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Executive Summary

Ever since US regulations prohibiting direct-to-consumer advertising were relaxed in August of 1997, pharmaceutical companies have been spending a lot of time, and billions of dollars, reaching out to average Americans. Increasingly, the Internet is their medium of choice. But in Europe, companies are at a distinct e-disadvantage. Drug firms are still forbidden to communicate with consumers about prescription medical products in almost any meaningful way. They are not allowed to mention brand names, nor to say specifically what a product does. Firms can, however, let consumers know that they are working in a general disease area. And they can encourage consumers to go see their doctors. For some companies--specifically, those with dominant market shares--such vague communications may be worthwhile. Pfizer, the manufacturer of Viagra, seems to think it will be. The American firm has reportedly budgeted $30 million for a Europe-wide ad campaign to educate consumers about the symptoms of erectile disfunction. Pfizer stands to benefit, because at the moment, Viagra is the only orally administered impotence drug on the market. It effectively has no competition. Other Big Pharma firms with major market shares in Europe have also begun communicating to consumers, encouraging them to see their doctor, knowing that doing so increases the odds that patients will emerge from consultations with prescriptions. For these firms, dominating markets such as contraceptive products, certain vaccines and insulin, the issue is how to get European consumers to the web sites that present their messages. But general-awareness campaigns aren't likely to help companies selling products in crowded markets such as hypertension, and might actually benefit competitors. Given the restrictions on DTC communication, it's little wonder that most drug marketers in Europe are directing their Net efforts to physicians, with whom they can communicate directly about prescription medicines. But frustration with the European restrictions is growing, and governments--who say the regulations prohibiting DTC advertising are meant to protect consumers-- recognize that European citizens are already accessing medical information and being exposed to product advertising via the Internet. Many industry observers expect Europe's anti-DTC regulations to be relaxed eventually. Companies leery of irritating bureacrats that might retaliate in some way are thinking what they can do within the bounds of current law.
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