August 27, 2001

Legislative Activity

The following information was sent in a letter the week of August 27 to AAF clubs located in the districts represented by a Member on the House Energy and Commerce or House Ways and Means Committee.

Threat to Direct To Consumer Advertising of Pharmaceuticals

The staffs of the House Ways and Means and Energy and Commerce Committees working on prescription drug benefit legislation have been instructed to draft proposed language to restrict the ability of pharmaceutical companies to use direct to consumer (DTC) advertising.

Congress is under considerable pressure from pharmacy benefit managers (PBM's) and insurance companies, in addition to the pressure being created by newly released reductions in the estimates of the budget "surplus," to find a way to keep down the cost of the new program. PBMs and insurers contend that DTC advertising drives up prices and utilization, and that Congress must cut back on or provide disincentives to advertise as part of the package.

The goal is for the Energy and Commerce and Ways and Means Committees to mark up a prescription drug benefit by mid-September. It is possible that only the Ways and Means Committee may actually mark up a bill, but both Committee staffs are actively engaged in developing the legislation.

Among the various provisions that we believe are under discussion are the following:

  • Repeal the authority the Food and Drug Administration relied on to issue its 1997 guidance to permit broadcast advertising of prescription drugs without requiring simultaneous detailed presentation of risks and contraindications along with the benefits. The FDA has interpreted its guidance concerning the balance required between risks and benefits as being met if the advertiser offers the detailed information in other venues including newspapers, magazines and the Internet.
  • Impose a financial penalty on consumers for selecting a prescription drug that is being advertised. Establish different reimbursement schedules under the new Medicare prescription drug benefit that would pay less for a drug that is being advertised than for other drugs that are not being advertised.
  • Structure the reimbursement to the manufacturers so that their payments are reduced for prescription drug products that they are advertising.

Your member of Congress sits either on the House Energy and Commerce or Ways and Means Committee. A member list for each committee and corresponding clubs is available on our website at www.aaf.org/government/election_congress.html or by calling Jennifer Akridge at (202) 371 2333.

Please send a copy of your correspondence to us here at AAF headquarters. Thank you for your help with this important issue.

The points you should make are:

  • We understand that the House Republican Leadership is developing a provision in the Medicare prescription drug legislation that would penalize the advertising of prescription drugs.
  • We strongly oppose any proposal that would impose regulatory or financial penalties on advertisers or consumers because advertisers have exercised their First Amendment right to truthfully advertise a legal product such as prescription medicines.
  • The U.S. Supreme Court has over the past 25 years clearly articulated that the First Amendment extends to commercial speech such as advertising, and the Court has established procedures for evaluating whether government action runs counter to that protection. We believe the proposals that are under discussion are in direct conflict with now established constitutional precedents.
  • DTC advertising has proven to be an unexpected success at raising awareness of all Americans about health conditions that are undiagnosed and untreated. 23 million Americans have gone to see a doctor about a condition they never previously discussed because they saw advertising for prescription medicines. This is a tremendous public health benefit.
  • We urge you not to adopt any proposal that would limit or penalize the use of this important form of public health communication.