Report to Congressional Requesters

United States General Accounting Office

GAO 

October 2002 PRESCRIPTION 

DRUGS 

FDA Oversight of 

Direct-to-Consumer 

Advertising Has 

Limitations 

GAO-03-177 
Page i GAO-03-177 Presciption Drug Advertising 

Letter 1

Results in Brief 3

Background 5

Pharmaceutical Companies Spend More on Research and 

Development than on DTC Advertising 9

DTC Advertising Appears to Increase Prescription Drug Spending 

and Utilization 11

FDA’s Oversight of DTC Advertising Has Limitations 17

Conclusions 24

Recommendation for Executive Action 24

Agency Comments and Our Evaluation 24

Appendix I Scope and Methodology 26 

Appendix II Surveys of Consumers’ Behavior after Seeing or 

Hearing Direct-to-Consumer (DTC) Advertisements 28 

Appendix III Comments from the Department of Health and 

Human Services 31 

Tables 

Table 1: Selected Requirements for Contents of Print and 

Broadcast Product Claim Advertisements 7

Table 2: DTC Advertising Spending Compared to Spending on Total 

Promotion and Research and Development from 1997 to 

2001 10

Table 3: The 15 Drugs with the Highest DTC Spending, 2000 14

Table 4: DTC Regulatory Letters Sent by FDA in 2001 20

Table 5: Calendar Days between DDMAC’s Draft Regulatory Letter 

Submission to OCC and Issuance Date, since January 31, 

2002 23

Table 6: Duration of DTC Television Advertisements 23

Contents 
Page ii GAO-03-177 Presciption Drug Advertising 

Figures 

Figure 1: Spending on Pharmaceutical Promotional Activities, 2001 11

Figure 2: Percentage of Sales for Chronic and Acute Conditions 

Treated by the 50 Drugs with the Highest Spending on 

DTC Advertising, 2000 13

Abbreviations 

CDER Center for Drug Evaluation and Research 

DDMAC Division of Drug Marketing, Advertising, and 

 Communications 

DTC direct-to-consumer 

FDA Food and Drug Administration 

FFDCA Federal Food, Drug and Cosmetic Act 

HHS Department of Health and Human Services 

NIHCM National Institute for Health Care Management Foundation 

OCC Office of the Chief Counsel 

PhRMA Pharmaceutical Research and Manufacturers of America 
Page 1 GAO-03-177 Presciption Drug Advertising 

October 28, 2002 

The Honorable Susan Collins 

The Honorable Barbara Mikulski 

The Honorable James Jeffords 

United States Senate 

The Honorable Nick Rahall 

The Honorable Joseph M. Hoeffel 

House of Representatives 

Prescription drug spending increased at an annual rate of about 18 percent 

from 1997 through 2001 and is the fastest growing component of health 

care spending in the United States. Among the many reasons cited for this 

increase are growth in the number of patients diagnosed with conditions 

that can be treated with pharmaceuticals and the development of 

innovative drugs for some conditions.1

 Spending on direct-to-consumer 

(DTC) advertising of prescription drugs has tripled in recent years. 

Pharmaceutical companies promote their products directly to consumers 

through advertisements in magazines, newspapers, and consumer 

brochures; on the Internet; and on radio and television. They also promote 

their products to physicians by sending sales representatives to their 

offices, providing free samples for distribution to patients, and advertising 

in professional journals. 

The potential consequences of print and broadcast DTC advertising have 

prompted much debate. Supporters of DTC advertising maintain that it 

educates consumers about medical conditions and care options and that 

the increased use of prescription drugs that DTC advertising encourages 

has improved the public’s health. Critics of DTC advertising contend that it 

is sometimes misleading, leads consumers to seek prescription drugs 

when other treatments may be more appropriate, and causes some 

patients to ask their physician to prescribe new drugs that are more 

expensive but may not be more effective than older drugs. Critics also 

argue that pharmaceutical companies spend too much money on drug 

promotion rather than on research and development initiatives. 

 1

Robert W. Dubois, Anita J. Chawla, Cheryl A. Neslusan, Mark W. Smith, and Sally Wade, 

“Explaining Drug Spending Trends: Does Perception Match Reality?” Health Affairs, vol. 19 

(2000), 231-39. 

United States General Accounting Office

Washington, DC 20548 
Page 2 GAO-03-177 Presciption Drug Advertising 

The Food and Drug Administration (FDA) regulates the promotion of 

prescription drugs, including the content of DTC advertisements, under 

the authority of the Federal Food, Drug and Cosmetic Act (FFDCA).2

 The 

act sets general standards for FDA’s regulation of prescription drug 

advertising directed to consumers and physicians. Regulations 

implementing the act require that advertisements present accurate 

information and fairly represent both the benefits and the risks of the 

advertised drug.3

 The Division of Drug Marketing, Advertising, and 

Communications (DDMAC) within FDA’s Center for Drug Evaluation and 

Research (CDER) is responsible for implementing the regulations 

governing DTC advertising. Under the regulations, pharmaceutical 

companies are required to submit all drug advertisements to FDA when 

they are first disseminated to the public (that is, broadcast, published, or 

otherwise distributed).4

 In 1997, FDA issued draft guidance to clarify and 

offer options on how these regulations applied to advertisements 

broadcast directly to consumers on radio and television.5

 Since that time, 

the number of broadcast advertisements for prescription drugs has 

increased greatly. At the same time, the number of regulatory letters sent 

by FDA to pharmaceutical companies requesting that the companies 

remove misleading advertisements from circulation has decreased, leading 

some observers to question FDA’s ability to enforce its regulations. Others 

argue that this decrease has occurred because pharmaceutical companies 

are doing a better job of meeting FDA’s requirements. 

In light of these developments, you asked us to (1) compare spending by 

pharmaceutical companies on DTC advertising with spending on all 

promotional activities and on research and development, (2) evaluate the 

effect of DTC advertising on prescription drug spending and utilization, 

and (3) evaluate the extent and effectiveness of FDA’s oversight of DTC 

advertising since FDA issued its 1997 draft guidance for broadcast 

advertisements. 

To assess the trends in spending on DTC advertising, overall promotion, 

and research and development, we reviewed recent reports from the 

pharmaceutical industry and other organizations. To analyze the effect of 

 2

21 U.S.C. § 502(n). 

3

21 C.F.R. § 202.1(e). 

4

21 C.F.R. § 314.81(b)(3)(i). 

5

The guidance was finalized in 1999. 
Page 3 GAO-03-177 Presciption Drug Advertising 

DTC advertising on drug spending and utilization, we reviewed studies on 

pharmaceutical sales, examined surveys of consumer responses to DTC 

advertising, and reviewed studies on the impact of DTC advertising.6

 To 

evaluate the extent and effectiveness of FDA’s oversight of DTC 

advertising, we reviewed federal regulations, and regulatory letters, and 

interviewed officials from several offices within FDA, including DDMAC. 

We also interviewed pharmaceutical industry representatives and other 

key stakeholders, including public interest groups and representatives of 

the advertising industry. We conducted our work from February 2002 

through September 2002 in accordance with generally accepted 

government auditing standards. See appendix I for a detailed discussion of 

our scope and methodology. 

Pharmaceutical companies spend more on research and development 

initiatives than on all drug promotional activities, including DTC 

advertising. According to industry estimates, pharmaceutical companies 

spent $30.3 billion on research and development and $19.1 billion on all 

promotional activities, which includes $2.7 billion on DTC advertising, in 

2001. Pharmaceutical companies have increased spending on DTC 

advertising more rapidly than they have increased spending on research 

and development. Between 1997 and 2001, DTC advertising spending 

increased 145 percent, while research and development spending 

increased 59 percent. Promotion to physicians accounted for more than 80 

percent of all promotional spending by pharmaceutical companies in 2001. 

Total promotional spending was equivalent to 12 percent of drug sales in 

the United States in 2001. 

DTC advertising appears to increase prescription drug spending and 

utilization. Drugs that are promoted directly to consumers often are 

among the best-selling drugs, and sales for DTC-advertised drugs have 

increased faster than sales for drugs that are not heavily advertised to 

consumers. Most of the spending increase for heavily advertised drugs is 

the result of increased utilization, not price increases. For example, 

between 1999 and 2000, the number of prescriptions dispensed for the 

most heavily advertised drugs rose 25 percent, but increased only 4 

percent for drugs that were not heavily advertised. Over the same period, 

 6

In this report, we use three terms to describe the magnitude of prescription drug use. 

“Utilization” refers to the number of prescriptions dispensed. “Spending” and “sales” refer 

to the amount of money spent for prescription drugs and are a function of both utilization 

and price. 

Results in Brief 
Page 4 GAO-03-177 Presciption Drug Advertising 

prices rose 6 percent for the most heavily advertised drugs and 9 percent 

for the others. The concentration of DTC spending on a small number of 

drugs for chronic diseases that are likely to have high sales anyway and 

the simultaneous promotion of these drugs to physicians may contribute 

to increased utilization and thereby increase sales of DTC-advertised 

drugs. The recent research literature shows that DTC advertising may 

cause increases in drug utilization and sales in some cases. In addition, 

consumer surveys have consistently found that about 5 percent of 

consumers (or, by our estimate, about 8.5 million consumers annually) 

have both requested and received from their physician a prescription for a 

particular drug in response to seeing a DTC advertisement. 

While generally effective at halting the dissemination of advertisements it 

reviews and identifies as misleading, FDA’s oversight of DTC advertising 

has limitations. DDMAC focuses on advertisements that will be widely 

circulated or that are the most likely to impart misleading impressions of a 

drug to consumers. For example, DDMAC reviews all broadcast DTC 

advertisements because of the large number of people who will see them. 

FDA issues regulatory letters for a small percentage of the advertisements 

it reviews. From August 1997 through August 2002, FDA issued 88 

regulatory letters for violative DTC advertisements. FDA officials told us 

that pharmaceutical companies that have received regulatory letters have 

invariably ceased dissemination of the misleading advertisement. 

However, FDA’s oversight has not prevented some pharmaceutical 

companies from repeatedly disseminating new misleading advertisements 

for the same drug, and some pharmaceutical companies have failed to 

submit in a timely manner all newly disseminated advertisements to FDA 

for review. Furthermore, FDA’s oversight has been adversely affected by a 

January 2002 change in its procedures for reviewing draft regulatory 

letters that was directed by the Department of Health and Human Services 

(HHS). This change has significantly increased the time between DDMAC’s 

identification of a misleading advertisement and FDA’s request to remove 

it from dissemination, with the result that some regulatory letters may not 

be issued until after the advertising campaign has run its course. 

In light of the delay caused by the change in policy for review of draft DTC 

regulatory letters, we are recommending that HHS expedite the review of 

these letters to ensure that misleading DTC advertisements are withdrawn 

as soon as possible once identified. In its comments on a draft of this 

report, HHS explained that the purpose of the change in procedure was to 

ensure that the letters are based on a solid legal foundation and promote 

voluntary compliance. HHS agreed that it is important to issue DTC 
Page 5 GAO-03-177 Presciption Drug Advertising 

regulatory letters quickly and said that it intends to reduce the number of 

days that the letters are under review. 

Prescription drug spending and utilization have increased rapidly in recent 

years. Part of the increase is due to growth in the number of patients 

diagnosed with conditions that can be treated with pharmaceuticals and 

the development of innovative drugs for some conditions. The promotion 

of prescription drugs is regulated by FDA. FDA’s regulations and 

subsequently issued guidance contain specific requirements and 

explanations regarding the content of advertisements that promote 

prescription drugs. When requirements are not met, FDA may issue a 

regulatory letter requesting that the advertisement be withdrawn or 

revised. 

Prescription drug spending has risen steadily over the past decade. 

Spending on prescription drugs now represents 10 percent of health care 

expenditures in the United States, and adults aged 65 and older spend 

nearly 3 percent of their total household expenditures on medications.7

Increases in overall drug spending are the result of three types of changes 

in drug prices and drug use: increases in utilization, that is, the number of 

prescriptions dispensed; price increases; and a shift from older drugs to 

new, more expensive drugs (newly marketed drugs are generally more 

expensive than older drugs in the same class). The National Institute for 

Health Care Management Foundation (NIHCM) reported that overall 

spending on prescription drugs in the United States increased 17.1 percent 

from 2000 to 2001: an increase in the number of prescriptions accounted 

for a 6.7 percent increase, price increases for a 6.3 percent increase, and 

shifts to higher-cost drugs for a 4.1 percent increase.8

Prescription drug utilization in the United States has shown a steady 

increase over the past decade. The number of prescriptions dispensed in 

retail pharmacies has grown at an average annual rate of 6 percent since 

 7

David H. Kreling, David A. Mott, Joseph B. Wiederholt, Janet Lundy, and Larry Levitt, 

Prescription Drug Trends: A Chartbook Update, pub. no. 3112 (Washington, D.C.: The 

Henry J. Kaiser Family Foundation, 2001). 

8

NIHCM Foundation, Prescription Drug Expenditures in 2001: Another Year of 

Escalating Costs (Washington, D.C.: NIHCM Foundation, 2002). 

Background 

Reasons for Increased 

Prescription Drug 

Spending and Utilization 
Page 6 GAO-03-177 Presciption Drug Advertising 

1992, reaching nearly 3 billion in 2000.9 Among the factors besides DTC 

advertising and promotion to physicians that may contribute to this 

increased utilization are an aging population that is more dependent on 

multiple medications for treatment; new medications for conditions that 

had less effective previous treatments, such as high cholesterol; and 

increased insurance coverage for medications. In addition, the number of 

patients diagnosed with chronic conditions for which pharmaceutical 

treatments are available has increased dramatically. For example, the 

number of people with arthritis, one of the most frequent causes of 

disability in the United States, increased from an estimated 38 million in 

1990 to 43 million in 1997.10 Furthermore, for some conditions, such as 

high cholesterol, increased drug utilization has resulted from biomedical 

research that has led to a broadening of the guidelines for treatment with 

drugs.11

Countries that do not allow DTC advertising and have publicly funded 

health systems have also experienced increased drug utilization, and 

therefore increased spending, because of these same factors. According to 

a drug marketing research firm, retail pharmacy sales from April 2001 

through April 2002 rose 16 percent in the United States, 16 percent in 

Canada, 10 percent in Germany, and 12 percent in the United Kingdom.12

FDA regulations describe several types of prescription drug 

advertisements, including DTC advertisements, and the extent to which 

they are subject to regulation. One type, product claim advertisements, 

usually mentions a drug’s name and the condition it is intended to treat 

and describes the risks and benefits associated with taking the medication. 

 9

Kreling, Mott, Wiederholt, Lundy, and Levitt, Prescription Drug Trends: A Chartbook 

Update, 8. 

10Centers for Disease Control and Prevention, “Prevalence of Arthritis—United States, 

1997,” MMWR, vol. 50 (2001), 334-6. 

11National Institutes of Health, Third Report of the National Cholesterol Education 

Program (NCEP) Expert Panel on Detection, Evaluation, and Treatment of High Blood 

Cholesterol in Adults (Adult Treatment Panel III), Executive Summary, NIH pub. no. 01-

3670 (Rockville, Md.: NIH, May 2001.) 

12IMS Health, Inc.,”IMS Health Reports 11% Growth in Retail Pharmacy Drug Sales for the 

12 Months to April 2002” (Fairfield, Ct.: IMS Health, 2002), 

http://www.imshealth.com/public/structu (downloaded September 26, 2002). Based on 

sales from wholesalers to retail pharmacies, with sales measured in U.S. dollars at a 

constant exchange rate. 

FDA’s Requirements for 

the Content of DTC 

Advertisements 
Page 7 GAO-03-177 Presciption Drug Advertising 

The regulations specify, among other things, that product claim 

advertisements (1) cannot be false or misleading; (2) must present a fair 

balance between the risks and the benefits of a drug product; (3) must 

reveal facts that are material to the representations made in the 

advertisement or the consequences of using the product as advertised; and 

(4) must, depending on the medium, either disclose all the risks listed in 

the product’s labeling or make “adequate provision” to disseminate the 

approved product labeling through other means to the advertisement’s 

audience. Table 1 shows some of the requirements for print and broadcast 

product claim advertisements. 

Table 1: Selected Requirements for Contents of Print and Broadcast Product Claim 

Advertisements 

Advertising 

medium Regulatory requirements Explanation 

Cannot be false or 

misleading 

Must present information that is not 

inconsistent with product label 

Must present fair balance Must include risks and benefits of a 

drug product 

Print and 

broadcast 

Must present “facts material” Must present information relevant to 

representations made, and describe 

consequences that may result from 

recommended use 

Print only Must describe risks Must disclose all risks in a product’s 

labeling 

Must describe risks Must present major side effects and 

contraindicationsa

 in audio or audio 

and visual form 

Broadcast only 

Must make “adequate 

provision” for directing 

consumers to labeling 

information, or provide a brief 

summary of all necessary 

information related to risks 

Must provide additional sources 

where consumers can find complete 

information, such as a toll-free 

telephone number, a Web site, and 

a print advertisement in a 

magazine, and by contacting their 

physicians; otherwise must 

summarize risks 

a

Contraindications are symptoms or conditions that make a drug treatment inadvisable. 

Sources: 21 C.F.R. § 202; FDA, Guidance for Industry: Consumer-directed Broadcast Advertisements

(Washington, D.C.: FDA, Aug. 1997). 

In 1997, FDA issued draft guidance on how broadcast product claim DTC 

advertisements could communicate information about the risks of using a 

drug by finding mechanisms by which to get the product labeling 
Page 8 GAO-03-177 Presciption Drug Advertising 

information to consumers, and thereby meet the adequate provision 

portion of its regulations.13 Before this provision of the regulation was 

clarified in 1997, pharmaceutical companies generally had to provide all of 

the risk information associated with the medication during the broadcast 

advertisement. Including all of this risk information in a broadcast DTC 

advertisement increased the length of the advertisement to the point that 

such advertising was largely impractical. After the guidance was issued, 

pharmaceutical companies had an alternative to the requirement that all 

risks in broadcast advertisements be disclosed. Pharmaceutical companies 

could meet the regulatory requirements by presenting the major side 

effects, either in audio or in audio and visual form, and by telling 

consumers where to find additional information, including how or where 

to obtain the approved product labeling. 

A second type of advertisement is reminder advertisements. These may 

disclose the name of the product and dosage form (e.g., tablet, syrup) or 

cost information, but they are not permitted to present its intended use or 

to make any claims or representations about the product. Under FDA 

regulations, reminder advertisements are exempt from the risk disclosure 

requirements. 

A third type of advertisement is help-seeking advertisements, which are 

not regulated by FDA. They do not identify drugs by name and generally 

discuss a disease or condition and advise the print or broadcast audience 

to “see your doctor” for possible treatments. 

In an effort to stop dissemination of misleading DTC advertisements, FDA 

sends regulatory letters to companies that are in violation of its 

regulations. These letters are of two types—untitled letters and warning 

letters. Untitled letters address violations such as overstating the 

effectiveness of the drug, suggesting a broader range of indicated uses 

than the drug has been approved for, and making misleading claims 

because of inadequate context or lack of balanced risk information. 

Warning letters address more serious violations, including safety or health 

risks, or continued violations of the act. Warning letters advise a 

pharmaceutical firm that FDA may take further enforcement actions, such 

as seeking judicial remediation, without notifying the company, and 

 13FDA, Guidance for Industry: Consumer-directed Broadcast Advertisements 

(Washington, D.C.: FDA, Aug. 1997). 

FDA Regulatory Letters 
Page 9 GAO-03-177 Presciption Drug Advertising 

generally ask the firm to conduct a new advertising campaign to correct 

inaccurate impressions left by the advertisement. A company that receives 

either type of letter from FDA is asked to submit a written response to the 

agency within 14 days describing the remedial actions it has taken. 

Pharmaceutical companies spend more on research and development than 

on DTC advertising or on all promotional activities combined, according to 

industry sources. Nonetheless, spending for DTC advertising has increased 

much faster than spending for all promotional activities or for research 

and development. More than 80 percent of all promotional spending is 

directed toward physicians rather than consumers. 

According to industry analyses, spending on research and development 

was more than 10 times higher than spending on DTC advertising in 2001.14

Pharmaceutical companies spent an estimated $30.3 billion on research 

and development and $19.1 billion on all promotional activities, including 

$2.7 billion on DTC advertising in 2001. However, the growth rate of 

spending on DTC advertising is higher than the rate of increase for 

spending on total promotion or spending on research and development. As 

table 2 shows, from 1997 through 2001, spending on DTC advertising 

increased from $1.1 billion to an estimated $2.7 billion, spending on total 

promotion increased from $11.0 billion to an estimated $19.1 billion, and 

research and development spending increased from $19.0 billion to an 

estimated $30.3 billion. 

 14Pharmaceutical Research and Manufacturers of America, Pharmaceutical Industry 

Profile 2002 (Washington, D.C.: Pharmaceutical Research and Manufacturers of America, 

2002); IMS Health Integrated Promotional Services, “Total U.S. Promotional Spending by 

Type, 2001” (Fairfield, Ct.: IMS Health, 2002), http://www.imshealth.com/public/structu 

(downloaded July 17, 2002). We did not independently verify the amounts reported by the 

Pharmaceutical Research and Manufacturers of America and IMS Health. However, many 

researchers have consistently cited these data sources, and they represent the best 

available information. 

Pharmaceutical 

Companies Spend 

More on Research and 

Development than on 

DTC Advertising 

Despite Rapid Growth in 

Spending on DTC 

Advertising, 

Pharmaceutical 

Companies Spend More on 

Research and 

Development 
Page 10 GAO-03-177 Presciption Drug Advertising 

Table 2: DTC Advertising Spending Compared to Spending on Total Promotion and 

Research and Development from 1997 to 2001 

Dollars in billions 

 1997 1998 1999 2000 2001 

Percentage 

spending 

increase, 

1997-2001 

DTC $1.1 $1.3 $1.8 $2.5 $2.7 145 

Total promotiona 11.0 12.5 13.9 15.7 19.1 74 

Research and 

development 19.0 21.1 22.7 26.0 30.3b

 59 

a

Total promotion includes DTC advertising. 

b

Estimated spending on research and development. 

Sources: For 1997 to 2000 data, Pharmaceutical Research and Manufacturers of America, 

Pharmaceutical Industry Profile 2002, 18, 75; for 2001 promotional spending estimates, IMS Health, 

“Total U.S. Promotional Spending by Type, 2001.” 

In recent years there has been a shift of DTC advertising from print media 

to television broadcasts.15 The percentage of DTC spending devoted to 

print advertisements declined from 74 percent in 1997 to 35 percent in 

2001. Conversely, spending on television advertising increased from 25 

percent of all DTC spending in 1997 to 64 percent in 2001. Prescription 

drug promotion on television escalated from 25 percent to 53 percent of 

the total spending on DTC advertising from 1997 to 1998. 

Most promotional spending is targeted to physicians. In each year from 

1997 to 2001, providing samples to office-based and hospital-based 

physicians and sending sales representatives to meet with physicians 

(practices known as sampling and detailing, respectively) accounted for 

more than 80 percent of expenditures on promotional activities.16 (See fig. 

1.) The ratio of total promotional spending to drug sales remained fairly 

 15Television broadcasts constitute the majority of nonprint DTC advertising spending. 

16Kreling, Mott, Wiederholt, Lundy, and Levitt, Prescription Drug Trends: A Chartbook 

Update; IMS Health Integrated Promotional Services, “Total U.S. Promotional Spending by 

Type, 2001.” These figures do not include educational meetings arranged by pharmaceutical 

companies for physicians, which are not generally considered to be promotional activities. 

Pharmaceutical companies spent about $1.9 billion on educational meetings in 2000. (See 

NIHCM Foundation, Prescription Drugs and Mass Media Advertising, 2000 (Washington, 

D.C.: NIHCM Foundation, 2001)). 

Most Promotional 

Spending Is Directed to 

Physicians 
Page 11 GAO-03-177 Presciption Drug Advertising 

constant from 1997 to 2001. In 2001, promotional spending was equivalent 

to 12 percent of drug sales in the United States. 

Figure 1: Spending on Pharmaceutical Promotional Activities, 2001 

a

The practice of providing samples during sales visits to office-based physicians. 

b

Sales activity of pharmaceutical sales representatives directed to office-based and hospital-based 

physicians. 

Source: IMS Health, “Total U.S. Promotional Spending by Type, 2001.” 

Drugs that are promoted directly to consumers often are among the bestselling drugs, and sales for DTC-advertised drugs have increased faster 

than sales for drugs that are not heavily advertised to consumers. Most of 

the spending increase for heavily advertised drugs is the result of 

increased utilization, not price increases. DTC advertising is concentrated 

among a small number of drugs for chronic conditions and many of these 

same drugs are also promoted to physicians, both factors that may lead to 

increased sales. To date, the few studies that have examined the effects of 

DTC spending on prescription drug spending and utilization have found 

that DTC advertising increases both. In addition, there is clear evidence 

from consumer surveys that DTC advertising encourages consumers to 

request prescriptions for specific brand-name drugs from their physicians 

and that some physicians provide the requested prescription. 

DTC Advertising 

Appears to Increase 

Prescription Drug 

Spending and 

Utilization 
Page 12 GAO-03-177 Presciption Drug Advertising 

Drugs with high DTC spending are among the best-selling drugs. For 

example, in 2000, 22 of the 50 drugs with the highest DTC spending were 

among the top 50 in sales.17 Furthermore, sales of drugs with the highest 

DTC spending have risen more quickly than sales of other drugs. For 

example, NIHCM reported that expenditures for the 50 most heavily 

advertised drugs increased 32 percent between 1999 and 2000, while 

expenditures for all other drugs increased 14 percent. Most of this 

expenditure increase results from increased utilization (that is, an increase 

in prescriptions filled), not from price increases. Among the 50 most 

heavily advertised drugs, the number of prescriptions dispensed rose 25 

percent between 1999 and 2000, compared to a 4 percent increase for 

other drugs. During the same period, prices increased 6 percent for the 

heavily advertised drugs, and 9 percent for other drugs. 

Concentration of DTC spending on a small number of drugs for chronic 

conditions that are likely to have high sales and the promotion of these 

same drugs to physicians may also contribute to increased utilization. 

Almost all spending on DTC advertising is concentrated among a small 

number of drugs that treat chronic conditions and therefore must be taken 

repeatedly. (See fig. 2.) These drugs are relatively new and are still under 

patent protection. According to NIHCM, the 50 drugs with the highest DTC 

advertising spending in 2000 accounted for 95 percent of all DTC 

advertising spending that year, and the top 15 DTC-advertised drugs 

accounted for 54 percent of all DTC advertising spending. All of the top 15 

DTC-advertised drugs were for chronic conditions: 6 for allergy or asthma, 

3 for high cholesterol, 2 for arthritis, and 1 each for acid reflux, 

depression, obesity, and impotence. (See table 3.) Only one of the 50 most 

heavily advertised drugs was an antibiotic, a drug class that is used 

episodically. In some drug categories, a small number of pharmaceuticals 

that are heavily advertised account for the vast majority of sales. For 

example, in 2000 three oral antihistamines, Claritin, Allegra, and Zyrtec, 

accounted for 86 percent of all oral antihistamine sales, and all three of 

them were among the 15 most heavily advertised drugs. 

 17NIHCM Foundation, Prescription Drugs and Mass Media Advertising, 2000. 

Many DTC-Advertised 

Drugs Are Best Sellers 

DTC-Advertised Drugs Are 

for Chronic Conditions and 

Are Often Promoted to 

Physicians 
Page 13 GAO-03-177 Presciption Drug Advertising 

Figure 2: Percentage of Sales for Chronic and Acute Conditions Treated by the 50 

Drugs with the Highest Spending on DTC Advertising, 2000 

Source: GAO analysis of data from NIHCM Foundation, Prescription Drugs and Mass Media 

Advertising, 2000. 
Page 14 GAO-03-177 Presciption Drug Advertising 

Table 3: The 15 Drugs with the Highest DTC Spending, 2000 

Drug Condition 

Percentage of DTC 

spending for all 

drugsa

Percentage of 

sales for all drugsb

Vioxx Arthritis 7.1 1.2

Prilosec Acid reflux 4.8 3.1

Claritin Allergy 4.4 1.5

Paxil Depression 4.1 1.4

Zocor High cholesterol 4.0 1.7

Viagra Impotence 4.0 0.6

Celebrex Arthritis 3.5 1.5

Flonase Allergy 3.3 0.5

Allegra Allergy 3.0 0.8

Meridia Obesity 2.9 0.1

Flovent Asthma 2.8 0.5

Pravachol High cholesterol 2.7 0.9

Zyrtec Allergy 2.7 0.6

Singulair Asthma 2.6 0.5

Lipitor High cholesterol 2.6 2.8

Total 54.5 17.7

a

Total DTC spending for all drugs was $2.5 billion. 

b

Sales for all drugs totaled $132 billion. 

Source: Kreling, Mott, Wiederholt, Lundy, and Levitt, Prescription Drug Trends: A Chartbook Update, 

32; NIHCM Foundation, Prescription Drugs and Mass Media Advertising, 2000, 9. 

Many of the same drugs that are promoted through DTC advertising are 

also promoted to physicians, meaning that any sales increases may be due 

in part to that promotion. For example, according to industry analysts, half 

of the 10 drugs with the highest DTC spending were also among the 10 

drugs with the greatest volume of samples distributed to physicians in 

2000.18 Over 70 percent of physicians surveyed in one study said that they 

are more likely to prescribe the brand-name medication requested by the 

patient if they have a free sample available.19 In addition, there is a growing 

trend to announce through DTC venues such as television, newspaper 

 18IMS Health Inc., “Product Sampling Continues to Spike in US” (Fairfield, Ct.: IMS Health, 

2002), http://www.imshealth.com/public/structure/dispcontent (downloaded May 16, 2002). 

19Barbara Henderson, “IMS Study: U.S. Physicians Responsive to Patient Requests for 

Brand Name Drugs” (Fairfield, Ct.: IMS Health, 2002), 

http://www.imshealth.com/public/structure/dispcontent (downloaded May 16, 2002). 
Page 15 GAO-03-177 Presciption Drug Advertising 

advertisements, and the Internet that free samples are available from 

physicians. Thus pharmaceutical companies are making consumers aware 

of these products and providing samples to physicians so that samples are 

available when consumers request them. 

Researchers have only recently begun to examine the effects of DTC 

advertising on drug utilization and sales. The few studies we identified 

have conflicting findings but, on the whole, suggest that DTC advertising 

may increase drug utilization and sales. One study looked at the utilization 

of an injectable migraine headache treatment in cities in which a DTC 

advertising campaign was conducted and cities with no advertising. 

During the first year the drug was marketed, February 1993 to February 

1994, the drug was dispensed nearly 10 percent more in cities in which 

DTC advertisements were disseminated.20 Additionally, three recent 

studies that examined the joint effects of DTC advertising and promotion 

to physicians all found that DTC advertising significantly increased drug 

sales.21 Each of the studies found that DTC advertising increased sales 

within the advertised drug’s class (implying, for example, that advertising 

for one antihistamine increased sales for other antihistamines as well).22

Two of the studies estimated that each 10 percent increase in DTC 

spending within a drug class increased sales in that class by 1 percent.23

 20Lisa R. Basara, “The Impact of a Direct-to-Consumer Prescription Medication Advertising 

Campaign on New Prescription Volume,” Drug Information Journal, vol. 30 (1996), 715-29. 

21Meredith B. Rosenthal, Julie M. Donohue, Arnold M. Epstein, and Richard G. Frank, 

Demand Effects of Recent Changes in Prescription Drug Promotion, June 22, 2002 

(forthcoming, available on the Web as of Oct. 21, 2002, at 

http://www.nber.org/books/garber6/index.html); Scott Neslin, “ROI Analysis of 

Pharmaceutical Promotion (RAPP): An Independent Study” (unpublished presentation, 

Hanover, N.H.: Dartmouth College, Amos Tuck School of Business, May 2001); Marta E. 

Wosinska, “The Economics of Prescription Drug Advertising” (Ph.D. diss., University of 

California, Berkeley, 2002). 

22Each of the studies also found that promotion to physicians was more cost effective than 

DTC advertising. 

23This estimate implies that DTC advertising can substantially boost sales for high-volume 

drugs because sales figures are often much larger than advertising expenditures. For 

example, in 2000 the top-selling drug, Prilosec, had sales of $4.1 billion and DTC advertising 

expenditures of $108 million. If this estimate applied to individual prescription drugs, each 

increase in DTC spending of $1 million would have increased sales of Prilosec by $4 

million. 

Research Studies Suggest 

That DTC Advertising Has 

Increased Utilization and 

Sales of Advertised Drugs 
Page 16 GAO-03-177 Presciption Drug Advertising 

An exception to this pattern of findings is a study on the effects of 

fluctuations in the intensity of DTC advertising on sales of cholesterollowering drugs from 1995 to 2000. While sales of cholesterol-lowering 

drugs increased substantially over that period, this study found that 

variations in the amount of DTC advertising were not statistically related 

to either sales of particular brand-name drugs or sales of cholesterollowering drugs as a class.24 Unlike the studies described above, this 

research did not consider the effects of promotion to physicians. 

Surveys conducted by FDA and private organizations consistently show 

that DTC advertisements have an impact on whether consumers request 

and receive a specific brand-name prescription from their physician. (See 

app. II for a list of consumer surveys.) In several of these surveys, 

consumers were asked whether they had seen an advertisement for a 

prescription drug and whether seeing the advertisement resulted in 

discussing the medication with their doctor and receiving the prescription. 

Most consumers (65 to 85 percent) remembered seeing a DTC 

advertisement. A subset of consumers who saw an advertisement 

discussed the medication with their doctor. The percentage of patients 

asking their physicians about a prescription for a specific drug was 

consistent across studies, about 30 to 35 percent of those who 

remembered seeing a DTC advertisement. One study estimated that the 32 

percent of consumers in a 2001 survey who had discussed a DTC 

advertisement with their doctor translated into approximately 61.1 million 

consumers asking about specific medications. In the consumer surveys we 

examined, the percentage of consumers who, in response to a DTC 

advertisement, requested and received a prescription from their physician 

for a drug they were not currently taking was generally about 5 percent 

(ranging from 2 percent to 10 percent). By our estimate, this means that 

about 8.5 million consumers received a prescription after viewing a DTC 

advertisement and asking their physician for the drug in 2000.25

 24John E. Calfee, Clifford Winston, and Randolph Stempski, Direct-to-Consumer 

Advertising and the Demand for Cholesterol-reducing Drugs (Washington, D.C.: American 

Enterprise Institute, 2001). 

25Based on figures in the 2001 Statistical Abstract of the United States, we estimate that 

about 170 million adults visited a physician in 2000; 8.5 million is 5 percent of 170 million. 

Consumer Surveys Have 

Found That DTC 

Advertisements Influence 

Consumers to Ask 

Physicians for Brand-name 

Drugs 
Page 17 GAO-03-177 Presciption Drug Advertising 

FDA’s oversight of DTC advertising is focused on advertisements that have 

the greatest exposure or the greatest potential to be misleading. 

Pharmaceutical companies comply with FDA’s requests to cease 

dissemination of misleading DTC advertisements. However, some 

pharmaceutical companies have repeatedly disseminated misleading 

advertisements for the same drug, and pharmaceutical companies have 

failed to submit, or to submit in a timely manner, all newly disseminated 

advertisements to FDA for review. A recent change in the procedures for 

reviewing draft regulatory letters has adversely affected FDA’s ability to 

issue regulatory letters in a timely manner. 

As of June 2002, five DDMAC staff were dedicated to reviewing DTC 

advertisements, and two DTC review slots were vacant.26 DDMAC’s 

reviewers focus on advertisements that will receive the greatest exposure 

or have the most potential to impart misleading impressions of a drug to 

consumers. These include broadcast advertisements, print advertisements 

appearing in high-circulation periodicals, initial advertising campaigns for 

newly marketed drugs, and new advertisements from pharmaceutical 

companies that have previously been cited for disseminating misleading 

advertisements. DDMAC officials told us that 248 broadcast 

advertisements and an unknown number of DTC print advertisements 

were submitted to it at the time of their dissemination in 2001. DDMAC 

staff reviewed all the broadcast advertisements it received in 2001. 

DDMAC does not keep track of the number of print advertisements it 

reviewed.27 DDMAC also received and reviewed 230 complaints about 

allegedly misleading advertisements (for both consumer-directed and 

health professional-directed materials) in 2001, the majority of which were 

submitted by competing pharmaceutical companies. DDMAC investigates 

all tips concerning potentially misleading advertisements. Although FDA 

generally does not have the authority to preapprove advertisements before 

they are disseminated, companies may voluntarily submit their materials 

to FDA for advisory comments before launching an advertisement. 

DDMAC gave advisory comments on 128 broadcast advertisements in 

 26In total, DDMAC had 39 full-time-equivalent positions in fiscal year 2002, most of which 

were dedicated to the oversight of promotional communications directed to physicians. 

27DDMAC tabulates all of the pieces of promotional material submitted to it, but, with the 

exception of broadcast advertisements, it does not categorize the types of submissions it 

receives. DDMAC officials told us that it received approximately 34,000 pieces of 

promotional material, including consumer advertisements and promotions to physicians, in 

2001, but that they do not know how many DTC print advertisements were submitted. 

FDA’s Oversight of 

DTC Advertising Has 

Limitations 

DDMAC Targets Reviews 
Page 18 GAO-03-177 Presciption Drug Advertising 

2001. In addition to monitoring and review activities, DDMAC conducts 

research to better understand consumer and physician behavior related to 

DTC advertising. 

When FDA identifies a violative DTC advertisement, it sends a regulatory 

letter to the company responsible for the advertisement asking that the 

company cease disseminating the advertisement. FDA issues regulatory 

letters for only a small percentage of the advertisements it reviews. For 

example, FDA has issued letters for about 5 percent of the broadcast 

advertisements it reviewed between 1999 and 2001. In total, FDA issued 88 

regulatory letters for DTC advertisements between August 1997 and 

August 2002—44 for broadcast advertisements, 35 for print 

advertisements, and 9 for both broadcast and print advertisements.28

Almost all of the regulatory letters were untitled letters, which are for less 

serious violations of FFDCA; for more serious violations, FDA issued three 

warning letters for broadcast advertisements and one for a print 

advertisement. 

FDA’s warning letters often cite multiple, serious offenses or violations 

that raise public health issues. For example, FDA’s January 21, 1999, 

warning letter to Novartis Pharmaceuticals Corporation about the 

marketing of Lescol, a cholesterol-lowering drug, described four 

violations: (1) Novartis did not submit the broadcast advertisement to FDA 

when it was disseminated, as required by the regulations, resulting in 

“violative messages being disseminated to a far larger consumer audience 

than might have otherwise occurred”; (2) the advertisement falsely stated 

that treatment with Lescol was as effective as treatment with other 

cholesterol-lowering agents named in the advertisement; (3) the 

advertisement falsely stated that treatment with Lescol was less expensive 

than treatment with other named cholesterol-lowering agents; and (4) the 

advertisement minimized the risk of potentially serious side effects, 

including liver function abnormalities and muscle pain or weakness. 

Table 4 lists the 14 DTC regulatory letters issued by FDA in 2001 and 

describes the violations cited in each. One-half of the letters cited 

advertisements that made misleading claims about a drug’s efficacy. For 

 28FDA’s DTC regulatory letters are posted on the Web at http://www.fda.gov/cder/warn/. 

FDA sometimes sends a single letter for violative DTC advertisements that appear in both 

broadcast and print mediums. 

FDA Sends Regulatory 

Letters When It Identifies a 

Violation 
Page 19 GAO-03-177 Presciption Drug Advertising 

example, FDA’s August 2001 letter concerning Luxiq, a cream for the 

treatment of psoriasis and eczema, noted that the advertisement claimed 

“highly effective relief in three out of four patients,” even though the 

clinical trial described on the product labeling found that Luxiq’s success 

at improving various symptoms ranged from 41 percent to 67 percent. The 

Luxiq advertisement also claimed that it reduced symptoms “within days,” 

even though the clinical trial results were for patients who used it for 4 

weeks. Similarly, in November 2001, FDA cited an advertisement for 

Protopic Ointment, a treatment for allergic dermatitis, which included 

models with completely smooth skin. FDA concluded that this implied that 

patients would experience 100 percent improvement of their symptoms 

with the ointment, even though the product labeling noted that only onetenth of the patients taking the drug showed complete improvement. 

Regulatory letters have also cited advertisements for minimizing risk 

information. For example, FDA’s October 2001 letter about an 

advertisement for Differin Gel, an acne medication, claimed that risk 

information was inadequately presented because, “During the audio 

presentation of the major risk information, there are numerous visual 

distractions that interfere with the viewer’s ability to listen to ... the 

information ... [including] numerous scene changes and quick camera 

movements.” Still other advertisements have been cited because FDA 

identified them as being a different type of advertisement than apparently 

intended by the pharmaceutical firm. FDA’s January 2001 letter concerning 

an advertisement for the acid reflux medication Prilosec, for instance, 

noted that the advertisement did not mention the drug by name and did 

not include information about the drug’s approved indication and usage. 

The manufacturer apparently intended it to be a help-seeking 

advertisement that did not require such information. However, FDA found 

that, in essence, the advertisement was a product claim advertisement 

because it discussed acid reflux in conjunction with “the purple pill,” and 

at the time Prilosec was the only purple pill that treated acid reflux. 
Page 20 GAO-03-177 Presciption Drug Advertising 

Table 4: DTC Regulatory Letters Sent by FDA in 2001 

Drug Condition Company Date Type of letter Violation 

Prilosec Acid reflux AstraZeneca 1/3/01 Untitled Provides inadequate information 

on approved product indication 

and use, lacks fair balance 

Protopic Eczema Fujisawa Healthcare 2/16/01 Untitled Fails to provide necessary 

information for making product 

claims 

Xenical Obesity Hoffmann-La Roche 3/30/01 Untitled Provides inadequate information 

on full indication, fails to fulfill 

“adequate provision”a

requirements, lacks fair balance 

Plavix Heart disease Sanofi-Synthelabo 6/8/01 Untitled Minimizes role of physician, fails 

to fulfill “adequate provision” 

requirements 

Avandia Diabetes GlaxoSmithKline 6/28/01 Untitled Minimizes risks 

Ditropan 

XL 

Overactive 

bladder 

Alza 7/12/01 Untitled Overstates efficacy, minimizes 

risks, fails to convey indications 

Cerezyme Gaucher 

disease 

Genzyme 7/13/01 Untitled Minimizes risks, fails to fulfill 

“adequate provision” 

requirements, fails to disclose 

prescription drug status 

Niaspan High 

cholesterol 

Kos Pharmaceuticals 7/13/01 Warning Fails to present significant risks; 

makes misleading efficacy 

claims; implied use is 

inconsistent with product labeling 

Luxiq Psoriasis and 

eczema 

Connetics 8/13/01 Untitled Overstates efficacy, misleading 

preference, compliance, and 

superiority claims 

Differin Acne Galderma Laboratories 10/1/01 Untitled Provides inadequate risk 

information in relation to 

effectiveness information 

Actonel Osteoporosis Proctor & Gamble 10/9/01 Untitled Minimizes role of health care 

provider, fails to fulfill “adequate 

provision” requirements, provides 

inadequate risk information 

Protopic Eczema Fujisawa Healthcare 11/14/01 Untitled Overstates efficacy, broadens 

approved product indication, 

minimizes risk 

Nolvadex Breast cancer AstraZeneca 12/14/01 Untitled Makes misleading efficacy 

claims, minimizes risks, fails to 

comply with postmarketing 

reporting requirements 

a

Unless broadcast advertisements provide a brief summary of all risks, they must make “adequate 

provision” for the dissemination of the approved product labeling. 

Source: FDA, Center for Drug Evaluation and Research, “Warning Letters and Notice of Violation 

Letters to Pharmaceutical Companies” (Rockville, MD.: U.S. Food and Drug Administration), 

http://www.fda.gov/cder/warn/ (downloaded Sept. 9, 2002). 
Page 21 GAO-03-177 Presciption Drug Advertising 

FDA officials told us that pharmaceutical companies have complied with 

FDA’s requests to cease dissemination of misleading DTC drug 

advertisements in every case to date. For that reason, and because FDA 

does not want to remove a beneficial drug from the market, FDA has yet to 

employ any of the harsher remedies available to it. FDA, through the 

Department of Justice, can initiate court action to seize drugs for which 

advertisements are false or misleading. FDA may also ask a court to stop 

the advertisement and request the company to run a corrective campaign. 

FFDCA provides for criminal penalties for violative prescription drug 

advertising. 

FDA’s regulatory letters do not completely deter pharmaceutical 

companies from making misleading claims in subsequent advertisements. 

Since 1997, FDA has issued repeated regulatory letters to several 

pharmaceutical companies, including 14 to GlaxoSmithKline, 6 to Schering 

Corporation, and 5 to Merck & Co. 29 Some companies have received 

multiple regulatory letters over time for new advertisements promoting 

the same drug. For example, FDA issued four separate regulatory letters, 

one of which was a warning letter, to stop misleading advertisements for 

the allergy drug Flonase marketed by Glaxo Wellcome in 1999 and 2000. 

The untitled letters were for unsubstantiated efficacy claims and for lack 

of fair balance. The warning letter was for failure to provide any risk 

information on the major side effects and contraindications of the drug, 

failure to make adequate provision for disseminating the product labeling, 

and failure to submit the advertisement to FDA. In the past 4 years, FDA 

has issued four regulatory letters to Pfizer regarding broadcast and print 

advertisements for its cholesterol-lowering drug, Lipitor. Among other 

infractions, FDA noted that the advertisements gave the false impression 

that Lipitor can reduce heart disease and falsely claimed that Lipitor is 

safer than competing products. 

While FDA’s enforcement actions have succeeded in removing from 

dissemination misleading DTC advertisements, the effectiveness of its 

oversight is limited in two respects. First, FDA’s ability to assess the 

compliance of pharmaceutical companies with its DTC advertising 

regulations is compromised because FDA cannot verify that it receives all 

 29Company names listed here are based on the names as of the date of the last regulatory 

letter that they received. 

FDA’s Regulatory Letters 

Are Effective in Halting 

Dissemination of 

Misleading Advertisements 

Some Pharmaceutical 

Companies Have Been 

Cited for Repeatedly 

Disseminating Different 

Misleading Advertisements 

Effectiveness of FDA’s 

Oversight of DTC 

Advertising Is Limited in 

Two Ways 
Page 22 GAO-03-177 Presciption Drug Advertising 

newly disseminated advertisements from pharmaceutical companies. FDA 

has issued six regulatory letters for misleading advertisements since 1997 

that cited pharmaceutical companies for failing to submit their 

advertisements to the agency when they were first disseminated. 

FDA officials told us that the agency contracts with a commercial service 

that monitors television advertising placement to find advertisements that 

pharmaceutical companies have failed to submit to the agency. The 

service monitors six cable television networks and the New York City 

affiliates of the four major networks and PBS.30 This service does not 

identify all advertisements that are broadcast on smaller networks, such as 

some cable television stations, or in some local markets. Indeed, in one 

case a misleading advertisement was broadcast in 2 calendar years in 

Puerto Rico before FDA became aware of it. 

Second, a recent change in the Department of Health and Human Services 

policy for reviewing regulatory letters has sharply reduced FDA’s 

effectiveness in issuing untitled and warning letters in a timely manner. 

The ability to issue regulatory letters quickly after an advertising violation 

is identified is a key component of FDA’s oversight of DTC advertising. 

Any inaccurate impressions of a drug that are caused by a misleading 

advertisement are minimized if the advertisement is quickly removed from 

dissemination. Prior to the policy change, FDA officials told us that 

regulatory letters were issued directly by DDMAC within several days of 

its receipt of an advertisement that it identified as misleading. On 

November 29, 2001, HHS instructed FDA that no untitled or warning 

letters could be issued until FDA’s Office of the Chief Counsel (OCC) 

reviewed them. HHS implemented this new policy to ensure that all draft 

warning and untitled letters from FDA were reviewed for “legal sufficiency 

and consistency with agency policy.” FDA officials told us that OCC 

implemented this policy for regulatory letters on January 31, 2002, and that 

OCC set the goal of reviewing all draft regulatory letters from DDMAC 

within 45 working days.31

 30The cable networks monitored are CNBC, CNN, CSPAN, CSPAN2, MSNBC, and CNNFN. 

The network affiliates monitored are WNBC, WABC, WCBS, WNET, and WNYW. 

31The 45-working-day goal is only for OCC’s own work on a draft letter. Thus OCC’s clock 

stops when it returns a draft letter to DDMAC for clarification or further research, and it 

resumes when DDMAC resubmits the draft letter. 
Page 23 GAO-03-177 Presciption Drug Advertising 

Since the policy change, OCC’s reviews of draft regulatory letters from 

FDA have taken so long that misleading advertisements may have 

completed their broadcast life cycle before FDA issued the letters. FDA 

provided us with information indicating that DDMAC submitted five draft 

DTC regulatory letters between January 31, 2002, and September 5, 2002. 

All of the letters have been issued. The letters were issued from 13 to 78 

calendar days after they were first submitted to OCC by DDMAC (see table 

5). As table 6 shows, many television DTC advertisements are on the air 

for only a short time—about one-fifth of them for 1 month, and about onethird for 2 months or less. Although we do not know the broadcast status 

of the advertisements targeted by DDMAC’s draft regulatory letters, there 

is a possibility that misleading advertisements could remain on the air 

after they are identified by DDMAC if FDA maintains its current review 

policies. 

Table 5: Calendar Days between DDMAC’s Draft Regulatory Letter Submission to 

OCC and Issuance Date, since January 31, 2002 

Date submitted to OCC by 

DDMAC Date issued 

Calendar days between submission 

by DDMAC and issuance

3/22/02 5/16/02 55

4/4/02 5/13/02 39

4/8/02 4/30/02 22

5/16/02 8/2/02 78

7/30/02 8/12/02 13

Source: GAO analysis of data provided by FDA. 

Table 6: Duration of DTC Television Advertisements 

Months on the air Percentage

1 22

2 10

3-6 30

7-12 29

13-28 9

Source: Analysis by Pfizer, Inc., of data from Nielsen Monitor Plus for 303 unique television 

advertisements for prescription drugs that aired between 1997 and mid-2001. 
Page 24 GAO-03-177 Presciption Drug Advertising 

DTC advertising prompts millions of consumers to ask their doctors for 

prescriptions for specific brand-name drugs. As a result, it is important 

that FDA act effectively to minimize the public’s exposure to misleading 

DTC advertisements. We found that FDA’s oversight is generally effective 

at halting the dissemination of advertisements it reviews and identifies as 

misleading. The recent change directed by HHS in FDA’s procedures for 

reviewing draft regulatory letters has adversely affected FDA’s ability to 

enforce compliance with its regulations. Without more timely action, DTC 

advertisements that DDMAC has identified as misleading can remain on 

the air too long. 

To ensure that FDA’s enforcement actions are timely, we recommend that 

HHS reduce the amount of time for internal review of draft regulatory 

letters. 

HHS reviewed a draft of this report and provided comments, which are 

included as appendix III. HHS generally agreed with our description of 

FDA’s oversight of DTC advertising. HHS explained that the intent of its 

policy change requiring FDA’s OCC to review all draft regulatory letters is 

to ensure that the letters are based on a solid legal foundation and 

promote voluntary compliance. Although we did not conduct a legal 

analysis of the letters that FDA issued either before or after the policy 

change, we found that FDA’s regulatory letters issued before this policy 

took effect already were successful at halting the dissemination of 

misleading DTC advertisements. HHS agreed with us that it is important to 

issue DTC advertising enforcement letters quickly and therefore has 

established a goal of issuing the letters within 15 working days of review at 

OCC. HHS also provided technical comments, which we incorporated as 

appropriate. 

As agreed with your offices, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days from its 

date. We will then send copies to the Secretary of Health and Human 

Services, the Commissioner of FDA, and appropriate congressional 

committees. We will also make copies available to others on request. In 

addition, the report will be available at no charge on GAO’s Web site at 

http://www.gao.gov. 

Conclusions 

Recommendation for 

Executive Action 

Agency Comments 

and Our Evaluation 
Page 25 GAO-03-177 Presciption Drug Advertising 

If you or your staffs have any questions, please contact me at 

(202) 512-7119 or Martin T. Gahart at (202) 512-3596. Key contributors to 

this assignment were Louise Duhamel, Anne Dievler, and Roseanne Price. 

Janet Heinrich 

Director, Health Care—Public Health Issues 
Appendix I: Scope and Methodology 

Page 26 GAO-03-177 Presciption Drug Advertising 

This study concerns FDA’s oversight of DTC advertising of prescription 

drugs, which takes place within DDMAC, a division of CDER. We therefore 

did not examine FDA’s oversight of advertising in other areas, such as 

biological products, and we did not look at advertising issues concerning 

nonprescription medicines or dietary supplements. 

To assess the trends in spending on DTC advertising, overall promotion, 

and research and development, we reviewed recent reports from the 

Kaiser Family Foundation, the Pharmaceutical Research and 

Manufacturers of America (PhRMA), NIHCM, IMS Health, and others. We 

did not independently verify the data reported by PhRMA and IMS Health. 

However, these data sources are consistently cited across studies because 

drug companies report their spending directly to these agencies, and they 

represent the best available information. The scope of our analysis 

focused on trends since 1997 because 1997 was when FDA issued its draft 

guidance changing the requirements for broadcast advertisements. 

To analyze the impact of DTC advertising on drug spending and 

utilization—as measured by prescriptions dispensed—we reviewed studies 

on pharmaceutical sales and examined surveys of consumer responses to 

DTC advertising. For sales information, we primarily relied on data from 

IMS Health and looked at sales of the most heavily advertised drugs. To 

understand consumer responses to DTC advertising, we relied on surveys 

conducted by FDA, Prevention Magazine, Kaiser Family Foundation, 

National Consumers League, AARP, and other researchers. Some of these 

groups have repeated their surveys over time. For example, FDA 

conducted consumer surveys in 1999 and 2002. Prevention Magazine, and 

its parent company, Rodale, Inc., have conducted ongoing research on 

consumer reaction to DTC advertising since 1997 with technical assistance 

from other groups. Its 1997 survey was conducted with the American 

Pharmaceutical Association; its 1998, 1999, and 2000 surveys were 

conducted with technical assistance from FDA; and its most recent 2001 

survey was conducted with FDA and Princeton Survey Research 

Associates. FDA’s and Prevention Magazine’s surveys have been 

conducted with nationally representative samples of adults. We also 

reviewed the literature for published and unpublished articles and reports 

on the effects of DTC advertising and other factors on prescription drug 

spending and utilization. The studies with the strongest methodologies 

were three unpublished studies, one of which is in press; the second is a 

recent Ph.D. dissertation; and the third was conducted by a university 

researcher and was presented to pharmaceutical industry representatives 

in May 2001. All of these unpublished studies used data from IMS Health 

Appendix I: Scope and Methodology 
Appendix I: Scope and Methodology 

Page 27 GAO-03-177 Presciption Drug Advertising 

and other firms that collect information about the pharmaceutical 

industry. 

To assess FDA’s effectiveness in regulating DTC advertisements, we 

reviewed federal regulations and documents and interviewed officials 

from several offices within FDA, including CDER, DDMAC, and OCC. We 

analyzed regulatory letters issued by FDA between August 1997 and 

August 2002. To avoid double counting, we separated the regulatory letters 

into three categories: letters for broadcast violations, letters for print 

violations, and overlapping letters that address both broadcast and print 

violations. We did not review the content of advertisements, nor make an 

independent assessment of whether advertisements complied with the 

FDA regulations and guidance. 

Finally, we interviewed and consulted with pharmaceutical industry 

representatives from Pfizer, Inc., PhRMA, and other key stakeholders, 

including the American Medical Association, Public Citizen, the National 

Advertising Review Council, the Freedom to Advertise Coalition, and 

RxHealth Value. RxHealth Value is a national coalition of consumer, 

provider, business, and employer groups; labor unions; insurers and health 

plans; pharmacy benefits management organizations; and academic 

researchers. 

We conducted our work from February 2002 through September 2002 in 

accordance with generally accepted government auditing standards. 
Appendix II: Surveys of Consumers’ Behavior 

after Seeing or Hearing Direct-to-Consumer 

(DTC) Advertisements 

Page 28 GAO-03-177 Presciption Drug Advertising 

Survey Sample Survey date 

Aware of 

advertisement, 

percentage 

Talked with 

physician 

percentagea

Specific 

prescription 

requested, 

percentageb

Prescription 

received, 

percentage 

of those 

who made a 

specific 

request 

Prescription 

received, 

percentage 

of total 

samplec

FDAd N=943, national 

random sample of 

consumers who 

had visited a doctor 

in the last 3 months

2002 81 23 7 69 5

FDAe N=1,081, national 

random sample, 

960 of whom had 

visited a doctor in 

the last 3 months 

1999 72 32 13 50 2

Prevention 

Magazinef

N=1,601 national 

random sample, 

age 18 or older, 

oversampled 1,000 

males 

2001 85 32 29 77 7

Prevention 

Magazineg

N=1,222 national 

random sample, 

age 18 or older 

2000 80 32 26 71 5

Prevention 

Magazineh

N=1,200 national 

random sample, 

age 18 or older 

1999 81 31 28 84 7

Prevention 

Magazinei

N=1,200 national 

random sample, 

age 18 or older 

1998 70 33 28 80 6

Prevention 

Magazinej

N=1,202 national 

random sample, 

age 18 or older 

1997 63 31 29 73 4

Weissman et al.k N=3,000 national 

random sample, 

adults 

2001- 2002 86 35 27 21 5

Kaiser Family 

Foundationl

N=2,511 national 

random sample, 

872 DTC 

advertisement 

viewers compared 

to 639 DTC 

advertisement nonviewers 

2001 N/Am

30 N/A 44 6

National 

Consumers 

Leaguen

N=1,013 national 

random sample, 

age 18 or older 

1998 80 44 N/A 22 5

AARPo N=1,310 national, 

oversampled 50 or 

older (print only) 

1998 65 N/A N/A N/A N/A

Appendix II: Surveys of Consumers’ Behavior 

after Seeing or Hearing Direct-to-Consumer 

(DTC) Advertisements 
Appendix II: Surveys of Consumers’ Behavior 

after Seeing or Hearing Direct-to-Consumer 

(DTC) Advertisements 

Page 29 GAO-03-177 Presciption Drug Advertising 

Survey Sample Survey date 

Aware of 

advertisement, 

percentage 

Talked with 

physician 

percentagea

Specific 

prescription 

requested, 

percentageb

Prescription 

received, 

percentage 

of those 

who made a 

specific 

request 

Prescription 

received, 

percentage 

of total 

samplec

Bell et al.p N=329 random 

sample of 

Sacramento 

residents 

1998 3.7 of 10 drug 

advertisementsq

35 19 N/A N/A

Mintzes et al.r N=38 physician and 

748 patients in 

Sacramento age 18 

or older 

2001 72 N/A 7 78 6

a

In the FDA surveys consumers were asked, “Did you ask whether there might be a prescription drug 

to treat your condition?” This question was not asked of consumers who thought that their doctor 

would keep them on their current drug in FDA’s 1999 survey. The Prevention Magazine surveys 

asked “Did you speak with your doctor about an advertised prescription medicine?” The percentage 

reported is based on consumers who had seen an advertised prescription medication and 

subsequently spoke with their doctor about it. 

b

In the 1999 FDA survey, this question was not asked of consumers who thought that their doctor 

would keep them on their current drug. In the Prevention Magazine Surveys, this question was asked 

only of consumers who spoke with their doctors about an advertised medicine. 

c

Percentages are calculated by dividing the number of consumers who received the prescription 

requested by the total sample. For FDA’s 1999 survey, this information was provided to us because 

the information was unavailable in its on-line survey. 

d

Kathryn J. Aikin, Direct-to-Consumer Advertising of Prescription Drugs: Preliminary Patient Survey 

Results (Rockville, Md.: FDA, Division of Drug Marketing, Advertising and Communications, April 

2002). 

e

FDA, Office of Medical Policy, Division of Drug Marketing, Advertising and Communications, 

“Attitudes and Behaviors Associated with Direct-to-Consumer (DTC) Promotion of Prescription Drugs: 

Main Survey Results” (Rockville, Md.: FDA, Division of Drug Marketing, Advertising and 

Communications, 1999), http://www.fda.gov/cder/ddmac/dtcindex.htm (downloaded March 11, 2002). 

f

Ed Slaughter, 5th Annual Survey: Consumer Reaction to DTC Advertising of Prescription Medicines, 

2001-2002 (Emmaus, Pa.: Rodale, Inc., 2002). Technical assistance in developing the survey was 

provided by FDA and Princeton Survey Research Associates. 

g

Ed Slaughter and Martha Schumacher, Prevention’s International Survey on Wellness and 

Consumer Reaction to DTC Advertising of Rx Drugs, 2000-2001 (Emmaus, Pa.: Rodale, Inc., 2001). 

Technical assistance in developing the survey was provided by FDA. 

h

Prevention Magazine, Year Two: A National Survey of Consumer Reactions to Direct-to-Consumer 

Advertising, 1999 (Emmaus, Pa.: Rodale, Inc., 1999). Technical assistance in developing the survey 

was provided by FDA. 

i

Prevention Magazine, National Survey of Consumer Reactions to Direct-to-Consumer Advertising, 

1998 (Emmaus, Pa.: Rodale Press, 1998). Technical assistance in developing the survey was 

provided by FDA. 

j

Prevention Magazine, Navigating the Medication Marketplace: How Consumers Choose, 1997 

(Emmaus, Pa.: Rodale Press and APhA, 1997). Technical assistance in developing the survey was 

provided by the American Pharmaceutical Association. 
Appendix II: Surveys of Consumers’ Behavior 

after Seeing or Hearing Direct-to-Consumer 

(DTC) Advertisements 

Page 30 GAO-03-177 Presciption Drug Advertising 

k

Joel S. Weissman, David Blumenthal, Alvin Silk, Kinga Zapert, Michael Newman, and Robert 

Leitman, “Consumer Reports on the Health Effects of Direct-to-Consumer Advertising (DTCA) of 

Prescription Drugs” (paper presented at the annual meeting of the Association for Health Services 

Research, Washington, D.C., June 2002). 

l

Henry J. Kaiser Family Foundation, Understanding the Effects of Direct-to-Consumer Prescription 

Drug Advertising (Menlo Park, Calif.: Henry J. Kaiser Family Foundation, 2001). 

m

N/A means that consumers were not asked this question. 

n

National Consumers League, “Health Care Information and the Consumer: A Public Opinion Survey” 

(Washington, D.C.: National Consumers League, 1998). 

o

Lisa Foley and David Gross, Are Consumers Well Informed About Prescription Drugs? The Impact of 

Printed Direct-to-Consumer Advertising (Washington, D.C.: AARP, 2000). 

p

Robert A. Bell, Richard L. Kravitz, and Michael S. Wilkes, “Direct-to-Consumer Prescription Drug 

Advertising and the Public,” Journal of General Internal Medicine, vol. 14 (1999). 

q

Consumers were asked whether they had seen an advertisement for each of 10 drugs that were 

being advertised at the time of the survey. An Ad Awareness Index was created by summing for each 

respondent the number of drugs for which she or he reported having seen an advertisement. On 

average, consumers were aware of 3.7 of the 10 drugs. 

r

Barbara Mintzes, Morris Barer, Richard Kravitz, Arminee Kazanjian, Ken Bassett, Joel Lexchin, Bob 

Evans, Richard Pan, and Steve Marion, “Patient Requests for Prescriptions in Environments with and 

without Legal Direct-to-Consumer Advertising” (paper presented at the annual meeting of the 

Association for Health Services Research, Washington, D.C., June 2002). 
Appendix III: Comments from the Department 

of Health and Human Services 

Page 31 GAO-03-177 Presciption Drug Advertising 

Appendix III: Comments from the 

Department of Health and Human Services 
Appendix III: Comments from the Department 

of Health and Human Services 

Page 32 GAO-03-177 Presciption Drug Advertising 
Appendix III: Comments from the Department 

of Health and Human Services 

Page 33 GAO-03-177 Presciption Drug Advertising (290168) 
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