A briefing for Members of the European Parliament on
Charles Medawar
December 2001


 The underlying problem

Why has the international pharmaceutical industry (‘Pharma’) been pressing so hard to get EU law changed, to allow Direct-To-Consumer promotion of prescription-only medicines, linking it to talk of health education and “The Expert Patient”? The short answer is that Pharma is in crisis and has become unsustainable. Companies are no longer able to innovate enough to grow, a problem so far largely obscured by rounds of mergers and acquisitions. It is now clear that Pharma can survive in its present shape only by expanding markets and selling ‘blockbuster drugs’ – which in turn demands Direct-To-Consumer (DTC) advertising and promotion.


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This Table illustrates a critical and worsening situation (Price Waterhouse Coopers, 2001). The underlying problem is that the major companies depend for their future prosperity and independence on pharmaceutical innovation, but new drugs aren’t coming through at anything like the required rate. Hence Pharma’s growing dependence on blockbuster drugs (products with sales of US$500m/year or more) and the increasing investment needed to promote them. But this too is an uphill struggle: huge investments in marketing are required, yet fewer than 4% of all NCEs (New Chemical Entities) achieve ‘blockbuster’ status. 


The situation has been getting progressively harder for Pharma, especially in the last ten years. Even the most successful companies are managing to develop no more than half the number of NCEs they need to survive.


“The main issue is that, in order to sustain average industry growth, a company has to introduce each year one new product that will sell around £300 million per year for every 1-1.5% it has of the world pharmaceutical market … A company the size of the newly merged GlaxoWellcome/ SmithKline Beecham needs 3 – 7 products each year, while one the size of AstraZeneca needs 2 – 4 products each year. The problem is that research productivity is failing. None of the major companies is close to hitting the target.” (Horrobin, 2000) [i]


“John Niblack, vice-chairman and president of global R&D, said Pfizer could only bring two drugs to market a year – not enough to continue to grow revenues and earnings at the rate investors have come to expect … Mr Niblack said in an interview: ‘Two drugs a year is probably not quite enough at this stage of market consolidation. It’s daunting, but it’s not just Pfizer that is facing this situation’.” (Financial Times, 2001)[ii]


This in part explains the ongoing “market consolidation”, the relentless ‘urge to merge’. The big international companies need more and more capital to research and purchase new products - and twice as much as that to promote them. However, mergers can only be a short-term remedy and may[iii] aggravate the problem in the longer-term. (Horrobin, 2000)


“The reality is that the urge is driven by a failure to innovate at the required rate. Yet, since most of the evidence indicates that the larger the R&D budget, the lower is the productivity per £100 million spent, the likely outcome of such mergers is innovation failure and the need to merge yet again to cover up the disaster”.


These are the main factors that explain the observation in the Wall Street Journal (2000)[iv], that “the pharmaceutical industry is gradually shifting the core of its business away from the unpredictable and increasingly expensive task of creating drugs and toward the steadier business of marketing them”.


Thus the pressure to relax the EU medicines advertising laws has become really intense, with concerted lobbying by Pharma from the treetops to grassroots.


Trade versus health imperatives

The strategy for DTCA used by the Association of the British Pharmaceutical Industry (ABPI) has been enacted throughout Europe, especially in the major drug-producing countries. The ‘Battle Plan’, was described in a private meeting by the Director-General of the ABPI, and reported in the trade journal, Pharmaceutical Marketing, as follows:


"Now the ABPI has announced that it is launching the final stages of a campaign before it tackles the Government and the EU head on ... It is the spearhead of a carefully thought-out campaign. The ABPI battle plan is to employ ground troops in the form of patient support groups, sympathetic medical opinion and healthcare professionals - known as 'stakeholders' - which will lead the debate on the informed patient issue. This will have the effect of weakening political, ideological and professional defences … Then the ABPI will follow through with high-level precision strikes on specific regulatory enclaves in both Whitehall and Brussels." (Jeffries, 2000)[v] 

DTC marketing has been permitted in the USA effectively since 1997. Since then, expenditure on advertising alone has risen from almost nothing to around US$2.5bn/year (2000). At the same time, the number of blockbuster drugs has also risen dramatically, as has the US drugs bill. [vi] In 1996/97, 23 blockbusters accounted for about 28% of total US prescription drug sales. Five years later, 69 blockbusters account for over half of the $US161 billion US Pharma market (IMS Health, 2001)[vii]. These same few heavily advertised products account for over half of the total year-on-year increase in the US drugs bill (NIHCM, 2001)


Thus, from a trade perspective – and especially at a time of crisis – the US market has clear advantages, as a relatively free market environment with the potential for continuing double-digit growth. The US market represents 40% of the whole world market, so all major companies stand or fall on their performance there – and naturally they lobby for the introduction of similar market conditions elsewhere. Wherever their home base, Pharma companies increasingly regard the US as their spiritual home, and as a model of how they want the rest of the world to be. 


However, from a health perspective, the situation in the US looks increasingly dire. Double-digit growth in the market translates as drug and healthcare costs that are increasingly seen as unaffordable and unsustainable even in the USA – where only half the population has good basic healthcare cover (OECD, 2001)[viii], and over 40 million people have no health cover at all (WHO, 2000). Health expenditure of this order would very rapidly cripple the kind of national health care provision enjoyed in EU countries and elsewhere. See Tables.


More than this, it is clear that health investment produces increasingly diminishing returns. However great the benefits for some, and in spite of great advances in standards of clinical practice, the overall health return on investment is now low, and the absolute costs too high. The Table also explains why, in global terms, there are good reasons for resisting the introduction of US models of health care. Health status in many poorer countries might be transformed, with only a tiny fraction of this spend.



US life expectancy at birth (years)

US health spend   (as % of GDP)

US health Spend (US$/per capita)

US pharma companies’ research spend (US$bn)

US spend on pharmaceuticals etc  (US$bn)























































Source: US life expectancy at birth (both sexes, all races); Data based on the National Vital Statistics System, from Table 28, Health, United States, 2000, page 160. US health expenditure data compiled by OECD, from Table 114, Health, United States, 2000, page 321. Expenditure on pharmaceutical goods from OECD Health Data, 2001. R&D investment data from Pharmaceutical Research and Manufacturers of America, Backgrounder, January 1998, accessed September 2001 at


The Table below illustrates something of the conflict between trade and health imperatives, and the relative merits of the US and other health systems. On the one hand, US market conditions support Pharma companies and, at best, US standards of healthcare are superb. On the other hand, the US health system represents very poor therapeutic value for money and falls far short of meeting community health needs.



Total per capita health expenditure in international dollars

Disability-adjusted life-expectancy (overall years)




United Kingdom

























































 Source: Statistical Annex, Tables 5, 8, The World Health Report 2000, (Geneva, World Health Organisation, May 2000), pp. 176-182. 192-195. Omitted: Malta (70.5 years - $755/head), Andorra (72.3 - $1,216), San Marino (72.3 - $1,301), Monaco (72.4 - $1,799).  These WHO data refer to Disability Adjusted Life Expectancy (DALE). "To calculate DALE, the years of ill-health are weighted according to severity and subtracted from the expected overall life expectancy to give the equivalent years of healthy life". Thus "DALE summarises the expected number of years to be lived (for babies born in 1999) in what might be termed the equivalent of 'full health'."


Value of innovation

Against this background, both the European Commission and the governments of some Member States have recently taken steps to improve market conditions for companies. The objective has been to improve the competitiveness of the EU pharmaceutical industry and to stall the threatened exodus of Pharma companies to the USA. This has been a high-level concern even (and perhaps especially) in the most successful drug producing and exporting nations. “This is a truly global industry whose companies have more choice than ever before when deciding where to place new investment”. (Blair, 2001)[ix] [x]


In November 1999, Prime Minister Blair met to discuss the industry’s concerns with the heads of AstraZeneca, Glaxo Wellcome and SmithKline Beecham.[xi] The immediate output was a 70-page Task Force report, co-chaired by Lord Hunt, UK Minister of Health responsible for drug regulation. Published in March 2001, the report emphasised that the UK industry was, “a jewel in the industrial crown of the UK economy,” and that a new spirit of cooperation had begun (PICTF, 2001). [xii]


The report of the Pharmaceutical Industry Competitiveness Task Force detailed a variety of specific measures and commitments by government that might help Pharma to prosper – including an undertaking to fight its corner in Europe on Completion of the Single Market. This UK initiative also led directly to the setting up of the European task force, known as “G10”. [xiii]


“Lord Hunt … pressed these points of principle at the round table on European pharmaceutical industry competitiveness hosted by Enterprise Commissioner Erkki Liikanen in Brussels in December last year. These discussions are expected to lead to the creation of a European-level Task Force on pharmaceutical industry competitiveness”


Pharma has not of course pressed its case for market liberalisation in Europe by pointing to any general decline in innovation. The focus has been on the relative under-performance and lack of ‘innovation’ in Europe, and on the threat of Pharma investing elsewhere. These issues appear to have preoccupied both the UK and EC Task Forces. Their analyses have not recognised that industry profitability in the US is also in decline, as measured by TSR (Total Shareholder Returns). The average TSR for the top 20 Pharma companies “has fallen by 7% over 2 year period up to February 2001” (Price Waterhouse Coopers, 2001).


Nor has Pharma attributed the decline in innovation to any shortcomings of its own making (including being a victim of its own success). The industry’s focus has been exclusively on external constraints and pressures and ‘hostile’ market conditions. Pharma blames restricted market access, tighter and more complicated regulation, increased emphasis on drug evaluation, price controls and lack of intellectual property protection.


The evidence suggests that both the UK Task Force and the G10 believe that the crisis in innovation exists in Europe, not in the USA. However, this is because they make no distinction between the relatively few new drugs that offer some worthwhile therapeutic gain, and the majority that don’t. This distinction is critical – and to ignore it is absurd - because most new drugs offer only marginal advantages over existing products. Fewer than one in four new drugs brings any important therapeutic gain. (European Parliament, 1994)[xiv] (US Food and Drug Administration, 1992-1999)[xv]  (NIHCM, August 2000),[xvi] (Prescrire International, 2001).[xvii]


The complete failure to distinguish between more useful and less useful innovation is underlined by the “Main Competitiveness & Performance Indicators” proposed by in the UK Task Force report (PICTF, 2001, Table 8.1). The three main Industry Outputs are identified as:


·    Proportion of world first patents filed for marketed new drugs divided by proportion of world R&D spend


·    UK-based companies’ number of ‘global top 75’ new active substances


·    % of world pharmaceutical R&D spend


Similarly, the main analysis relied on by the EC (Gambardella etc al, 2000)[xviii] has judged the value of innovation solely in economic terms. The analysis takes no account of therapeutic significance, nor the value of innovation as a response to medical need (Medicins Sans Frontières, 2001).[xix] Both the Commission (DG Enterprise) and the UK Task Force have regarded all marketable innovation as worthwhile. They implicitly define the best of innovation as a blockbuster drug.


The limitations of this perspective – from a health point of view - are underlined by examination of the therapeutic usefulness of the best selling US brands. Most are treatments for ‘diseases of affluence’; relatively few represent important therapeutic gains. The difference between economic and therapeutic breakthroughs is profound. Really effective drugs advertise themselves – albeit not as explosively as the manufacturers would want and need.


“Global comparisons show Europe spends a relatively large amount of its pharmaceutical budget on older pharmaceuticals. Thus we must consider ways and means to enhance investment in innovative new products by the pharmaceutical industry.” (Liikanen, 2000)[xx]


The analyses relied on by the UK Task Force and DG Enterprise not only take for granted that new licensed drugs are better medicinal products, but also fail to ask whether the costs of innovation are or should be as high as Pharma claims. A detailed and critical review by the Washington DC-based NGO, Public Citizen, (2001)[xxi] gives much evidence to suggest that the true cost of R&D is much lower than Pharma claims.


“This new Public Citizen report reveals how major U.S. drug companies and their Washington D.C. lobby group, the Pharmaceutical Research and Manufacturers of America (PhRMA) have carried out a misleading campaign to scare policy makers and the public. PhRMA’s central claim is that the industry needs extraordinary profits to fund expensive, risky and innovative research and development (R&D) for new drugs. If anything is done to moderate prices or profits, R&D will suffer, and, as PhRMA’s president recently claimed, ‘it’s going to harm millions of Americans with life-threatening conditions.’ But this R&D scare card – or canard – is built on myths, falsehoods and misunderstandings, all of which are made possible by the drug industry’s staunch refusal to open its R&D records to congressional investigators or other independent auditors.


“Using government studies, company filings with the US Securities Exchange Commission and documents obtained by the Freedom of Information Act”, Public Citizen’s report estimates “that the drug industry’s claim that R&D costs total $500 million for each new drug (including failures) is highly misleading” and that “the actual after-tax cash outlay – or what drug companies really spend on R&D … is approximately $110 million”.



Private consultations

The watershed for DTC advertising in the US came in August 1997, when the FDA relaxed its rules for advertising on TV, radio and the Internet. By the end of 1997, the significance of DTCA was being discussed at Commissioner level in Europe.[xxii]  Note that this was not because of demand from health interests within the EU. An EC evaluation of the operation of the Community medicines control system, 1995 – 1999,[xxiii] reported general satisfaction with Community advertising regulation at this time:


“The general view is that the advertising provisions are working acceptably and there is no clear support for consideration of any changes. Exceptions arise in relation to … the need to clarify the dividing line between health education and promotion of prescription-only medicines to the public”


By contrast, the demand for DTC marketing from the US industry is clear from a prominent agenda item on the 1998 “Mid Year Scorecard Report” of the Transatlantic Business Alliance. (The TABD is a top-level forum joining companies and the EC, at Chief Executive/ Commissioner level. The Dialogue was founded by the US and EU governments in 1995 “to forge a consensus industry agenda for government action.”)  


Identified Priority/Definition of Problem

The U.S. permits industry, subject to strict regulatory controls, to provide information about prescription medicines direct to consumers (DTC). Such communication is severely restricted in the EU. This causes an inconsistency in the regulatory treatment of industry in the transatlantic marketplace, deprives EU citizens of the right-to-know compared to their U.S. counterparts, and is out of step with technological advances whereby all citizens are able to obtain information about medicines from the Internet or other international sources but not within their own countries”


DG Enterprise got the message. In October 1998, the then Head of the Pharmaceuticals Unit told the annual conference of the IFPMA (International Federation of Pharmaceutical Manufacturers Federations) that preliminary talks on the possibility of lifting the ban on DTC advertising might be expected soon. (Deboyser, 1998)[xxiv] The TABD “Charlotte Communique” (November 1998) welcomed this and the industry then requested, “that the Commission establish a working group to review DTC advertising issues”. [xxv]


The Dialogue then changed tack. The Commission published a proposed directive (June 1999) suggesting strict limitations on advertising medicines “to the general public”, also allowing Member States to prohibit any advertising for medicines that were reimbursed.[xxvi] This ruled out full-blown DTC advertising, but left open the door to promoting prescription-only medicines to patients.  The TABD “Berlin Communique” (October 1999) reacted brusquely to what it suggested was a frank denial of citizens’ rights - but also switched focus, to the needs and interests of patients.


 "EU citizens should have the same access to health information as US citizens. The EU should review existing regulations and work on solutions so that patients in the EU can benefit from appropriate health information, carefully taking into account the American experience in exploring deregulation of DTC advertisements. In this process, patients’ interests should be safeguarded and consultation with doctors should be assured”

Meanwhile the Pharmaceuticals Unit within DG Enterprise had begun to consult with its Pharmaceuticals Committee – the representatives of Member States. This was a key input in a strongly business-oriented EC Directorate, since Committee members represent their Departments of Health. Many have professional qualifications; trade considerations would not be uppermost in their minds. The Pharmaceuticals Unit and the Committee agreed a way forward in April 1999.


First, they agreed an “Interpretive Guidance”[xxvii] which made a distinction between drug information that either did, or did not, contain any inducement “to promote the prescription, supply, sale or consumption of the medicinal product”. Secondly, they agreed to set up a Working Group of selected interested parties, to ‘brainstorm’ the issue – acknowledged in their papers as “currently subject of an intensive debate”.[xxviii] In the event, the Working Group met only once, about a year later. It produced nothing much more than agreement with the Unit’s recommendation to circulate a questionnaire to canvass more views on the DTC marketing issue. Questions were subsequently posted on the DG Enterprise website: none specifically referred to DTC marketing and, for the most part, they were incomprehensible. (Medawar 2000)[xxix]


The results of this questionnaire-based consultation have not been published. Nor, apparently, has much been communicated to members of the Pharmaceutical Committee. The only clue to the outcome is a one-liner in the UK Task Force report. “The government’s view is that the European ban on direct to patient advertising of prescription medicines should remain and it sees no appetite amongst other Member State governments for any change to this position”. [xxx]


Patient representation

In the Review of Pharmaceuticals Legislation published in July 2001, DG Enterprise made proposals, in Article 88(2), to remove the legal restriction on Direct-To-Consumer marketing of prescription drugs. Central to the new proposals is the idea that such information should be provided by companies only to meet the demands and needs of patients and patient organisations.


The proposal to permit companies to respond to information requests from individual patients is uncontroversial, not least because of the wealth of Pharma-sponsored information already available on the Internet. It would not be feasible[xxxi] to restrict access to such data, nor should the community need much protection when people seek out information for themselves. The problem for the Community starts when people are persistently confronted by more and less subtle drug promotions targeted at them.


What happens when commercially inspired messages about diagnosis and treatment dominate the information diet?  Will this encourage rational drug use and understanding of the balance of benefit and risk? Will it promote drug treatments over possibly better alternatives, including non-intervention and/or less effective and cost-effective medical treatments? Will it overwhelm the supply of drug information from independent sources, and compromise the editorial independence of the press and media, and their coverage of health issues?[xxxii] To what extent will it promote the medicalisation of everyday life? Will it make people feel healthier, or reduce their confidence in their own abilities (and responsibility) to get better and stay well?


"The trouble is, we are being taken in by the propaganda, and it is bad not only for the spirit of society; it will make any health-care system, no matter how large and efficient, unworkable. If people are educated to believe they are fundamentally fragile, always on the verge of mortal disease, perpetually in need of health-care professionals at every side, always dependent on an imagined discipline of ‘preventive’ medicine, there can be no limit to the numbers of doctors’ offices, clinics, and hospitals required to meet the demand. ...We are, in real life, a reasonably healthy people. Far from being ineptly put together, we are amazingly tough, durable organisms, full of health, ready for most contingencies. The new danger to our well-being, if we continue to listen to all the talk, is in becoming a nation of healthy hypochondriacs, living gingerly, worrying ourselves half to death." (Thomas, 1980)[xxxiii]


These are some of the basic questions that have barely been raised in the official deliberations on DTC marketing. The UK authorities resisted public consultation, to the extent of defending their secrecy before the Ombudsman (and losing the case).[xxxiv] DG Enterprise did consult, but in mysterious ways.

The key to understanding the present EC proposals, to allow some measure of DTC marketing, seems to lie in the emphasis placed on meeting requests for information made by patient organisations:


“First, we say that there must be a request from the side of patients or patient groups. I want to say that this change has been done very much due to the repetitive demands of patient groups … What we want to do is, as a test case, with respect to three specific disease groups, to make sure that validated and patient-oriented information can be made available – when this information is requested by patients or groups of patients (Liikanen, 2001)[xxxv]


“… the communication of information related to certain medicinal products is authorised under strict conditions in the interests of patients in order to respond to their legitimate needs … Member States shall authorise the dissemination of information relating to certain medicinal products … in order to respond to the expectations expressed by patient groups” (DG Enterprise, 2001)[xxxvi]  

But what kind of patient organisation does DG Enterprise have in mind? Following the one-off ‘brainstorming’ meeting, in March 2000, the Head of the Pharmaceuticals Unit in DG Enterprise wrote to Health Action International (HAI)[xxxvii] to explain a shift in policy (Brunet, 2000)[xxxviii]. The letter made it clear that the Pharmaceuticals Unit was no longer satisfied with the input from the consumer bodies it had traditionally consulted, since they are “not able to do what we have historically looked to them to do, namely the representation of the interests of consumers as patients”.

The Head of the Pharmaceuticals Unit wrote that “a number of representations” from patient groups had been made to that effect – suggesting that HAI should “get in touch with Mr Elgie of Gamian Europe who has also expressed, on behalf of a number of patient groups, an interest in representing patients in this debate”. GAMIAN (Global Alliance of mental illness advocacy organisations) was founded by Bristol-Myers Squibb. Rodney Elgie[xxxix] had also been treasurer of the International Association of Patient Organisations (IAPO), which was founded and funded by a consortium of 30-odd Pharma companies, operating as Pharmaceutical Partners for Better Healthcare. [xl]


This and other evidence suggests that the Pharma ‘Battle Plan’ - “to employ ground troops in the form of patient support groups” - has been very successful. There is clear and worrying evidence that European patient organisations are coming to resemble their counterparts in the USA. The industry has gone to great and sometimes improper lengths to get patient organisations on side – sweetening them to an extent that might be expected to diminish fairness, integrity, transparency and healthy competition. 


·     The National Alliance for the Mentally Ill (NAMI) - “a grassroots organisation of individuals with brain disorders and their family members” - received $11.72 million from 18 Pharma companies, between 1996 and mid-1999. NAMI's leading donor was Eli Lilly, maker of Prozac. They gave £2.87 million during that period. (Silverstein, 1999) [xli]


·    “The drug companies have also spent millions over the past decade to create seemingly independent groups that promote their agenda. Last year, the industry trade group created Citizens for Better Medicare, which has been waging a $50 million advertising campaign against a government-controlled prescription drug benefit. And lobbying records show that the drug companies are major backers of the Alliance for Better Medicare, which describes itself as ‘a coalition of nearly 30 organizations representing seniors, patients, medical researchers and innovators, doctors, hospitals, small businesses and others’.” (Gerth & Stolberg, 2000)[xlii]


·    “As chairman of the Danish Migraine Association, I often stand up and tell the media and my fellow chairmen of other patient organisations that we have to be extremely careful in order not to be in effect advertising organs for the medical industry. When the Danish Migraine Association refused to take industry 'assistance' to write and print the magazine, organise the lectures and generally run the association, the industry, generously assisted by the research doctors, literally created a new patient organisation as a substitute for the Migraine Association in 1996. This was a bit too blatant to be generally accepted among informed patients and opinion makers, but only because we did not accept the situation gracefully, and made the press aware of our situation. I still hear about patient organisations that are literally being taken over, and who do not even understand what goes on. Luckily we have a growing awareness about the problem.” (Bulow-Olsen, 2000)[xliii]


·    “A pharmaceutical company will tomorrow break new ground by encouraging the public to demand that the NHS pay to make available one of its drugs. The campaign, Action for Access, is funded by Biogen and organised by a PR company on its behalf. It will urge multiple sclerosis sufferers to demand their health authorities agree to prescribe beta-interferon on the NHS, a very expensive drug, which can help some sufferers, but not all.” (Boseley, 1999)[xliv]


·    In 1999, the UK-based Patients Association joined forces with Pharmacia and Upjohn (P&U) in a prototype DTC television campaign aimed at “raising awareness” about urinary incontinence. The TV commercials mentioned no brand name, but encouraged patients to see their doctor. Those who did stood a good chance of being prescribed the leading and most heavily promoted brand, Detrusitol (tolterodine, P&U). However, tolterodine is relatively ineffective. It would probably not help most users much more than a placebo, and non-drug treatments would often be preferable. P&U had also repeatedly attracted criticism for misleading advertising, notably in the USA. Between 1998 and 2000, P&U received five warning letters from the US Food & Drug Administration. In the two most recent, the company was taken to task for making headline claims about the "selectively" of its product - suggesting that it acted on the bladder, with less drying-up effects in the mouth. P&U evidence was based not on clinical trials, but on studies with cats. In the UK, the company resisted regulatory pressure for over a year. The Patients Association became aware of this too late: they had already supported the TV campaign and accepted a large donation from P&U. In turn, they said a nice thank-you to the company and gave it one of their ‘Platinum Awards’.[xlv]


DG Enterprise has yet to address the problems that may arise from this. One is that Pharma companies get ‘two bites of the cherry’ – pleading their own case and then having their views 'represented' in consultations and regulatory matters by more or less captive patient representatives and organisations. Another is the vulnerability of patient interests to overtures from companies and trade associations. Many patient groups struggle for survival and DTC advertising campaigns can empower them. Directly and indirectly, such campaigns draw attention to the needs of special and deserving interests and the disadvantages they face. For the groups that represent them, DTCA can bring in more members, perhaps more column-inches and sound bites, greater exposure and prominence and sense of achievement, and sometimes large grants from companies too.


The G10 has acknowledged the problem exists, to the extent of proposing that “the Commission should provide core funding for European Patient groups to enable them to participate independently in the debate and decision-making on health matters at a European level”. But how much would it help if funding were steered by DG Enterprise, when its primary commitment is to entrepreneurship and market growth - and given its perspectives on the relationship between trade and health?


The G10 Task Force (the majority)[xlvi] seems to take it very much for granted that DTC marketing can provide patients with information they want, need and would benefit from. People would become better informed, disease awareness would grow and the stigma of illness would be assuaged. Moreover, trade liberalisation would encourage companies to innovate the important new medicines that people want now. Simple: win win. 


Information for patients

The G10 consultation paper[xlvii] states as ‘facts’, that “there is a need to review national regulations which may inhibit the legitimate provision of factual information or disease education literature by industry”, also that “the pharmaceutical industry can play a crucial role as providers of reliable, factual and balanced information about their medicines for patients that will support the appropriate and effective involvement of patients and appropriate use of their products”


The G10 paper offers no evidence to support this view, and there is much to refute it. In theory, Pharma companies are well able provide information that complies with the twelve standards for good quality patient information identified by G10. In practice, this does not, and arguably cannot, happen. To expect substantial compliance with G10’s ‘good quality information’ standards seems hugely naïve.[xlviii] Experience with DTC advertising in both the USA and New Zealand shows that companies routinely push to the limits and frequently exceed them. During 1999, the FDA filed violation notices for one in four products supported by DTC ads (McKinsey, 2000) [xlix] Levels of non-compliance been reported in New Zealand have been higher still.[l] 


The complexities of enforcement are clearly great, because of the depth of scrutiny needed to correct unbalanced representation. The pressure for ‘medicalisation’ seems almost unstoppable, as the following example shows. It concerns a complaint made by the FDA (16 Nov 2000) about a 60-second DTC advertisement on TV for Sarafem® (fluoxetine) tablets. The FDA found it "lacking in fair balance and misleading":


"The graphics of the advertisement show a frustrated woman trying to pull her shopping cart out of its interlocked line-up in front of a store. The concurrent audio states 'Think it's PMS? It could be PMMD." The imagery and audio presentation of the advertisement never completely define or accurately illustrate premenstrual dysphoric disorder (PMDD) and there is no clear distinction between premenstrual syndrome (PMS) and PMDD communicated. Consequently, the overall message broadens the indication and trivializes the seriousness of PMDD, a disorder whose hallmarks include a markedly depressed mood, anxiety or tension, affective lability, and persistent anger or irritability. For a diagnosis of PMDD, these and other symptoms must markedly interfere with work, school, usual social activities, and relationships."


The concept of medicalisation is hard to define. Suffice it here to recognise that the risk is real (Thomas, 1980)[li], and to ponder the state of Community health when runny noses present as allergic rhinitis, headaches as migraines and forgetfulness as Alzheimer’s disease:


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DG Enterprise may be thinking that Europe is not about to import American-style DTCA. These headlines do however give some indication of the level of information companies chose to provide to prospective patients, even when strictly regulated.[lii]


It is also worth bearing in mind that no other country has anything like the regulatory capacity of the US Food and Drug Administration. Indeed, two-thirds of the world’s countries that “still do not have laws to regulate pharmaceutical promotion or do not enforce the ones they have.” (Mintzes, 1998) [liii]  The implications of this for Community Enlargement (and the Community’s commitments to Development and External Relations) must be borne in mind. [liv]  



A preliminary response

The G10 Group is now seeking to define the distinction between “advertising” and “information to empower patients”. It seems unlikely that distinction can ever be clear, particularly when EU Law requires that advertising “shall encourage the rational use of the medicinal product, by presenting it objectively and without exaggerating its properties”. It also goes beyond wishful thinking to imagine that companies can be relied on to meeting the standards proposed by G10. “Good quality patient information should include the following elements”:


·        Uses patients’ questions as the starting point

·        Ensures that common concerns and misconceptions are addressed

·        Refers to all relevant treatment and management options

·        Includes honest information about benefits and harms

·        Includes quantitative information where possible

·        Includes checklists and questions to ask the doctor

·        Includes sources of further information

·        Uses non-alarmist, non-patronising language in active rather than passive voice

·        Is well designed, structured and concise with good illustrations

·        Is explicit about authorship and sponsorship

·        Includes references to sources and strength of evidence

·        Includes the publication date


Such standards are rarely attained even in the best professional literature, including most clinical trials. Whether one can trust an industry fighting for its survival to encourage the rational use of its products, by presenting information about them objectively and without exaggeration, seems very doubtful indeed.


The Commission could do most to empower consumers with information, by disclosing an abundance of hard data relating to product licensing and regulatory assessment. Indeed, there is a proposal in the Pharmaceutical Review to release more regulatory data, but the wording makes the true intention entirely unclear. [lv]


The revised definition of ‘advertising’, proposed in Article 86(1), seems improved by the additional reference to information that promotes “awareness of the availability” of products.[lvi]  However, the term “advertising” itself is unhelpfully restrictive, since it excludes a range of activities (e.g. public relations, sponsored communications) that are basic to product marketing, and that need to be included. What needs to be controlled is promotion – “all informational and persuasive activities” by manufacturers and their agents “the effect of which is to induce the prescription, supply, purchase and/or use of medicinal drugs”. Enforcement of appropriate standards would be improved by spelling out what quality of information is required, also by including a formal requirement to substantiate claims on request. (WHO, 1988).[lvii]


Taken at face value (and considering the pressure on DG Enterprise) the Commission’s proposals might seem a very sensible compromise – but it is hard to trust them. It seems inconceivable, for example, that the Commission would be able to restrict this DTC marketing experiment, as proposed, to just three disease categories (AIDS, asthma, diabetes) over a period of five years. Once the principle has been established,  the Commission could not possibly stand in the way of requests ‘to be better informed’ from all kinds of patient organisations. Some, no doubt, are already waiting in the wings, with sponsored groups well to the fore.


It is disappointing to find little evidence of the Commission’s thoughts on issues that are basic to the proposals in the Pharmaceutical Review. One critical issue is whether the Commission intends to allow the advertising of prescription drugs by brand name?   If brand name drug advertising were to be permitted, the Commission should then abstain from talk of educating patients. What has brand name advertising ever done for professional standards or standards of health?  If the intention of Article 88(2) is to encourage honest attempts to inform patients/ consumers, all references to drugs should be by generic name – or with brand names in the smallest print. 


Another key issue, not mentioned in the DG Enterprise consultations, is the degree of control envisaged over ‘permission marketing’. Should companies be allowed to advertise to consumers who have not made direct and specific requests to them? The rapid proliferation of DTC promotion of medicines would be guaranteed if companies were allowed to use mass mailing lists to advertise to anyone who had (or hadn’t) ticked a box asking for further general information about an illness and/or possible treatments –e.g. in response to a magazine article.


Overall, the Commission’s analysis seems neither well-founded nor realistic. The emphasis on trade imperatives seems excessive, as does the lack of health perspective. Most of the decision-making went on behind closed doors, and uninhibited consultation with industry was matched by indifferent dialogue with other interests. There are also strong grounds for suspicion that the most heavily sponsored patient organisations have had (and will have in future) undue influence on the decision-making process.


We do not believe satisfactory answers will be found until some deeper questions have been addressed. Perhaps the most important relates to the locus of pharmaceutical regulation within the EU: trade and health issues both matter, but which comes first? Are medicines primarily a matter for trade or health – for this Directorate or that? We are not able to share the high optimism implied in the G10 terms – its main task being to “review the extent to which current pharmaceutical, health and enterprise policies achieve the twin goals of both encouraging innovation and ensuring satisfactory delivery of public health and social imperatives.” 


It seems fanciful to call them “twin” goals – as if the success of Pharma naturally went hand-in-hand with health. Why does the G10 consultation document invite no discussion of such issues as the cost and quality of innovation, the blitz marketing of drugs, and the risks of medicalisation, sponsorship and dependence? The nature of the conflict between health and trade imperatives has not yet been properly addressed. Five members of the Task Force have official responsibilities for Health; some distinctive contribution from them is now due. [lviii] 


Does the European Community really want to invest in innovation by investing in Big Pharma – and if so, on what terms? What else could be done for health with US$500 million – the cost estimated by industry of developing a single new drug? Should the Community be pouring money into future promise, hopes and dreams - or attending more to present and future priorities and needs? How much more could be done for health by using more effectively the understanding and technologies we have today?


These issues need thinking through, but in much greater depth than the present legislative timetable would allow. What the Commission decides will change the face of medicine, defining it either as a healthier market or as a great enterprise in health.  We have no doubt that the Commission’s proposals would, if enacted, open the floodgates of direct to consumer promotion. Once open, such doors can never close.




[i] Horrobin DF, Innovation in the pharmaceutical industry, Journal of the Royal Society of Medicine, July 2000, 93, 341-345. The author is an experienced drug innovator, currently head of a biotechnology company based in Scotland.


[ii] Michaels A, Pfizer R&D unable to sustain group growth rate, Financial Times, 12 September 2001, 30.


[iii] The point is controversial: some studies suggest that innovation productivity is decreased with increasing size of the R&D budget, others show the opposite. The reasons have a lot to do with what is regarded as innovation – and whether financial or therapeutic gain is being measured. Consistency between analyses is confounded also by variables such as repeated company mergers, regulatory environment and the time frames examined, in each case. The case for the greater efficiency of larger R&D budgets has certainly not been made. For a thorough review, see: Ben-Asher D, In need of treatment? Merger control, pharmaceutical innovation and consumer welfare, Journal of Legal Medicine, 2000, 21, 271-349.


[iv] Harris G, Drug Firms Stymied in the Lab, Become Marketing Machines, Wall Street Journal, 6 July 2000). See also: Jenkins JW: Is advertising the new wonder drug? Wall Street Journal, 25 March, 1998;


[v]  Jeffries M., The Mark of Zorro, Pharmaceutical Marketing, May 2000, 4-5.


[vi] The point is acknowledged, though barely developed, in the main analysis relied on by the European Commission (DG Enterprise): “In general, total drug expenditures have been driven up by the introduction of new drug therapies, higher third-party coverage of drugs, the substitution of higher-priced new drugs for low-priced existing drugs, and, especially in the US, more aggressive marketing by manufacturers through direct-to-consumer advertising.” (Gambardella et al, 2000 – see below). This reference to DTCA is cited to Scanlon WJ (Testimony before the Subcommittee on Health, Committee on Ways and Means, US House of Representatives): Adapting private sector management methods for a Medicare benefit, US General Accounting Office, 11 May 2000. The GAO, in turn, relied on research by the National Institute for Health Care Management (2000).  "The 25 drugs that contributed most to the increase in retail sales of pharmaceuticals in 1999 accounted for 40.7 percent of the overall $17.7 billion rise in spending. Most of these drugs were heavily advertised to the public and experienced a sharp growth in sales - an aggregate 43 per cent in a single year. In contrast, the growth in sales in all other prescription drugs from 1998 to 1999 was 13.3 percent." The NIHCM reported similar findings for the year 2000. Increased sales of the 50 drugs that were most heavily advertised to consumers accounted for almost half the $20.8 billion increase in US drug spending. The remainder of the spending increase came from 9,850 prescription medicines that companies did not advertise or advertised very little. (NIHCM, Prescription Drugs and Mass Media Advertising, 2000, a research report by The National Institute for Health Care Management Research and Educational Foundation, 20 November 2001). See


[vii] Online report:…/1,2779,1000-1000-143299,00.htm – “The Upswing in Blockbuster Drugs”, 7 October 2001.


[viii] OECD (Organisation for Economic Co-operation and Development), Health Data 2001, - Table 18: Total health care coverage, % of population.


[ix]  Blair T, Foreword by the Prime Minister, Pharmaceutical Industry Competitiveness Task Force, Final report, March 2001. Available at


[x] “PICTF was set up by the Prime Minister in March 2000 to look at the action needed to ensure the UK remains an attractive place for the R&D pharmaceutical industry to locate its business in an increasingly competitive business environment” (Department of Health, Science and Innovation Strategy, September 2001).


[xi] The latter two companies have since merged, to become GlaxoSmithKline.


[xii] Hunt P, McKillop T (co-chairs) Pharmaceutical Industry Competitiveness Task Force, Final report, March 2001. Available at  


[xiii] “The group of ten is intended to bring together the top decision-makers on medicines from the EU”. There are in fact 12 members: they include the EC Commissioners for Enterprise (Liikanen) and Health (Byrne), one trade minister (Sweden), three health ministers (UK, Germany, Portugal), three representative of Pharma and one from the generics manufacturers, a representative of the non-profit health insurers and one consumer health representative.


[xiv] “It is widely recognised that only a very small proportion of new and modified drugs entering the market actually represent medically important advances. Some are simply ‘me-too’ copies of existing drugs that offer either no new therapeutic breakthroughs or marginal improvements of a very technical nature” Belcher PJ (Chambers BR, Ed), Analysis of Issues and Tends in the EU Pharmaceuticals Sector, Environment, Public Health and Consumer Protection Series E-1, External Study, The European Parliament, Directorate General for Research, March 1994.


[xv] “Only 22 percent of the drugs approved by the FDA from 1982-1999 represented important therapeutic gains” Between 1982 and 1991, the US FDA approved 258 NCEs, of which 137 (53%) were said to offer “little or no therapeutic gain”, 80 (31%) offered “modest therapeutic gain, and 41 (16%) represented an “important therapeutic gain.” A new, arguably less stringent classification system was then introduced. Drugs submitted for marketing were designated either for “priority” or “standard” review. From 1992 to 1999, 170 (23%) drugs were assigned for priority review (as drugs representing “significant improvement compared to marketed products …) and 560 (77%) for standard review, as drugs that (“appear to have therapeutic qualities similar to those of one or more already marketed drugs”). See Public Citizen (Washington DC), Rx R&D Myths: the case against the Drug Industry’s R&D “Scare Card”, 23 July 2001.


[xvi] Prescription Drugs and Intellectual Property Protection – Finding the Right Balance between Access and Innovation, Issue Brief, (Washington DC: National Institute for Health Care Management and Educational Foundation, August 2000).


[xvii] Of the 2254 drugs evaluated between 1981 and 2000 in the rational prescribing journal, La Revue Prescrire, 74 (3.3%) were judged a major therapeutic advance. (A look back at 2000: overabundance and deregulation. Prescrire International 2001, 10: 52-4. )


[xviii] Gambardella A, Orsenigo L, Pammolli F: Global competitiveness in pharmaceuticals, A European perspective, report prepared for the Directorate-General Enterprise of the European Commission (2000), available at


[xix] “Virtually no new drugs are being developed for diseases that predominantly affect the poor”. See: Medicins Sans Frontières: Fatal Imbalance The Crisis in Research and Development for Drugs for Neglected Diseases, Brussels: MSF International, 9 October 2001.


[xx] DTC Developments in Health, IMS News report, 3 February 2000. Accessed at, 08/01/01


[xxi] Public Citizen (Washington DC), Rx R&D Myths: the case against the Drug Industry’s R&D “Scare Card”, 23 July 2001.


[xxii] The Commission (DGIII – Industry) makes brief reference to “a more flexible approach to direct-to-consumer-advertising” in its contribution at the second annual “Bangemann Round Tables”. Pharma sponsored and hosted this event (Second Round Table, Completing the Single Pharmaceutical Market, Frankfurt, 8 December 1997.)


[xxiii] Evaluation of the operation of Community procedures for the authorisation of medicinal products, Evaluation carried out on behalf of the European Commission by Cameron McKenna and Andersen Consulting, European Commission, Directorate General Enterprise, Pharmaceuticals and Cosmetics, 2000.


[xxiv] Update for EU advertising rules, SCRIP No 2378, 14 October 1998, 4; EC to reconsider advertising rules, ERA News No 80, November 1998.

[xxvi] Pharmaceutical Products: Community Code relating to medicinal products for human use, European Commission proposal to the European Parliament, presented 28 June 1999.


[xxvii]. Information on the outcome of the 47th meeting of the Pharmaceutical Committee, 15-16 April 1999.


[xxviii] Working group on information/advertising, briefing paper PHARM 275, 48th Pharmaceutical Committee meeting, 27-28 September 1999.

[xxix] Medawar C: The DTCA Manifesto, 'DTCA - the Unhealthy Pursuit of Health!' Development Dialogue (Dag Hammarskjold Foundation),2000, 1-2, 84-94. Because you're worth it, Health Matters, 43, Winter 2000/2001, 7-9. See also: Prescription Drugs: Direct advertising? (Guest editorial), International Journal of Risk & Safety in Medicine, 13,2000,81-86. See also Social Audit letter to P Brunet, 14 July 2000, at


[xxx] PICTF, 2001, paragraph 2.45


[xxxi] Under the heading, “Information and protection of patients - Possible ways forward”, the G10 consultation paper suggests (2.7) “Patients actively seeking information about products from company web-sites should be permitted to do so, provided the information conforms to the standards outlined below…”. It then lists the G10 criteria mentioned in the Response section of this paper. This seems barmy: on civil rights grounds alone, there is nothing the European Commission can or should do to prevent people from accessing corporate information, including the large volumes now available which fall far of the standards G10 has in mind. If it tried, it would surely (and rightly) fail.


[xxxii] In a gesture of defiance against obvious and long-standing abuse, the editors of some of the world’s leading medical journals recently adopted a common position on disclosure of information about the source and validity of articles submitted for publication, and possible conflicts of interest. It would be too much to expect the lay media generally to do the same. See: Davidoff F: Sponsorship, authorship, and accountability, Lancet, 15 September 2001, 358, 854-856.


[xxxiii] Thomas L: The Medusa and the Snail, New York: Bantam, 1980


[xxxv] E Liikanen, Commission’s proposals to review pharmaceutical legislation. DG Enterprise Speech/01/354/ European Commission Press Conference, 18 July 2001.


[xxxvi]  DG Enterprise, Pharmaceutical Legislation Review, Article 88(2), European Commission, 18 July 2001


[xxxvii] HAI’s request to attend this meeting was refused, though it had long since demonstrated its interest in and appreciation of the issues being discussed. See for example: Mintzes B: Blurring the Boundaries: new trends in drug promotion (Amsterdam: Health Action International, 1998).


[xxxviii] Brunet P: letter to Bas van der Heide, Coordinator, Health Action International, 4 July 2000


[xxxix] Biographical data published alongside a 1998 article Elgie wrote for Pfizer Forum reads as follows: “Rodney Elgie has been an attorney in private practice more than twenty years, rising to the position of senior partner. He became a member of Depression Alliance in 1992, and served on the Charity’s Executive Committee as the honorary legal advisor. He was appointed the first full-time Executive Director of Depression Alliance in early 1995 and spearheaded the dramatic growth in both the membership of the charity and its self-help groups. He has overseen the creation of regional offices in Wales and Scotland and the appointment of numerous full and part-time members. Rodney is currently the Chairman of the National Depression Campaign in the UK and serves on numerous Committees within the mental health field. He is a Task Force Member of the newly created International Association of Patient Organizations and a key member of Gamian Europe. He speaks at conferences throughout Europe and is particularly interested in the development of truly patient-centred care by instituting training sessions for health professionals and users.” (  Elgie was struck off the Roll of Solicitors for reckless and dishonest handling of clients’ funds (Findings and Order of the Solicitors’ Disciplinary Tribunal, Case no 5905/1990/4817, 19 Feb 1991).


[xl] IAPO’s chief executive is also a member of the Board of the Picker Institute, whose CEO is the one consumer representative on G10.


[xli] Silverstein K,, MOJOwire magazine, Nov-Dec 1999.


[xlii] Gerth G, Stolberg SG: Drug industry has ties to groups with many different voices, New York Times, 5 Oct 2000


[xliii] Anne Bülow-Olsen (Chair, Danish Migraine Association), personal communication, November 2000

[xliv] Boseley S, Drug firm asks public to insist NHS buys its product, The Guardian, 29 September 1999.

[xlv] There is a long correspondence about this (1999-2001), with both the Medicines Control Agency and the Patients Association, at


[xlvi] It is worth noting the qualifications mentioned in the G10 consultation paper (September 2001), which makes “some tentative suggestions on the way forward”. The G10 proposals “have not been agreed by the G10 Medicines Group as a whole” … “This document does not attempt to summarise all the issues that have been raised … The statements contained in this document do not reflect European Commission policy, nor that of the other G10 members …“


[xlvii] G10 Medicines: High level group on innovation and provision of medicines: Consultation paper, September 2001, paragraphs 2.2 and 2.4


[xlviii] Is this “hugely naïve”?  The essential proposition here is that it should be obvious that Pharma is constitutionally incapable of delivering good quality information, to G10 specifications. No company would survive long if it did. This has nothing to with morality, for the same reason a cat is not immoral because it is programmed to stalk mice and birds. The need to promote products comes down to survival instincts. Products are the company’s heart, especially the blockbusters that now sustain Pharma. They are deeply precious objects and treated accordingly, mightily backed by the relentless and energetic use of limitless resources. Within the company, products are supported by a belief system that always tends to assume the triumph of benefit over risk. Corporate perspective, position, organisation and activity are dedicated to the idea that products are good, and criticism bad. Operating within Pharma demands this mindset, and it cannot help but be reflected in communicating with consumers. 


[xlix] Aitken M, Holt F: A prescription for direct drug marketing, The McKinsey Quarterly, 22 March 2000, 82.


[l] In 1998, the New Zealand Department of Health ordered an enquiry into DTC advertising, when surveys suggested that two-thirds of DTC advertisements did not comply with the industry's voluntary code of practice. A probationary period ensued, and a more recent survey (1999/2000) reported improvement: one in three DTC advertisements failed to comply. This led to proposals from the industry (adopted in November 2000) for pre-vetting of advertisements at the companies' expense. Following a more recent review, the NZ DoH recommended “that legislation regulating DTCA should be strengthened to ensure advertisements provide balanced information to consumers” (NZ Department of Health: Direct-to-consumer advertising rules will become stricter, Press release, 14 August 2001)


[li] See note xxxiii above


[lii] This survey led to the following conclusions: “Consumers are being increasingly exposed to direct-to-consumer advertisements for prescription products. In turn, physicians are increasingly confronted with patients who ask questions, or who make suggestions, on the basis of these advertisements. We hope that our survey has provided clinicians with some sense of the content of direct to consumer advertisements. Our findings indicate that these advertisements rarely quantify a medication’s expected benefit, and instead make an emotional appeal. This strategy probably leaves many readers with the perception that the drug’s benefit is large and that everyone who uses the drug will enjoy the benefit. In view of the fact that FDA standards focus on truth and balance, but do not address whether or how data should be presented, our results are not surprising. The provision of complete information about benefit would serve the interests of physicians and the public.” (Woloshin et al, Direct-to-consumer advertisements for prescription drugs: what are consumers being sold, Lancet, 6 October 2001, 358, 1141-1146).


A detailed review of DTCA by Consumers Association has reported comparable findings: “This research has highlighted a number of studies that have found a large proportion of US ads to be unfair and potentially misleading. In addition, with much promotional activity directed at establishing brand and company loyalty, it is hard to see how this information would be of value to patients facing decisions about treatment” (Promotion of Prescription Drugs: public health or private profit? (London: Consumers Association, 2001)


[liii] Mintzes B: Blurring the boundaries: new trends in drug promotion, Amsterdam: Health Action International, 1998


[liv] The prospect of Community Enlargement, and the EU’s commitment to world development demand such factors be taken into account. What the EU decides about DTC marketing will greatly influence what happens elsewhere.


[lv]  Article 21(4) provides for disclosure of information, except for “information of a commercially confidential nature”. That could apply to almost any bad news about a drug: the term is meaningless until defined. Good Freedom of Information laws test the harm that might be done by disclosure against a public interest right to know. Prohibitions against disclosure of legitimate trade secrets (in-house know-how) or information likely to cause substantial harm seem fair.


[lvi] In the age of the Internet, the prominent references to “door-to-door information” and “canvassing activity” seem quaint.


[lvii] World Health Organisation: Ethical Criteria for medicinal drug promotion (Geneva, WHO, 1988). Article 7 states, for example, that all claims “should be reliable, accurate, truthful, informative, balanced, capable of substantiation and in good taste. They should not contain misleading or unverifiable statements or omissions likely to induce medically unjustifiable drug use or give rise to undue risks…” 


[lviii] There are Ministers of Health and Ministers of Health and they will not always speak with one voice. The UK representative on G10, Lord Hunt, has combined the positions of Co-Chair of the UK Pharmaceutical Industry Competitiveness Task Force - and Minister of Health, responsible for drug safety. licensing and regulation. The UK government sees no apparent conflict between the quest for trade and health - nor is there evidence of much concern about this reflected in either the composition of G10 or its terms. Its output remains to be seen. 


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