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Biotech / Medical : Biotech Valuation
CRSP 55.52-8.7%Jan 23 9:30 AM EST

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To: Harold Engstrom who wrote (7418)12/4/2002 9:25:59 PM
From: John Metcalf  Read Replies (1) of 52153
 
I know that you're already riled, Harold. I apologize in advancing for interrupting a wood-shedding with news of a GAO report on FDA's role in policing drug advertising. FWIW, there have been many times I've thought the FDA had strayed far afield in going after ads. Every time I sit through the endless recitations of cautionary statements in a drug-ad, I wonder how much the company is spending at FDA's direction to make the recitation! And then, the company is criticized for what it spends on ads, after govt requirements have increased the costs.

As a taxpayer, can I follow your lead and unsubscribe from FDA's free service of requiring repetition of low-incidence adverse reaction data?

FDA Has Limitations in Policing Drug Ads


By JANELLE CARTER 12/04/2002 17:03:12 EST

WASHINGTON (AP) - It takes federal regulators so long to approve a letter aimed at stopping
misleading drug advertisements that often the ad campaign is over before the drug company receives
the letter, a report said Wednesday.

The report by the General Accounting Office, the investigative arm of Congress, detailed some
limitations of the Food and Drug Administration's oversight of direct-to-consumer advertising by drug
companies, which has tripled since the FDA loosened drug promotion rules in 1997.

Many drug companies promote their products to consumers through ads in magazines and broadcasts on
radio and television. The industry spent $2.7 billion on consumer advertising in 2001, the report
said.

The FDA is responsible for seeing that the ads are fair and accurate, but the report found a number of
problems in getting misleading advertisements removed.

For instance, many pharmaceutical companies have run misleading advertisements for a particular
drug again and again. Others did not submit new ads to the FDA in a timely manner for review. Under
government regulations, drug companies must submit all ads to the FDA once they are disseminated to
the public.

Drug manufacturer Pfizer, for instance, was issued four letters over the last four years about
broadcast and print advertisements for its cholesterol-lowering drug Lipitor. The agency said the ads
gave the false impression that Lipitor can reduce heart disease and falsely claimed that Lipitor is safer
than competing drugs.

One improvement that could be made is for the agency to expedite the review of regulatory letters sent
to a drug company about an advertising violation, the report said.

Since January, the Department of Health and Human Services, which oversees FDA, has said that no
violation letter can be issued until FDA's Office of Chief Counsel reviewed them. The agency has said the
additional review was needed to ensure "legal sufficiency and consistency with agency policy."

But the report said it now often takes weeks for a letter to get approved. Most advertisements run for
just a short time.

In a response, Janet Rehnquist, HHS's inspector general, defended the more extensive review but said
the agency would work to review letters within 15 days. "The FDA cannot afford to be considered a
paper tiger," Rehnquist wrote. "When FDA takes a position, companies must believe that FDA can and
will back it up by going to court if necessary."

In a related matter, the report answered a long-standing concern by Democratic critics that the
industry spends more on advertising than on research. Spending on research and development was 10
times more than on drug advertising in 2001. It is estimated that companies spent $30.3 billion on
research and $19.1 billion on all promotional activities, which includes $2.7 billion in
direct-to-consumer advertising.

Rick Smith, senior vice president for policy and research for the Pharmaceutical Research and
Manufacturers of America, said the findings proved that "The mythology that's gone up about how
pharmaceutical companies are spending money is wrong."

___

The report can be found at gao.gov
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