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Risk Management
New Directions in Pharmaceutical Promotion

by Louis A. Morris, Pharmaceutical Executive, May 2004

ince the 1962 amendments to the Federal Food, Drug and Cosmetic Act (the Act), overseeing pharmaceutical promotion has been under the
jurisdiction of the Food and Drug Administration (FDA). Under the Act, the FDA regulates pharmaceutical advertising and labeling to assure that promotional materials are not false or misleading and that they provide adequate risk disclosures.

During the initial years of FDA regulation, pharmaceutical marketers provided a continuous flow of material to health care providers. For the most part, these materials described he results of scientific studies and the clinical impact of pharmaceutical products. The materials were directed primarily at health care providers, particularly prescribing professionals. FDA staff reviewed promotional materials for compliance with the Act and regulations and provided feedback to the industry, primarily in the form of letters noting marketing claims and practices considered to be false or misleading, lacking in fair balance, or otherwise in violation of the Act.

  Over the past two decades, the FDA has continued to review promotional materials and provide regulatory feedback regarding observed violations. However, in our view, much has changed in the nature and type of promotion. Innovation in the development of new pharmaceutical products and an explosion in the number of distribution channels for advertising information have dramatically changed the face of pharmaceutical promotion. Our speculation is that two fundamental changes in the pharmaceutical marketplace- the increase in generic competition and the movement to managed care insurance coverage- have produced profound changes in pharmaceutical marketing. We further speculate that numerous technological, demographic, and economic changes have also played significant parts in dramatically shifting the focus, means, and desired endpoints of pharmaceutical promotion.

It is difficult, if not impossible, to prove casual relationships for broad, societal change. However, one is free to conjure up presumed explanations. Our belief is that in the late 1970s and early 1980s pharmaceutical brand managers, for the first time, faced the prospect of losing the majority of their market share within a few years of patent expiration. Generic competition placed a great burden on marketers to recover developmental costs in ever-briefer time frames. Marketing managers reacted with early and aggressive marketing for their products. During the late 1980s and early 1990s, pharmaceutical marketers began to compete on the basis of economic value, sometimes attempting to demonstrate product benefits in direct comparison to market competitors. Proving that a drug was safe and effective was necessary for regulatory approval but no longer sufficient for marketplace acceptance. In crowded therapeutic markets, being cheaper than competitors, bundling products or otherwise increasing "market value," or demonstrating cost effectiveness, became a necessary precondition for success. Power in the pharmaceutical distribution channel shifted to large purchasing groups that could move volumes of product and effectuate changes in market share. These groups demanded value as a purchasing requirement.

Changes in medical marketing have also served as a background for rapid transformations in pharmaceutical promotion. New informational technologies have produced many new promotional outlets. New audience for pharmaceutical messages have led to the development of a portfolio of information, not only for the traditional dispensers and prescribers, but also for the users and the payers.

There are also new messages used to promote drugs. Driven by vertical integration (such as the merging of drug manufacturers with mail-order pharmacies), new "informational products" are being developed. These promotions combine the traditional descriptions of clinical effects with information about comparative resource effects and "value-added" aspects of the product. These aspects of the "extended product" include patient education programs, formulary management incentives, disease management algorithms, drug utilization review information, provider incentives, and other information-based interventions. New message often seek to persuade purchasers of the product's value through cost-effectiveness or quality-of-life analyses.

The FDA has adapted to these dramatic shifts in pharmaceutical promotion, seeking to apply the regulatory concepts developed during the 1960s and 1970s to modern marketing interventions. Rules prohibiting false or misleading promotion and required disclosure of balancing information remain a solid cornerstone of regulatory philosophy and legal enforcement. However, questions about the application of these principles to certain messages, certain audience, certain channels of communication, and under certain conditions have been raised in legal proceedings, in public forums, and in direct response to the FDA's invitation to make presentations in formal hearings.

The purpose of this chapter is to review some of the current controversies regarding pharmaceutical promotion. We organize this review by focusing on the five structural communication elements: message, channel, audience, source, and effects. For many of the elements we discuss, regulatory philosophy and policy are under review. Therefore, much of this chapter focuses on the controversies and the issues facing the FDA and the pharmaceutical industry.

Before prior to reviewing these issues, we first discuss the basis of the FDA's authority and responsibility as described in portions of the Act and in advertising and labeling regulations.

Regulation of Marketing Practices
The Act specifies that a drug is considered misbranded (a prohibited act) if its labeling or advertising is false or misleading. Labeling is defined as written, printed, or graphic material that accompanies the drug. Advertising is described as being composed of various examples including print advertisements in journals and broadcast through television and radio. As a general principle, labeling and advertising material distributed by drug companies must be consistent with, and not contrary to, the approved product labeling. In addition, there must be adequate risk disclosures to assure that the audience is not mislead and that recipients of the promotional intervention have adequate access to prescribing information. The false or misleading provisions of the Act not only cover what is stated, but failure to reveal material facts in light of what is stated is also considered misbranding a drug.

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