Public Policy Issues in Direct-to-consumer Advertising of Prescription Drugs. [i]Revised July 2002[/i]

Abstract

In August 1997, the Food and Drug Administration announced a reinterpretation of its rules on DTC advertising, the effect of which was to permit branded broadcast ads and to increase the volume of DTC advertising several-fold. A substantial body of research, consisting primarily of consumer surveys, provides the basis for a preliminary assessment of the effects of DTC ads. The FDA's own assessment, that DTC ads provide substantial benefits and modest costs, is consistent with survey and other data. DTC ads appear to provide valuable information (including risk information), induce information-seeking (mainly from physicians), prompt patients to discuss conditions not previously discussed, and generate significant positive externalities including the possibility of improved patient compliance with drug therapy. The effects on drug consumption and on health care have yet to be assessed. The evidence to date suggests that a further relaxation of FDA rules would accelerate the dissemination of valuable information, with favorable consequences for drug development and consumer health.