The biotech industry continues to make strides. Over the last 10 years, more than 160 new biotech medicines have hit the market, while 370 new medicines are in development, according to Bio, the biotechnology industry's trade organization.
So far, a lot of the biotech development effort has concentrated on life-threatening diseases, such as cancer, or conditions that affect relatively small numbers of people, such as hemophilia. More recently, though, biotech outfits have moved into diseases that don't fit in these categories. For instance, Genentech (NYSE: DNA) and Novartis' (NYSE: NVS) asthma medication, Xolair, addresses a fairly large population and a malady that isn't necessarily life-threatening.
The expansion into new indications means that biotech drugs now have the potential to benefit many more people. The challenge for biotech firms, then, is getting this message out and increasing awareness and use of their drugs. Amgen (Nasdaq: AMGN) recently decided to follow in the footsteps of pharmaceutical giants like Pfizer (NYSE: PFE) by taking its message straight to the public. The firm launched a television commercial for its drug Enbrel, touting the medication's effectiveness in treating the skin condition psoriasis.
Unfortunately for Amgen, the Food and Drug Administration was not so pleased with the TV ad and forced the company to pull it from the market. To catch viewers' attention, Amgen tossed in a bit of the hyperbole that is fairly common in most commercials, calling Enbrel a "breakthrough" and claiming that the drug can clear skin up quickly. In drug advertising, though, exaggeration is strictly off-limits. Since other products offer the same benefits as Enbrel, the FDA took issue with Amgen's claim that it is a breakthrough. The regulatory body also noted that the treatment neither completely clears skin of psoriasis lesions nor acts quickly, since it takes a couple months to see results. Perhaps most significant, the FDA felt Amgen's ad minimized the risks associated with Enbrel, which may include developing tuberculosis.
This case illustrates the pitfalls of direct-to-consumer (DTC) advertising for the biotech segment. Now on the defensive following the COX-2 revelations, the FDA is likely to be tougher on ads. Commercials that delve into the minutiae of a treatment's effectiveness or warn of all the potential risks aren't likely to play well with consumers, though, so for now, Amgen and its biotech brethren may be better served by staying away from DTC ads.
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.
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