with its DTC advertising 

regulations is compromised because FDA cannot verify that it receives 

all newly disseminated advertisements from pharmaceutical companies. 

FDA has issued six regulatory letters for misleading advertisements 

since 1997 that cited pharmaceutical companies for failing to submit 

their advertisements to the agency when they were first disseminated.



FDA officials told us that the agency contracts with a commercial 

service that monitors television advertising placement to find 

advertisements that pharmaceutical companies have failed to submit to 

the agency. The service monitors six cable television networks and the 

New York City affiliates of the four major networks and PBS.[Footnote 

30] This service does not identify all advertisements that are 

broadcast on smaller networks, such as some cable television stations, 

or in some local markets. Indeed, in one case a misleading 

advertisement was broadcast in 2 calendar years in Puerto Rico before 

FDA became aware of it.



Second, 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 and warning letters in a timely 

manner. The ability to issue regulatory letters quickly after an 

advertising violation is identified is a key component of FDA’s 

oversight of DTC advertising. Any inaccurate impressions of a drug that 

are caused by a misleading advertisement are minimized if the 

advertisement is quickly removed from dissemination. Prior to the 

policy change, FDA officials told us that regulatory letters were 

issued directly by DDMAC within several days of its receipt of an 

advertisement that it identified as misleading. On November 29, 2001, 

HHS instructed FDA that no untitled or warning letters could be issued 

until FDA’s Office of the Chief Counsel (OCC) reviewed them. HHS 

implemented this new policy to ensure that all draft warning and 

untitled letters from FDA were reviewed for “legal sufficiency and 

consistency with agency policy.” FDA officials told us that OCC 

implemented this policy for regulatory letters on January 31, 2002, and 

that OCC set the goal of reviewing all draft regulatory letters from 

DDMAC within 45 working days.[Footnote 31]



Since the policy change, OCC’s reviews of draft regulatory letters from 

FDA have taken so long that misleading advertisements may have 

completed their broadcast life cycle before FDA issued the letters. FDA 

provided us with information indicating that DDMAC submitted five draft 

DTC regulatory letters between January 31, 2002, and September 5, 2002. 

All of the letters have been issued. The letters were issued from 13 to 

78 calendar days after they were first submitted to OCC by DDMAC (see 

table 5). As table 6 shows, many television DTC advertisements are on 

the air for only a short time--about one-fifth of them for 1 month, and 

about one-third for 2 months or less. Although we do not know the 

broadcast status of the advertisements targeted by DDMAC’s draft 

regulatory letters, there is a possibility that misleading 

advertisements could remain on the air after they are identified by 

DDMAC if FDA maintains its current review policies.



Table 5: Calendar Days between DDMAC’s Draft Regulatory Letter 

Submission to OCC and Issuance Date, since January 31, 2002:



Date submitted to OCC by DDMAC: 3/22/02; Date issued: 5/16/02; Calendar 

days between submission by DDMAC and issuance: 55.



Date submitted to OCC by DDMAC: 4/4/02; Date issued: 5/13/02; Calendar 

days between submission by DDMAC and issuance: 39.



Date submitted to OCC by DDMAC: 4/8/02; Date issued: 4/30/02; Calendar 

days between submission by DDMAC and issuance: 22.



Date submitted to OCC by DDMAC: 5/16/02; Date issued: 8/2/02; Calendar 

days between submission by DDMAC and issuance: 78.



Date submitted to OCC by DDMAC: 7/30/02; Date issued: 8/12/02; Calendar 

days between submission by DDMAC and issuance: 13.



Source: GAO analysis of data provided by FDA.



[End of table]



Table 6: Duration of DTC Television Advertisements:



Months on the air: 1; Percentage: 22.



Months on the air: 2; Percentage: 10.



Months on the air: 3-6; Percentage: 30.



Months on the air: 7-12; Percentage: 29.



Months on the air: 13-28; Percentage: 9.



Source: Analysis by Pfizer, Inc., of data from Nielsen Monitor Plus for 

303 unique television advertisements for prescription drugs that aired 

between 1997 and mid-2001.



[End of table]



Conclusions:



DTC advertising prompts millions of consumers to ask their doctors for 

prescriptions for specific brand-name drugs. As a result, it is 

important that FDA act effectively to minimize the public’s exposure to 

misleading DTC advertisements. We found that FDA’s oversight is 

generally effective at halting the dissemination of advertisements it 

reviews and identifies as misleading. The recent change directed by HHS 

in FDA’s procedures for reviewing draft regulatory letters has 

adversely affected FDA’s ability to enforce compliance with its 

regulations. Without more timely action, DTC advertisements that DDMAC 

has identified as misleading can remain on the air too long.



Recommendation for Executive Action:



To ensure that FDA’s enforcement actions are timely, we recommend that 

HHS reduce the amount of time for internal review of draft regulatory 

letters.



Agency Comments and Our Evaluation:



HHS reviewed a draft of this report and provided comments, which are 

included as appendix III. HHS generally agreed with our description of 

FDA’s oversight of DTC advertising. HHS explained that the intent of 

its policy change requiring FDA’s OCC to review all draft regulatory 

letters is to ensure that the letters are based on a solid legal 

foundation and promote voluntary compliance. Although we did not 

conduct a legal analysis of the letters that FDA issued either before 

or after the policy change, we found that FDA’s regulatory letters 

issued before this policy took effect already were successful at 

halting the dissemination of misleading DTC advertisements. HHS agreed 

with us that it is important to issue DTC advertising enforcement 

letters quickly and therefore has established a goal of issuing the 

letters within 15 working days of review at OCC. HHS also provided 

technical comments, which we incorporated as appropriate.



As agreed with your offices, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days 

from its date. We will then send copies to the Secretary of Health and 

Human Services, the Commissioner of FDA, and appropriate congressional 

committees. We will also make copies available to others on request. In 

addition, the report will be available at no charge on GAO’s Web site 

at http://www.gao.gov.



If you or your staffs have any questions, please contact me at 

(202) 512-7119 or Martin T. Gahart at (202) 512-3596. Key contributors 

to this assignment were Louise Duhamel, Anne Dievler, and Roseanne 

Price.



Janet Heinrich

Director, Health Care--Public Health Issues:



Signed by Janet Heinrich



[End of section]



Appendix I: Scope and Methodology:



This study concerns FDA’s oversight of DTC advertising of prescription 

drugs, which takes place within DDMAC, a division of CDER. We therefore 

did not examine FDA’s oversight of advertising in other areas, such as 

biological products, and we did not look at advertising issues 

concerning nonprescription medicines or dietary supplements.



To assess the trends in spending on DTC advertising, overall promotion, 

and research and development, we reviewed recent reports from the 

Kaiser Family Foundation, the Pharmaceutical Research and Manufacturers 

of America (PhRMA), NIHCM, IMS Health, and others. We did not 

independently verify the data reported by PhRMA and IMS Health. 

However, these data sources are consistently cited across studies 

because drug companies report their spending directly to these 

agencies, and they represent the best available information. The scope 

of our analysis focused on trends since 1997 because 1997 was when FDA 

issued its draft guidance changing the requirements for broadcast 

advertisements.



To analyze the impact of DTC advertising on drug spending and 

utilization--as measured by prescriptions dispensed--we reviewed 

studies on pharmaceutical sales and examined surveys of consumer 

responses to DTC advertising. For sales information, we primarily 

relied on data from IMS Health and looked at sales of the most heavily 

advertised drugs. To understand consumer responses to DTC advertising, 

we relied on surveys conducted by FDA, Prevention Magazine, Kaiser 

Family Foundation, National Consumers League, AARP, and other 

researchers. Some of these groups have repeated their surveys over 

time. For example, FDA conducted consumer surveys in 1999 and 2002. 

Prevention Magazine, and its parent company, Rodale, Inc., have 

conducted ongoing research on consumer reaction to DTC advertising 

since 1997 with technical assistance from other groups. Its 1997 survey 

was conducted with the American Pharmaceutical Association; its 1998, 

1999, and 2000 surveys were conducted with technical assistance from 

FDA; and its most recent 2001 survey was conducted with FDA and 

Princeton Survey Research Associates. FDA’s and Prevention Magazine’s 

surveys have been conducted with nationally representative samples of 

adults. We also reviewed the literature for published and unpublished 

articles and reports on the effects of DTC advertising and other 

factors on prescription drug spending and utilization. The studies with 

the strongest methodologies were three unpublished studies, one of 

which is in press; the second is a recent Ph.D. dissertation; and the 

third was conducted by a university researcher and was presented to 

pharmaceutical industry representatives in May 2001. All of these 

unpublished studies used data from IMS Health and other firms that 

collect information about the pharmaceutical industry.



To assess FDA’s effectiveness in regulating DTC advertisements, we 

reviewed federal regulations and documents and interviewed officials 

from several offices within FDA, including CDER, DDMAC, and OCC. We 

analyzed regulatory letters issued by FDA between August 1997 and 

August 2002. To avoid double counting, we separated the regulatory 

letters into three categories: letters for broadcast violations, 

letters for print violations, and overlapping letters that address both 

broadcast and print violations. We did not review the content of 

advertisements, nor make an independent assessment of whether 

advertisements complied with the FDA regulations and guidance.



Finally, we interviewed and consulted with pharmaceutical industry 

representatives from Pfizer, Inc., PhRMA, and other key stakeholders, 

including the American Medical Association, Public Citizen, the 

National Advertising Review Council, the Freedom to Advertise 

Coalition, and RxHealth Value. RxHealth Value is a national coalition 

of consumer, provider, business, and employer groups; labor unions; 

insurers and health plans; pharmacy benefits management organizations; 

and academic researchers.



We conducted our work from February 2002 through September 2002 in 

accordance with generally accepted government auditing standards.



[End of section]



Appendix II Surveys of Consumers’ Behavior after Seeing or Hearing 

Direct-to-Consumer (DTC) Advertisements:



Survey: FDA[D]; Sample: N=943, national random sample of consumers who 

had visited a doctor in the last 3 months; Survey date: 2002; Aware of 

advertisement, percentage: 81; Talked with physician percentage[A]: 23; 

Specific prescription requested, percentage[B]: 7; Prescription 

received, percentage of those who made a specific request: 69; 

Prescription received, percentage of total sample[C]: 5.



Survey: FDA[E]; Sample: N=1,081, national random sample, 960 of whom 

had visited a doctor in the last 3 months; Survey date: 1999; Aware of 

advertisement, percentage: 72; Talked with physician percentage[A]: 32; 

Specific prescription requested, percentage[B]: 13; Prescription 

received, percentage of those who made a specific request: 50; 

Prescription received, percentage of total sample[C]: 2.



Survey: Prevention Magazine[F]; Sample: N=1,601 national random sample, 

age 18 or older, oversampled 1,000 males; Survey date: 2001; Aware of 

advertisement, percentage: 85; Talked with physician percentage[A]: 32; 

Specific prescription requested, percentage[B]: 29; Prescription 

received, percentage of those who made a specific request: 77; 

Prescription received, percentage of total sample[C]: 7.



Survey: Prevention Magazine[G]; Sample: N=1,222 national random sample, 

age 18 or older; Survey date: 2000; Aware of advertisement, percentage: 

80; Talked with physician percentage[A]: 32; Specific prescription 

requested, percentage[B]: 26; Prescription received, percentage of 

those who made a specific request: 71; Prescription received,

percentage of total sample[C]: 5.



Survey: Prevention Magazine[H]; Sample: N=1,200 national random sample, 

age 18 or older; Survey date: 1999; Aware of advertisement, percentage: 

81; Talked with physician percentage[A]: 31; Specific prescription 

requested, percentage[B]: 28; Prescription received, percentage of 

those who made a specific request: 84; Prescription received,

percentage of total sample[C]: 7.



Survey: Prevention Magazine[I]; Sample: N=1,200 national random sample, 

age 18 or older; Survey date: 1998; Aware of advertisement, percentage: 

70; Talked with physician percentage[A]: 33; Specific prescription 

requested, percentage[B]: 28; Prescription received, percentage of 

those who made a specific request: 80; Prescription received,

percentage of total sample[C]: 6.



Survey: Prevention Magazine[J]; Sample: N=1,202 national random sample, 

age 18 or older; Survey date: 1997; Aware of advertisement, percentage: 

63; Talked with physician percentage[A]: 31; Specific prescription 

requested, percentage[B]: 29; Prescription received, percentage of 

those who made a specific request: 73; Prescription received,

percentage of total sample[C]: 4.



Survey: Weissman et al.[K]; Sample: N=3,000 national random sample, 

adults; Survey date: 2001-2002; Aware of advertisement, percentage: 86; 

Talked with physician percentage[A]: 35; Specific prescription 

requested, percentage[B]: 27; Prescription received, percentage of 

those who made a specific request: 21; Prescription received,

percentage of total sample[C]: 5.



Survey: Kaiser Family Foundation[L]; Sample: N=2,511 national random 

sample, 872 DTC advertisement viewers compared to 639 DTC advertisement 

non-viewers; Survey date: 2001; Aware of advertisement, percentage: N/

A[M]; Talked with physician percentage[A]: 30; Specific prescription 

requested, percentage[B]: N/A; Prescription received, percentage of 

those who made a specific request: 44; Prescription received,

percentage of total sample[C]: 6.



Survey: National Consumers League[N]; Sample: N=1,013 national random 

sample, age 18 or older; Survey date: 1998; Aware of advertisement, 

percentage: 80; Talked with physician percentage[A]: 44; Specific 

prescription requested, percentage[B]: N/A; Prescription received, 

percentage of those who made a specific request: 22; Prescription 

received, percentage of total sample[C]: 5.



Survey: AARP[O]; Sample: N=1,310 national, oversampled 50 or older 

(print only); Survey date: 1998; Aware of advertisement, percentage: 

65; Talked with physician percentage[A]: N/A; Specific prescription 

requested, percentage[B]: N/A; Prescription received, percentage of 

those who made a specific request: N/A; Prescription received,

percentage of total sample[C]: N/A.



Survey: Bell et al.[P]; Sample: N=329 random sample of Sacramento 

residents; Survey date: 1998; Aware of advertisement, percentage: 3.7 

of 10 drug advertisements[Q]; Talked with physician percentage[A]: 35; 

Specific prescription requested, percentage[B]: 19; Prescription 

received, percentage of those who made a specific request: N/A; 

Prescription received, percentage of total sample[C]: N/A.



Survey: Mintzes et al.[R]; Sample: N=38 physician and 748 patients in 

Sacramento age 18 or older; Survey date: 2001; Aware of advertisement, 

percentage: 72; Talked with physician percentage[A]: N/A; Specific 

prescription requested, percentage[B]: 7; Prescription received, 

percentage of those who made a specific request: 78; Prescription 

received, percentage of total sample[C]: 6.



[A] In the FDA surveys consumers were asked, “Did you ask whether there 

might be a prescription drug to treat your condition?” This question 

was not asked of consumers who thought that their doctor would keep 

them on their current drug in FDA’s 1999 survey. The Prevention 

Magazine surveys asked “Did you speak with your doctor about an 

advertised prescription medicine?” The percentage reported is based on 

consumers who had seen an advertised prescription medication and 

subsequently spoke with their doctor about it.



[B] In the 1999 FDA survey, this question was not asked of consumers 

who thought that their doctor would keep them on their current drug. In 

the Prevention Magazine Surveys, this question was asked only of 

consumers who spoke with their doctors about an advertised medicine.



[C] Percentages are calculated by dividing the number of consumers who 

received the prescription requested by the total sample. For FDA’s 1999 

survey, this information was provided to us because the information was 

unavailable in its on-line survey.



[D] Kathryn J. Aikin, Direct-to-Consumer Advertising of Prescription 

Drugs: Preliminary Patient Survey Results (Rockville, Md.: FDA, 

Division of Drug Marketing, Advertising and Communications, April 

2002).



[E] FDA, Office of Medical Policy, Division of Drug Marketing, 

Advertising and Communications, “Attitudes and Behaviors Associated 

with Direct-to-Consumer (DTC) Promotion of Prescription Drugs: Main 

Survey Results” (Rockville, Md.: FDA, Division of Drug Marketing, 

Advertising and Communications, 1999), http://www.fda.gov/cder/ddmac/

dtcindex.htm (downloaded March 11, 2002).



[F] Ed Slaughter, 5th Annual Survey: Consumer Reaction to DTC 

Advertising of Prescription Medicines, 2001-2002 (Emmaus, Pa.: Rodale, 

Inc., 2002). Technical assistance in developing the survey was provided 

by FDA and Princeton Survey Research Associates.



[G] Ed Slaughter and Martha Schumacher, Prevention’s International 

Survey on Wellness and Consumer Reaction to DTC Advertising of Rx 

Drugs, 2000-2001 (Emmaus, Pa.: Rodale, Inc., 2001). Technical 

assistance in developing the survey was provided by FDA.



[H] Prevention Magazine, Year Two: A National Survey of Consumer 

Reactions to Direct-to-Consumer Advertising, 1999 (Emmaus, Pa.: Rodale, 

Inc., 1999). Technical assistance in developing the survey was provided 

by FDA.



[I] Prevention Magazine, National Survey of Consumer Reactions to 

Direct-to-Consumer Advertising, 1998 (Emmaus, Pa.: Rodale Press, 1998). 

Technical assistance in developing the survey was provided by FDA.



[J] Prevention Magazine, Navigating the Medication Marketplace: How 

Consumers Choose, 1997 (Emmaus, Pa.: Rodale Press and APhA, 1997). 

Technical assistance in developing the survey was provided by the 

American Pharmaceutical Association.



[K] Joel S. Weissman, David Blumenthal, Alvin Silk, Kinga Zapert, 

Michael Newman, and Robert Leitman, “Consumer Reports on the Health 

Effects of Direct-to-Consumer Advertising (DTCA) of Prescription Drugs” 

(paper presented at the annual meeting of the Association for Health 

Services Research, Washington, D.C., June 2002).



[L] Henry J. Kaiser Family Foundation, Understanding the Effects of 

Direct-to-Consumer Prescription Drug Advertising (Menlo Park, Calif.: 

Henry J. Kaiser Family Foundation, 2001).



[M] N/A means that consumers were not asked this question.



[N] National Consumers League, “Health Care Information and the 

Consumer: A Public Opinion Survey” (Washington, D.C.: National 

Consumers League, 1998).



[O] Lisa Foley and David Gross, Are Consumers Well Informed About 

Prescription Drugs? The Impact of Printed Direct-to-Consumer 

Advertising (Washington, D.C.: AARP, 2000).



[P] Robert A. Bell, Richard L. Kravitz, and Michael S. Wilkes, “Direct-

to-Consumer Prescription Drug Advertising and the Public,” Journal of 

General Internal Medicine, vol. 14 (1999).



[Q] Consumers were asked whether they had seen an advertisement for 

each of 10 drugs that were being advertised at the time of the survey. 

An Ad Awareness Index was created by summing for each respondent the 

number of drugs for which she or he reported having seen an 

advertisement. On average, consumers were aware of 3.7 of the 10 drugs.



[R] Barbara Mintzes, Morris Barer, Richard Kravitz, Arminee Kazanjian, 

Ken Bassett, Joel Lexchin, Bob Evans, Richard Pan, and Steve Marion, 

“Patient Requests for Prescriptions in Environments with and without 

Legal Direct-to-Consumer Advertising” (paper presented at the annual 

meeting of the Association for Health Services Research, Washington, 

D.C., June 2002).



[End of table]



[End of section]



Appendix III: Comments from the Department of Health and Human 
Services:



OCT 11 2002:



Ms. Janet Heinrich:



Director, Health Care - Public Health Issues, United States General:

Accounting Office Washington, D.C. 20548:



Dear Ms. Heinrich:



Enclosed are the department’s comments on your draft report entitled, 

“Prescription Drugs: FDA Oversight of Direct-to-Consumer Advertising 

Has Limitations.” The comments represent the tentative position of the 

department and are subject to reevaluation when the final version of 

this report is received.



The department also provided several technical comments directly to 

your staff.



The department appreciates the opportunity to comment on this draft 

report before its publication.



Sincerely,



Janet Rehnquist, Inspector General



Signed by an official for Janet Rehnquist



Enclosure:



The Office of Inspector General (OIG) is transmitting the department’s 

response to this draft report in our capacity as the department’s 

designated focal point and coordinator for General Accounting Office 

reports. The OIG has not conducted an independent assessment of these 

comments and therefore expresses no opinion on them.



Comments of the Department of Health and Human Services on the General 

Accounting Office’s Draft Report, “Prescription Drugs: FDA Oversight of 

Direct-To-Consumer Advertising Has Limitations” (GAO-03-177):



The Department of Health and Human Services (the department) 

appreciates the opportunity to review and comment on this draft report. 

While we take issue with some of the report’s conclusions about the 

impacts of direct-to-consumer (DTC) advertising, the department 

generally agrees with the report’s informative summary of issues with 

respect to the Food and Drug Administration’s (FDA) oversight of DTC 

advertising. We are especially pleased with GAO’s conclusion that FDA 

oversight is “...generally effective at halting the dissemination of 

advertisements it reviews and identifies as misleading.”:



General Comments:



The report discusses the department’s policy change requiring FDA’s 

Office of the Chief Counsel (OCC) to review all draft warning and 

untitled letters. The purpose of the policy that OCC review all 

enforcement correspondence, including Division of Drug Marketing, 

Advertising, and Communications (DDMAC) letters, is to ensure that such 

letters rest on a solid legal foundation, are credible, and will 

promote compliance. Before this policy was instituted, there had been 

complaints that FDA would not follow up on many of its letters. Indeed, 

some FDA Centers sent several advertising/promotion enforcement letters 

to companies that had ignored FDA’s first warning.



The policy’s goal is for those who receive enforcement correspondence 

from the agency to understand that it has undergone legal review, and 

that the agency is prepared to back it up by going to court if 

necessary. Before this policy went into effect, certain letters were 

sent out without considering their legal sufficiency because it was 

believed the issue would never get to court. If this approach became 

apparent to the public, the credibility of the agency would suffer as 

companies test whether the agency truly intends to stand behind a 

particular letter.



The FDA cannot afford to be considered a paper tiger. When FDA takes a 

position, companies must believe that FDA can and will back it up by 

going to court if necessary. The FDA cannot sue the thousands of firms 

it regulates into compliance; it must take positions that promote 

voluntary compliance. Therefore a change was found to be necessary and 

desirable.



While this policy change has, as GAO indicated, increased the number of 

days between DDMAC’s identification of a misleading advertisement and 

FDA’s request to remove it from dissemination, the process is new and 

the agency anticipates that the number of days required for review of 

draft warning and untitled letters will decrease.



The OCC has concurred with pursuing all DTC regulatory letters 

submitted by DDMAC. The OCC review has strengthened the quality and 

legal sustainability of the letters making it much more likely that 

companies take them seriously and quickly react to problems identified 

in the letter. Nevertheless, the department recognizes that despite the 

important value added by OCC, we need to issue DTC enforcement 

correspondence more quickly. To that end, we have established a goal of 

issuing these letters within 15 working days of review at OCC.



[End of section]



FOOTNOTES



[1] Robert W. Dubois, Anita J. Chawla, Cheryl A. Neslusan, Mark W. 

Smith, and Sally Wade, “Explaining Drug Spending Trends: Does 

Perception Match Reality?” Health Affairs, vol. 19 (2000), 231-39. 



[2] 21 U.S.C. § 502(n).



[3] 21 C.F.R. § 202.1(e).



[4] 21 C.F.R. § 314.81(b)(3)(i).



[5] The guidance was finalized in 1999. 



[6] In this report, we use three terms to describe the magnitude of 

prescription drug use. “Utilization” refers to the number of 

prescriptions dispensed. “Spending” and “sales” refer to the amount of 

money spent for prescription drugs and are a function of both 

utilization and price.



[7] David H. Kreling, David A. Mott, Joseph B. Wiederholt, Janet Lundy, 

and Larry Levitt, Prescription Drug Trends: A Chartbook Update, pub. 

no. 3112 (Washington, D.C.: The Henry J. Kaiser Family Foundation, 

2001). 



[8] NIHCM Foundation, Prescription Drug Expenditures in 2001: Another 

Year of Escalating Costs (Washington, D.C.: NIHCM Foundation, 2002).



[9] Kreling, Mott, Wiederholt, Lundy, and Levitt, Prescription Drug 

Trends: A Chartbook Update, 8.



[10] Centers for Disease Control and Prevention, “Prevalence of 

Arthritis--United States, 1997,” MMWR, vol. 50 (2001), 334-6.



[11] National Institutes of Health, Third Report of the National 

Cholesterol Education Program (NCEP) Expert Panel on Detection, 

Evaluation, and Treatment of High Blood Cholesterol in Adults (Adult 

Treatment Panel III), Executive Summary, NIH pub. no. 01-3670 

(Rockville, Md.: NIH, May 2001.)



[12] IMS Health, Inc.,”IMS Health Reports 11% Growth in Retail Pharmacy 

Drug Sales for the 12 Months to April 2002” (Fairfield, Ct.: IMS 

Health, 2002), http://www.imshealth.com/public/structu (downloaded 

September 26, 2002). Based on sales from wholesalers to retail 

pharmacies, with sales measured in U.S. dollars at a constant exchange 

rate. 



[13] FDA, Guidance for Industry: Consumer-directed Broadcast 

Advertisements (Washington, D.C.: FDA, Aug. 1997).



[14] Pharmaceutical Research and Manufacturers of America, 

Pharmaceutical Industry Profile 2002 (Washington, D.C.: Pharmaceutical 

Research and Manufacturers of America, 2002); IMS Health Integrated 

Promotional Services, “Total U.S. Promotional Spending by Type, 2001” 

(Fairfield, Ct.: IMS Health, 2002), http://www.imshealth.com/public/

structu (downloaded July 17, 2002). We did not independently verify the 

amounts reported by the Pharmaceutical Research and Manufacturers of 

America and IMS Health. However, many researchers have consistently 

cited these data sources, and they represent the best available 

information. 



[15] Television broadcasts constitute the majority of nonprint DTC 

advertising spending. 



[16] Kreling, Mott, Wiederholt, Lundy, and Levitt, Prescription Drug 

Trends: A Chartbook Update; IMS Health Integrated Promotional Services, 

“Total U.S. Promotional Spending by Type, 2001.” These figures do not 

include educational meetings arranged by pharmaceutical companies for 

physicians, which are not generally considered to be promotional 

activities. Pharmaceutical companies spent about $1.9 billion on 

educational meetings in 2000. (See NIHCM Foundation, Prescription Drugs 

and Mass Media Advertising, 2000 (Washington, D.C.: NIHCM Foundation, 

2001)). 



[17] NIHCM Foundation, Prescription Drugs and Mass Media Advertising, 

2000. 



[18] IMS Health Inc., “Product Sampling Continues to Spike in US” 

(Fairfield, Ct.: IMS Health, 2002), http://www.imshealth.com/public/

structure/dispcontent (downloaded May 16, 2002).



[19] Barbara Henderson, “IMS Study: U.S. Physicians Responsive to 

Patient Requests for Brand Name Drugs” (Fairfield, Ct.: IMS Health, 

2002), http://www.imshealth.com/public/structure/dispcontent 

(downloaded May 16, 2002).



[20] Lisa R. Basara, “The Impact of a Direct-to-Consumer Prescription 

Medication Advertising Campaign on New Prescription Volume,” Drug 

Information Journal, vol. 30 (1996), 715-29. 



[21] Meredith B. Rosenthal, Julie M. Donohue, Arnold M. Epstein, and 

Richard G. Frank, Demand Effects of Recent Changes in Prescription Drug 

Promotion, June 22, 2002 (forthcoming, available on the Web as of Oct. 

21, 2002, at http://www.nber.org/books/garber6/index.html); Scott 

Neslin, “ROI Analysis of Pharmaceutical Promotion (RAPP): An 

Independent Study” (unpublished presentation, Hanover, N.H.: Dartmouth 

College, Amos Tuck School of Business, May 2001); Marta E. Wosinska, 

“The Economics of Prescription Drug Advertising” (Ph.D. diss., 

University of California, Berkeley, 2002).



[22] Each of the studies also found that promotion to physicians was 

more cost effective than DTC advertising. 



[23] This estimate implies that DTC advertising can substantially boost 

sales for high-volume drugs because sales figures are often much larger 

than advertising expenditures. For example, in 2000 the top-selling 

drug, Prilosec, had sales of $4.1 billion and DTC advertising 

expenditures of $108 million. If this estimate applied to individual 

prescription drugs, each increase in DTC spending of $1 million would 

have increased sales of Prilosec by $4 million.



[24] John E. Calfee, Clifford Winston, and Randolph Stempski, Direct-

to-Consumer Advertising and the Demand for Cholesterol-reducing Drugs 

(Washington, D.C.: American Enterprise Institute, 2001).



[25] Based on figures in the 2001 Statistical Abstract of the United 

States, we estimate that about 170 million adults visited a physician 

in 2000; 8.5 million is 5 percent of 170 million. 



[26] In total, DDMAC had 39 full-time-equivalent positions in fiscal 

year 2002, most of which were dedicated to the oversight of promotional 

communications directed to physicians.



[27] DDMAC tabulates all of the pieces of promotional material 

submitted to it, but, with the exception of broadcast advertisements, 

it does not categorize the types of submissions it receives. DDMAC 

officials told us that it received approximately 34,000 pieces of 

promotional material, including consumer advertisements and promotions 

to physicians, in 2001, but that they do not know how many DTC print 

advertisements were submitted. 



[28] FDA’s DTC regulatory letters are posted on the Web at http://

www.fda.gov/cder/warn/. FDA sometimes sends a single letter for 

violative DTC advertisements that appear in both broadcast and print 

mediums.



[29] Company names listed here are based on the names as of the date of 

the last regulatory letter that they received. 



[30] The cable networks monitored are CNBC, CNN, CSPAN, CSPAN2, MSNBC, 

and CNNFN. The network affiliates monitored are WNBC, WABC, WCBS, WNET, 

and WNYW. 



[31] The 45-working-day goal is only for OCC’s own work on a draft 

letter. Thus OCC’s clock stops when it returns a draft letter to DDMAC 

for clarification or further research, and it resumes when DDMAC 

resubmits the draft letter.



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