Pharmaceutical regulation: Symptoms may include cheaper drugs and fewer ads

Issue January/February 2016 By Elta Mariani

You see it every time you turn on the TV. The prompt to "talk to your doctor," paired with rushed, small-print, side-effects disclosure, hastily run across the screen. There is a chance that this may change. On Nov. 17, 2015, the American Medical Association (AMA) called for a ban on direct to consumer advertising of prescription drugs and medical devices.

The cost of health care is a huge issue in America right now. Pharmaceutical companies have placed themselves in the very center of the debate with their pricing practices. For example, Valeant Pharmaceuticals acquired two old heart drugs in February 2015 and promptly increased their prices by more than 500 and 200 percent. Consumers became upset, Congress took note, and President Barack Obama held a public forum on the rising cost of prescription drugs on Nov. 20, 2015. According to an October 2015 Kaiser Family Foundation poll, prescription drug affordability is the number-one consumer health care concern, so the forum was likely well-attended.

Where does the legal community come into this? United States Attorney's offices in Manhattan and Massachusetts have already issued subpoenas relating to the pricing, distribution, and patient support practices of Valeant. Drug companies often receive subpoenas, but while many of these do not result in charges or settlements, the fear of an investigation is often enough to drive compliance.

One recent attempt to regulate pharmaceutical companies regards the promotion of drugs to physicians. The Food and Drug Administration (FDA) brought suit under misbranding charges under the Food, Drug and Cosmetic Act in United States v. Caronia. Decided on Dec. 3, 2012, this was the first time a federal district court directly addressed the connection between the First Amendment protection of speech and pharmaceutical company promotion of FDA-approved drugs for non-FDA approved uses (also known as "off-label").

On Aug. 7, 2015, in Amarin Pharma, Inc. v. FDA, the United States District Court for the South District of New York interpreted Caronia broadly to protect any truthful, non-misleading speech to physicians about legal (although off-label) use. One of the FDA's concerns with Amarin's proposed disclosure to physicians was that the disclosure would cause a physician to prescribe Vascepa in lieu of promoting healthy dietary and lifestyle changes or prescribing statin therapy. The court dismissed this concern, claiming that physicians are able to understand nuanced drug distinctions and clinical results.

Finally, the Amarin court affirmed that the FDA can pursue mislabeling charges under the FDCA against pharmaceutical companies promoting speech that is not truthful or non-misleading. Because "truthful" and "non-misleading" are vague and subjective terms that change as new science and medicine develops, pharmaceutical companies will likely keep the FDA involved in the creation and promotion of marketing materials and labeling regardless. Thus, like for subpoenas, the fear of action (here a misbranding suit) may be enough to drive compliance despite these two pro-pharmaceutical company rulings.

Another recent attempt to regulate pharmaceutical company promotional speech regards the advertising of drugs to consumers. The AMA has called for a total ban on prescription drug and medical device advertisement. Apparently, the cost of generic and prescription drugs has increased consistently (4.7 percent this year), and New Zealand is the only other country in the world that allows advertising of prescription drugs directly to consumers. The AMA believes that the large amount of money spent on ads contributes to this increase in drug prices.

The AMA is also concerned that such advertising causes customer confusion and creates high-demand for expensive treatments. If prescriptions are too costly, patients will delay treatment, creating a real risk to the health of the public. The AMA's concerns with pharmaceutical advertisement targeted to consumers mirrors one of the FDA's concerns in Amarin with proposed disclosures to physicians. However, the Amarin court's assurance that physicians can adequately interpret the disclosure message does not apply in the area of consumer advertising. It will be interesting to see how this plays out, especially given the limits Amarin has set on the FDA's ability to regulate pharmaceutical speech.