The Food and Drug Administration brought out the paddywagon last week, issuing 14 warning letters all circling around the same theme: It's still an ad, even if you have to click on it.
The agency requires direct-to-consumer advertisements to include side effect information if they indicate what the drug is used for. But "sponsored links" that you get in the results of an internet search for a disease or drug name don't contain warning information, and the FDA wants the drugmakers to stop making claims in those advertisements.
Pretty much all the major drugmakers -- Johnson & Johnson
Avoiding "sponsored links" will change the way drugmakers advertise, but I'm not convinced it'll be a major problem for sales. I imagine that most of the advertisements were effective for increasing brand recognition -- or convincing patients to switch from, say, Pfizer's
The bigger losers in the FDA crackdown are Google
One has to wonder why the FDA picked now to issue the warnings, since the drugmakers have been advertising like this for quite a while. If the new administration has decided to be generally tougher on pharmaceutical companies, that's certainly bad news for the industry, and a trend worth watching for investors.
Johnson & Johnson is an Income Investor pick. Microsoft and Pfizer are Inside Value recommendations. Elan and Google are Rule Breakers picks. Biogen Idec is a Stock Advisor pick. Try any of our Foolish newsletter services free for 30 days.
Fool contributor Brian Orelli, Ph.D., wonders whether the Google AI thinks he's a walking disaster, considering all the drugs he searches for daily. He doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.