DTC, for Better or Worse, is Here to Stay OpEd by John Mack
When the Democratic-led Congress started debating the Food and Drug Administration Revitalization bill earlier this year, many drug companies worried that DTC “moratoriums and other restrictions on DTC would flourish,” says Rich Buckley, vice president of federal government affairs at AstraZeneca. Now, he says, consumer drug marketing “is here to stay.”
That’s because the version that passed in the Senate, which is sure to be signed into law, lacked any restrictions on DTC, although it does give the FDA some new powers over DTC.
It’s Mostly About the Money
Firstly, FDA gets new fees for reviewing DTC broadcast ads before they are aired on TV. According to the S.1082: “There are authorized to be appropriated for fees under this section not less than $6,250,000 for each of fiscal years 2008, 2009, 2010, 2011, and 2012…”
In 2005, about 4,600 print and TV DTC pieces were submitted for review. Maybe 2,000 were TV-related. If FDA gets more money to review TV ads, this could increase to 3,000. The fee per piece (eg., storyboard for one ad) works out to about $2,000. This seems like a lot of money to review a single piece. I could do it for $1,000! If FDA were to hire me, therefore, it could pocket about $1,000 for every ad it previewed.
According to an Advertising Age article, “the legislation’s main effect is to boost the number of people at the FDA who will review ads.” FDA has said that the $6+ million would be used to pay an additional 27 staffers. That works out to about $231,481.48 per person per year. Where’s the job application? I’ll sign up today.
Secondly, it’s about the fines. According to the Advertising Age article cited above, “[the legislation] also gives the FDA new authority to fine advertisers up to $250,000 a day for continuing to run any ads challenged as misleading and up to $500,000 a day for a second instance within three years.”
Get Out Of Jail Free Card
On first reading of the above, it would seem that the drug industry did not get what it wanted; ie, a “get of jail free card” for ads pre-approved by the FDA. That is, the industry wanted all pre-approved ads to be exempt from fines or warning letters after the fact.
But let’s dive deeper and actually read the legislation, the relevant portion of which states: “Subject to subparagraph (B), no applicant shall be required to pay a civil penalty under paragraph (1) if the applicant submitted the advertisement to the Secretary and disseminated such advertise-ment after incorporating any comment received from the Secretary.”
Therefore, the industry DID get a “Get Out of Jail Free” card after all!
Issue: Vol. 6, No.8: September 2007
Word Count: n/a
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