Davidson Sums Up Past and Current State of DTC Ad Restrictions, Ad Tax Deduction

June 7, 2016 – The Advertising Coalition (TAC) Executive Director Jim Davidson gave industry’s next generation a comprehensive overview of the battle the prescription drug industry has fought over the years to protect its right to advertise at the recent Coalition for Healthcare Communication Rising Leaders Conference held in May in Washington, D.C.

Davidson summarized industry’s long history of defending prescription drug advertising and noted that with today’s intense focus on rising health care costs, the marketing budgets for all types of healthcare providers are being criticized, “but nothing like what the pharma industry has received.”

Of particular note is a statement issued by Hillary Clinton’s campaign at the end of last year which said that DTC advertising can include confusing, misleading or incomplete information or exaggerated claims if not regulated effectively. This stance, Davidson said, “is a precursor of what a Clinton administration might propose right away for prescription drug advertising.” He predicted that because Clinton already has taken a position on this issue, if elected, she will follow through. “She’s been a committed critic of prescription drug advertising for a long time,” he said.

And Clinton is not alone in taking this position. Both the American Medical Association and the American Academy of Family Physicians have come out publicly against direct-to-consumer (DTC) advertising, and members of Congress, such as Rep. Rosa DeLauro (D-Conn.) and others, are suggesting DTC bans in new legislation. This issue “is starting to catch fire again,” Davidson said. “It’s a cyclical thing.”

Interestingly, many who oppose DTC advertising are calling for FDA review of prescription drug DTC ads, which already exists. “One of the things that is still misunderstood is the extent to which the FDA plays a major role in the review of advertising right now,” he said. “It’s almost washed over, just ignored in media criticisms, and it’s a point that we’ll be making a stronger case for in the coming year.”

He added that the FDA has announced an update to its 2002 DTC National Advertising Survey that will focus more on online advertising, which TAC is tracking. “We want to make sure that [FDA’s] oversight committees – the Health Subcommittee of the House Energy & Commerce Committee and the Senate Health, Education, Labor & Pensions Committee – are fully briefed on what the pitfalls are of some of the proposals that we are expecting to come from FDA.”

An important part of the narrative, he said, is to help the public and members of Congress understand that advertising can be just as important as, if not more important than an editorial or an article to keep consumers informed of certain conditions and treatment options.

Davidson then addressed the specter of the prescription drug industry losing the tax deduction for marketing costs, which seems more and more on the table than it has been in the past because it is an attractive target of tax reformers. He predicts a major rewrite of the tax code no matter who wins the presidential election, and implored attendees at the Coalition conference to become actively involved in the debate.

“How willing are you to stand up and push back? You all are constituents of some member, some place. Don’t let the opportunity go by to tell them that you work in this industry and you are concerned about this issue and you hope they would oppose any restriction on advertising,” he said. Although he does not think that a complete ban on DTC advertising will occur, removing the ad tax deduction would be a huge blow to the industry, and that the combination of restrictions could become such a barrier “that companies will say ‘is it really worth doing this?’”

He concluded by again encouraging industry communicators to get the word out about the benefits of prescription drug advertising. “If we don’t get it out to folks across the industry and the country we are going to get outnumbered,” he cautioned. “So if I can leave you with one message, it is this: Get active.”