New DTC User Fees: What's Your Ad Worth to You?

Dec 18, 2007
By Pharmaceutical Executive Editors

Last week, FDA revealed the official user fee for its voluntary DTC review process. The cost, a bit more than $40,000, is chump change for multimillion dollar accounts, but it's a decent chunk of cash for smaller drug companies looking to avoid another Vioxx situation.

Besides a check for $41,390, companies must furnish FDA with multiple copies of proposed storyboards, rough video edits, package inserts, a cover letter, and a one-time operating reserve fee of $165,560. A team of reviewers from the Division of Drug Marketing, Advertising, and Communications (DDMAC) will then vet each advertisement individually to determine that there is no false or misleading information in the ad.

Some experts, such as Robert Kadar, president of Good Health Advertising, feel that the new program creates more questions than it does answers. Kadar wrote a laundry list of questions to Pharm Exec when asked his thoughts on the user fee:

If it's a voluntary program, does that mean that only pharma brands with DTC messages that marketers know to be conservative and safe will be submitted for review? And when the brand team creates edgy DTC advertising, will it not submit for review? Will the pharma companies use this in their PR efforts or in a defensive manner when they are called to account for DTC advertising that goes over the edge?

"It seems ludicrous for pharma companies to shell out this amount of money just for advertisement approval," said Bretton Holmes, president of media relations firm Holmes World Media. "While the appearance may be that the ad is 'approved,' it certainly makes one wonder if approval simply comes with being able to fork over the fee."

The fee will be used to hire the 27 additional staff members needed to review the ads. Companies that do not pay the fee by the allotted deadline will face a 50 percent penalty fee per ad. Nearly 151 television ads are slotted for review in 2008, meaning FDA stands to gain nearly $6.25 million.

According to a statement sent from DDMAC representatives to Pharm Exec, submitting draft TV ads to FDA for advisory review before publicly disseminating them provides companies with the benefit of FDA's input on whether or not the advertisements are accurate, balanced, and adequately supported and gives them an opportunity to address any problems before the advertisements are shown to the public, thus improving the quality of the advertisements.

"We have no comment on what effect this will have on private litigation, but do note that the statute provides in Title IX under the Civil Monetary Penalty provision that no person shall be required to pay a civil penalty under this provision if they submitted a DTC advertisement to the agency and disseminated it after incorporating each comment received from the Secretary," a spokesperson for FDA told Pharm Exec on Tuesday.

The program is voluntary; there is no penalty for not participating, but only companies who do participate can receive advisory reviews of draft TV ads from the agency.

"This is not necessarily a bad thing," said Fariba Zamaniyan, senior vice president of IAG Research's pharmaceutical division. "We will see more pressure put on the ad agencies to deliver, and at the end of the day, that's more for the benefit of the pharmaceutical advertisers to increase potential for ROI in their campaign. Given the size of some of these brand budgets, the tradeoff of one broadcast could pay for the fee."

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