Most high-income countries ban direct advertising of prescription drugs – why does NZ still allow it?

New Zealand and the United States are the only high-income countries to allow unrestricted direct-to-consumer advertising of branded medicines, including the name of the drug and the condition for which it is prescribed.

Our recent analysis explores why most other countries outlaw this controversial practice. We review evidence that direct advertising can lead to overdiagnosis and unnecessary treatments, causing potential harm and higher health costs.

Direct advertising of prescription medicines, primarily through television and print media, developed in the US and New Zealand during the 1990s in the absence of any new legislation or a specific ban.

After three decades, New Zealand’s legislative vacuum changed last year when the previous government formalised the legality of direct ads in the new Therapeutic Products Bill. The move surprised many, given the Labour Party’s historical opposition to the practice.

The bill became law in July 2023. But one of the current coalition government’s campaign pledges was to scrap it, based in part on concerns about regulation of natural and other low-risk health products.

The government appears committed to repealing the law. As yet, though, there is no indication of what regulatory framework would take its place. And it is unclear whether Minister of Health Shane Reti will renew his efforts while in opposition to ban the practice.

Why drug companies like direct advertising

Many medicines for common health conditions are available in supermarkets or at pharmacies to buy over-the-counter. They generally treat milder conditions, and safe use is relatively straightforward.

Other medicines are designated prescription only because their use carries a significant risk of harm, especially if used inappropriately. It is why direct advertising of prescription medicines typically exhorts consumers to “ask your doctor if it is right for you”.

Direct advertising is effective in promoting the prescription of branded and usually expensive medicines. It represents a key marketing strategy of the pharmaceutical industry, particularly in the US where billions are spent annually on such advertising.

Because of its effectiveness, companies have lobbied to extend direct-to-consumer advertising to other countries, including the European Union. Thus far, health authorities have successfully resisted because of concerns about the associated public health risks and increased health spending.

The exception is Canada, which introduced partial direct advertising in 2001 in response to industry pressure. This allowed companies to run “reminder ads” that name the drug but not the condition for which it is used.

Although most studies of direct advertising focus on high-income countries, there is evidence the practice also occurs in low- and middle-income countries, even when technically illegal.

A notable example was documented in Sri Lanka in 2000, where a drug company persuaded the national medical association to co-sponsor anti-obesity advertisements in newspapers. It then encouraged those responding to the ads to ask their doctors about the company’s prescription-only weight-loss drug.

In Turkey, widespread advertising of a prescription-only smoking-cessation drug prompted suspension of the drug’s license. Turkish doctors also called attention to the higher risks of harm related to low education levels, and the poor enforcement of prescription-only status of drugs in Turkey and other developing countries.

Other countries resist direct advertising

The nearly universal prohibition of direct advertising is regarded as a health protection measure, especially for newly marketed drugs.

In a study of 109 new drugs approved in the US, fewer than 500 patients had been treated in most pre-market clinical trials – too few to discover infrequent but significant adverse effects.

More generally, drug-related harms are a common but preventable cause of emergency department visits and hospitalisations. This underpins the rationale to treat prescription medicines differently, including how they are advertised.

The global withdrawal of the arthritis drug Vioxx (rofecoxib), one of the most heavily advertised medicines during its five years on the market, heightened these safety concerns. Vioxx raised the risk of heart attacks, but the manufacturer continued to promote the drug to the public in the US and New Zealand long after internal company documents indicated an increased risk of death.

A ban would help optimise healthcare

Direct advertising affects the doctor-patient relationship. It leads patients to seek medicines which they cannot obtain unless their doctor agrees to issue a prescription. Impacts include the time taken to discuss the target condition, which may or may not warrant medical intervention, and the advertised remedy, which may or may not reflect best practice.

Strong evidence now shows direct advertising can lead to unnecessary, inappropriate and sometimes harmful prescribing. The practice may also encourage patients to self-diagnose or misinterpret their symptoms, contributing to unnecessary diagnostic testing and treatment.

Although direct advertising may prompt patients to visit doctors with previously unreported symptoms and to discuss therapeutic options, doctors generally regard the practice as an unwelcome distraction from clinical work.

Professional bodies and consumer groups in New Zealand and elsewhere have voiced strong opposition to direct advertising.

But the commercial success of direct advertising has seen vigorous industry efforts to defend, develop and extend the practice. The pending repeal of New Zealand’s Therapeutic Products Act presents a timely opportunity to address the legality of direct advertising of prescription medicines.

It remains to be seen whether the government will be persuaded by the available evidence that banning direct advertising would help contain health spending, and to promote population health by reducing over-diagnosis, unnecessary treatments and the harm they can cause.