Friday, February 13, 2009

Are FDA Penalties No Longer a "Slap on the Wrist?"

It's Friday and welcome again to the "Bob and John Blog Dialog" -- an ongoing series of informal back and forth jousting between DTC true believer Bob Ehrlich (DTC Prespectives) and me, DTC agnostic John Mack (Pharma Marketing News).

If you are new to this more or less weekly dialog, see here, here, and here.

This week we focus on YAZ, Bayer's contraceptive drug that seems to cure all young womens' monthly problems and acne as well. No, wait, the FDA said that Bayer overstated these benefits of YAZ and must run "corrective ads."

Bob says, "The settlement with the states and FDA should help convince DTC critics that drug companies do not get away with over stating benefits. FDA has been called complicit and lax in allowing drug companies to keep deceptive ads on too long and with no real penalties."

Drug companies do not get away with overstating benefits? Really?!

Seems to me that Bayer did just that in its YAZ commercials.

Bob frequently refers to me as "DTC critic." Who else can he be referring to when he says "FDA has been called complicit..." knowing full well that I said as much in my post entitled "FDA and YAZ: Is FDA Helping Marketers Work Around Regulations?"

But "critic?" Really?

I'm really agnostic when it comes to the benefits of DTC advertising. I can take it or leave it. It's not DTC in and of itself that I am critical of -- it's the often blatant and sometimes accidental disregard of FDA legal guidelines and the industry's own standards that I am critical of.

In the case of YAZ, it took the FDA several months to get a letter out to Bayer about "overstating the benefits" and that was AFTER the FDA saw the storyboards BEFORE the ad was even on the air! That's the complicity part.

Bob says "For drug marketers seeing another DTC drug get slapped with corrective ads, the effect can be chilling."

Chilling? Really?

Why's that? Because Bayer will have to spend $20 million over 6 years making "corrective" ads? Bruce L. Lambert, a professor of pharmacy administration at the University of Illinois at Chicago, referred to the corrective $20 million ad campaign for YAZ as "chump change" and "just the cost of doing business."

I would have to agree. If sales of YAZ in the United States is $616 million or more per year, I would expect Bayer to spend at least $60-$90 million PER YEAR on "non-corrective" DTC advertising. That's about 20 times what it pledged to spend on "corrective advertising." Consider that a 5% levy -- cost of doing business -- on its DTC ad spend.

Bob ends with this: " shows regulation does work. The public and Congress should be somewhat reassured that the state and federal regulatory authorities are monitoring DTC ads. Although we will not avoid additional hearings and regulation on drug marketing, the critics can no longer say penalties are a slap on the wrist."

Regulation works? Really?!

If regulation is like a barn door, it only works when it is closed and PREVENTS the cow (ie, ad) from getting out of the barn (ie, regulatory level playing field). It's not working when you punish the cow by taking away 5% of its food as a punishment for leaving the barn!

And I can still say that FDA penalties are a "slap on the wrist" because -- besides the fact that the penalty is actually small compared to the benefits reaped by running the ads -- corrective ads are RARELY required by the FDA. Now, if they were ALWAYS required, then I would agree with Bob that the penalties are no longer a slap on the wrist.

1 comment:

  1. John,

    No question you're right in this week's debate. $20MM over 6 years is meaningless. $3.33MM a year? $3.33MM to run a commercial that says pretty much anything you want, overstates the brand benefits, and is light on fair balance. I wonder how many other pharma companies would line up to pay $3.33MM to air a commercial that said exactly what they wanted it to say. I suspect it would be a pretty long line.

    My question is really if Bayer gets to spread the $20MM over 6 years. I read the agreement more that they'd have to pre-clear items for 6 years, but that the campaign (i.e., new corrective commercials) would take place immediately. If this is the case, it's a different story.

    However, even if this is the case, let's remember what Bayer has to do. FDA is telling them that they have to do MORE commercials. Isn't this something of a reward? I've seen the corrective commercials and they aren't that bad. In fact, they might paint the brand and company as pretty responsible to the average consumer. They see the ad and think, "Gosh, that's really honest of Bayer. I've never seen another pharma company do that." Meanwhile, the add doesn't mention that this was required. Isn't the bigger penalty a ban from any commercials?


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