Pharmaceutical companies were nervously watching the health care debates in Washington before Congress recessed last week. The high cost of health care will come under fire again when legislators convene next month but many analysts believe that DTC (direct-to-consumer) advertising for prescription drugs won’t be banned despite the efforts of vocal Congressional leaders such as Charles Rangel. That’s great news for the agencies and media companies that earned $4.3 billion in this sector last year.
Experts point to three reasons why the ads will continue:
- They work
- They are regulated
- They do not add to the cost of healthcare
However, perception is everything. Since becoming legal in 1997, prescription drug ad advertising has grown quickly to become the second largest category. Only the auto industry companies spend more. The high visibility of the drug ads make them an easy target for Congress. But analysts have shown that drug companies bring in $1.40 in operating income for every $1.00 they spend on advertising. With solid return- on-investment figures like that, it’s no surprise that media companies and ad agencies are also lobbying Congress to protest being unfairly singled out. Few believe that these ads will be prohibited because doing so may bring about a free-speech battle in court, an expensive proposition that Congress would want to avoid while it is working to reduce the deficit.[Source: Howard, Theresa. “Push is on to end prescription drug ads targeting consumers, USA Today. 8.10.09]