Are we finally getting a reprieve? Will we soon be able to watch a sporting event without hearing about some guy's erectile dysfunction every 15 minutes? Maybe even get a break from the seemingly constant deluge on the horrors of urinary incontinence, high cholesterol, or nail fungus?
Possibly, but I'm not holding my breath.
Bristol- Myers Squibb (NYSE:BMY) announced Wednesday that it would forgo direct-to-consumer advertisements for new drugs for at least a year. Instead of launching immediate ad campaigns, Bristol-Myers will focus instead upon educating doctors in the first year after approval and working with them to explain the risks and benefits of the drug(s) in question.
This decision comes amidst growing complaints that the drug industry is abusing its privileges with respect to direct-to-consumer advertising. In particular, some advocates have claimed that aggressive advertising of drugs like Merck's (NYSE:MRK) Vioxx and Pfizer's (NYSE:PFE) Celebrex have led patients to press doctors for medication that they don't really need and/or don't understand with respect to the risks.
Other advocates claim that pharmaceutical advertising is partly responsible for the high cost of prescription drugs. This claim is basically bunk, as pharmaceutical companies spend only a fraction of their marketing budget on direct-to-consumer advertising as opposed to direct-to-physician marketing and "detailing." That said, the amounts spent can nevertheless add up -- exceeding $3 billion a year for all forms of media.
It's hard to say whether or not other companies will follow suit. TAP Pharmaceuticals recently pulled about $100 million in TV advertising for Prevacid, but most of that money will be redeployed to other forms of direct-to-consumer promotion. Johnson & Johnson (NYSE:JNJ) has also opted to change its approach -- adopting a set of principles that should lead to a more frank discussion of potential side effects. Elsewhere, representatives of the industry have been working on a voluntary code of conduct with respect to advertising.
It's far too soon to say what, if any, impact this will have on the industry. After all, Bristol-Myers isn't forgoing advertising to consumers completely -- it's simply postponing it for a year. But it's clear that there is a growing concern among patients, advocates, regulators, and politicians about the impact of consumer drug marketing.
If the industry is smart, companies will work together with the FDA to formulate a reasonable approach that affords them the freedom to market their goods, but with a frank discussion of the risks and drawbacks as well. After all, having the government step in to solve a problem usually isn't much better than when you fought your siblings and had your parents break it up -- nobody wins in the end or gets what they originally wanted.
For more on the drug sector so you don't go through media drug withdrawal, check out:
- The High Cost of Diabetes
- "Bad News" for Teva? Yawn.
- Once More With Merck
- Waiting for Sanofi's Next Act
Fool contributor Stephen Simpson owns shares of Johnson & Johnson. The Fool has an iron-clad disclosure policy.
