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The August 16, 2007 issue of the New England Journal of Medicine contained a study that did not get the media attention it deserved. Studies were done of the amount of money big drug companies spent on “direct to consumer ads” and found the amount increasing each year. The latest year for which data is available was 2005 when $29.9 billion was spent. Total real spending on promotion grew from $11.4 billion to $29.9 billion from 1996 to 2005, at an average annual rate of 10.6% The percentage of sales spent on promotion for the industry as a whole increased from 14.2% in 1996 to 18.2% in 2005. In the past 9 years, spending on direct-to-consumer advertising and free samples has risen as a share of total promotion, whereas investments in detailing and advertising in professional journals have fallen as a share of the total.

The article has statistics dealing with the issue of when the FDA notified the drug manufacturers that their ads either minimized the drugs risk or exaggerated the drugs effectiveness. From 1997 to 2006, nearly 84% of regulatory letters regarding direct-to-consumer advertising cited advertisements for either minimizing risks (e.g., minimizing or omitting information on side effects), exaggerating effectiveness (e.g., portraying the indication too broadly or making unsubstantiated claims of superiority over other drugs), or both.

The direct to consumer TV ads, for example, are meant to get consumers to ask their doctors for drugs that the doctors may not otherwise feel the need to prescribe. The FDA was extremely critical of Merck & Co., Inc. (NYSE: MRK) when it wrote them in the strongest possible terms to condemn their use of false and fraudulent practices in conection with their sale of the now withdrawn drug, Vioxx. Vioxx, once a popular pain killer and Merck’s biggest drug, is said to have caused somewhere between 80,000 and 140,000 heart attacks and strokes before it was withdrawn in September of 2004. About 27,000 lawsuits are pending against Merck as a result, several of which have resulted in multi-million dollar verdicts against them. All are on appeal and Merck promises to try every case one at a time. In New Jersey, where most of the cases are pending, Merck has already been found guity by several juries of violatiing the New Jersey Consumer Fraud Act. Merck was specifically found to have defrauded the public in connection with their Vioxx sales practices. The supervising judge, Carol Higbee, has reported those verdicts to the Attorney General of New Jersey for further action as she is required to do under New Jersey law.

For more information on this subject matter, please refer to the section on Drugs, Medical Devices, and Implants.

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