Executive Summary

1. The Researched Medicines Industry Association (RMI), on behalf of its member pharmaceutical companies, supports the status quo in terms of the pharmaceutical industry's ability, within a mixed legislative and self-regulatory regime, to advertise prescription medicines direct to the consumer.

2. Such advertising does not occur in an unregulated vacuum. The status quo (option 1 of the Ministry of Health's discussion document) involves a plethora of checks and balances to ensure that;

• only safe and effective medicines are available,
• information to consumers is balanced and supported by comprehensive additional material and services,
• access to advertised prescription medicines is through appropriately educated and trained health professionals competent to prescribe, and
• non-compliant advertisements are withdrawn and amended.

3. In addition, the status quo involves a newly-introduced compulsory pre-vetting service aimed to assist with compliance with advertising requirements.

4. The climate today of greater involvement by consumers in their own health care means that advertising to apprise consumers of what medicines are available is justified more than ever was the case in the past. The growth in New Zealand of prescription medicines' advertising indicates a realisation by companies that the public has an increasing 'appetite' for knowledge about, and information on, health matters and treatment options including medicines. Furthermore, there is recognition that advertising, particularly on television, is the most cost-effective and accessible medium to reach a wide cross-section of people, particularly those in lower socio-economic groups who are proven less likely to visit doctors.

5. The main arguments for and against, and the main identified costs and benefits of, prescription medicines' advertising largely are speculative, however, it is the RMI's view that even if costs and benefits are overstated, the public is not harmed such that a ban is an appropriate response.

6. There is no evidence of a link, let alone a direct causal one, between growth in prescription medicines' advertising and harm to the public. Furthermore, any link between advertising, and an increase in government spending on pharmaceuticals for advertised products that are subsidised, is not direct. A link is not, however, a bad thing. Rather than indicating inappropriate and unnecessary use, it demonstrates that unmet need is being addressed - and addressed appropriately given that access to such advertised products only is through competent practitioners.

7. Medicines are legal products already that have undergone regulatory hurdles to prove safety and efficacy. New Zealand, as a democracy, has enacted rights-based legislation (the New Zealand Bill of Rights Act 1990), that enshrines New Zealanders' rights to freedom of expression, including freedom to seek, receive and impart information and opinions. Some degree of fetter on these fundamental rights is permitted and in terms of advertising medicines to the public already they exist. However, companies have the right to advertise and consumers have the right to be informed about the existence, and availability, of medicines. Unless there are demonstrable reasons for why these rights should be restricted through an advertising ban, then a ban is unjustified in a free and democratic society. From any perspective, the arguments put forward by opponents for a ban do not constitute such demonstrable reasons.

8. Advertising creates awareness that medicines are available to treat and manage certain conditions. In addition, in print media full medicine information is part of all advertisements for prescription medicines. So, too, are directions from where to obtain additional information. Likewise with television and radio advertising where the nature of these media makes it difficult to provide full information. By directing consumers to easily-accessible sources from where the more comprehensive information is available, advertisers are fulfilling their legal obligations, and their requirements to be socially responsible. Advertising promotes awareness of diseases and ill health, encouraging contacts with doctors and other health professionals.

9. There is evidence that compliance with regulatory requirements is improving, not least because of the various systems that have been introduced to assist advertisers understand their obligations. The newly-introduced compulsory Therapeutic Advertising Pre-vetting System (TAPS) is the latest initiative that the RMI is confident will improve industry's conformity with legislative and code requirements.

10. PHARMAC argues that direct-to-consumer advertising of prescription medicines "places a fiscal strain on the pharmaceutical budget" for reasons of demand. On this basis it seeks for the ministry to ban such advertising. No empirical research has, however, been conducted to demonstrate such a direct link between this advertising and an increase in PHARMAC's spending on a particular medicine, or medicines in general. There are many factors that change, or increase, demand for particular products and to seek, on such unfounded grounds, to ban what otherwise is a legitimate and legal activity should not be contemplated, let alone implemented.

11. Reasons other than advertising contribute more significantly to increases in pharmaceuticals' subsidy expenditure. Through supply-side mechanisms such as sole supply arrangements; tenders, the application of therapeutic group, and reference, pricing; price-volume trade-offs and risk sharing, and through demand-side activities to change prescribing practices and reduce consumers' expectations for subsidised medicines, PHARMAC has comprehensive control over pharmaceutical expenditure. Other practices, such as declining to subsidise innovative new medicines; delaying listing by a few years following marketing approval; listing only if companies offer 'deals' that provide price reductions for other medicines, etc, enable PHARMAC further to manipulate its exposure to fiscal risk.

12. As a government agency that has to manage conflicting demands within a limited budget, any "fiscal pressure" to which PHARMAC maintains it is exposed has to be expected. Furthermore, it is appropriate, and legitimate, that PHARMAC is subject to such pressure. It ensures transparency, and equity, in decision-making regarding what products PHARMAC will subsidise, at what price and through what 'deals' with pharmaceutical companies. In this way, taxpayers can be assured of PHARMAC's accountability for its subsidy decisions.

13. The nature of the doctor/patient relationship has been under scrutiny, and undergoing change, for the last decade or so. Medical professional dominance is giving way to the model of partnership and patient empowerment - where patients have access to information and are involved in decision-making processes about options for their own health care. This greater involvement in self care only can improve health outcomes. To the extent that advertising increases consumers' awareness about the availability of specific medicines to treat specific illness, and encourages them to seek advice and assistance from health professionals, it is a positive and necessary activity.

14. Elements of the medical profession may have difficulty accepting the different dynamic in their relationships with patients. They may find it hard to manage seekers of specific medicines who threaten to find more compliant persons when medicines they request are not prescribed. These are not, however, legitimate reasons for banning advertising and cutting-off for consumers a source of awareness about medicines' availability. Instead, prescribers need to develop appropriate relationship management skills.

15. Without evidential studies proving that advertising medicines direct to the consumer leads to an "increasing tendency for people to seek pharmacological treatment for a growing number of conditions" (medicalisation), or that as a consequence this is something to be avoided, then any support for an advertising ban on such grounds is irrational. The RMI contends that rather than direct-to-consumer advertising being the cause of "medicalisation", it is the response to the medicalisation already that has been acknowledged and developed - through existence of an illness or disease for which medication is sought.

16. The RMI rejects option 2 - a ban on prescription medicines' advertising direct to the consumer - on the following grounds;

• Serving the interests of New Zealand consumers - from the rights-based perspective to be informed about medicines' availability, and from the perspective that such advertising does have proven benefits particularly in terms of reaching at-risk and under-treated groups, a ban does not meet this criterion.
• Safety - there is no evidence that advertising results in inappropriate prescribing such that consumer safety is compromised.
• Practicable/cost-effective regulatory control - forcing consumers to have to consult with doctors in order to learn about the availability of specific prescription medicines not only is patronising, it is completely impractical, especially for sectors of society that can afford such visits the least - further disadvantaging them, and for those in isolated communities. Policing a ban, particularly with internet and international television/satellite coverage in this country, would be ineffectual without huge resources never that are going to be available.

17. The RMI fully-supports option 1 - the status quo option - for the following reasons;

• Serving the interests of New Zealand consumers - material provided in the RMI's submission supports the perspective that advertising of prescription medicines direct to the consumer has important benefits that serve consumers' interests. In addition, the self-regulatory nature of the monitoring and compliance regime, backed by legislative principles and enforcement in cases of serious breach, is working to ensure standards of advertising are maintained and improved. Introduction of the new compulsory pre-vetting system further will enhance compliance to ensure advertising meets socially responsible criteria such that there is greater balance in the benefit-risk information conveyed in advertisements.
• Safety - with the lack of any significant safety/harm issues around the fact that consumers are 'exposed' to prescription medicines' advertising, and in view of the on-going improvements in standards of advertising, achieved through the self-regulatory regime, the status quo option is the only one to pursue. Its flexibility to re-interpret socially responsible requirements, where safety for the public is an issue, further adds weight to the choice of option 1 as the most rational.
• Practicable/cost-effective regulatory control - the self-regulatory model's flexibility to respond to changing interpretations is its greatest strength. To have to prosecute every time the legislation is breached, or to amend legislation every time a new issue arises, would involve huge cost with which government could not comply easily. The fact that the self-regulatory system works has been demonstrated by changes made to the ASA Code for Therapeutic Advertising, along with complaints that have been upheld and advertisements that have been withdrawn or amended. High-level compliance by industry with the self-regulatory system, and industry meeting compliance and enforcement costs, ensures cost-effective outcomes that could not be achieved easily with any other regulatory arrangement.

18. The RMI rejects option 3 - industry self-management (status quo) but under more stringent rules and regulations, for these reasons;

• Serving the interests of New Zealand consumers - with the status quo option (option 1) now including the more stringent compulsory pre-vetting system, there is a need to let this 'bed-down' and demonstrate greater balance in benefit-risk information to the consumer. Rather than advancing consumers' interests beyond the level achieved with option 1, a more stringent option that prevents consumers from being advised about subsidised medicines unless they visit a doctor or unless a government department has deemed a campaign to be in their interests, only can diminish those interests.
• Safety - as safety is not an issue, more stringent rules and regulations cannot be justified. In fact, with more stringency limiting consumers' awareness of medicines, safety actually is compromised especially for untreated conditions otherwise that for advertising would not be brought to attention.
• Practicable/cost-effective regulatory control - in not meeting the two criteria above, as a consequence option 3 also fails this criterion. Consumers' interests are not advanced beyond the level obtained from option 1, and safety is not in question, which means a more stringent option just adds more cost for monitoring and compliance with no improved outcomes. Costs associated with reviewing the Medicines Act - or whatever legislative tool is used to impose the more stringent requirements - are unjustified and industry buy-in would not occur such that compliance costs would increase.

19. Option 4 - government agency management of advertising under more stringent rules and regulations - similarly is rejected for failing to meet the criteria;

• Serving the interests of New Zealand consumers - as per option 3, the "more stringent rules and regulations" aspect of option 4 is not going to serve the interests of New Zealanders in any better way than option 1. Government involvement in full operation and management of the regulatory system is no guarantee of improved advertising compliance and to force it through prosecutions will cost tax payers considerably, for little return. Prosecutions would not be taken lightly, nor more quickly (compared with the ASCB system), with the result that responsiveness and accountability are likely to be diminished. Furthermore, a system grounded entirely in legislative control is far less flexible to respond to changed perceptions about social responsibility in advertising.
• Safety - as with option 3, because safety is not an issue more stringent rules and regulations are not justified. For a government agency to take control in overseeing industry compliance the impact on safety would be non-existent. ·
• Practicable/cost-effective regulatory control - option 4 does not meet the two criteria above, therefore, it fails this criterion also. The costs associated with this model are not offset by any improvements in benefits beyond what exists with option 1. The loss of flexibility, plus loss of industry co-operation, means that option 4 is a step backwards.