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Industry Groups Oppose Oregon Bill Calling for Advertising Price Disclosure

March 9, 2017 – Four major advertising and media industry groups have issued a joint letter opposing an Oregon bill (S.B. 792) that would require manufacturers to disclose prescription drug wholesale prices in any ads run in the state or face potential civil penalties of up to $5,000 per ad publication or broadcast.

According to the March 8 letter to Oregon senators from the Association of National Advertisers (ANA), the American Association of Advertising Agencies (4A’s), the American Advertising Federation (AAF) and the Coalition for Healthcare Communication, prescription drug product advertising already is heavily regulated by the FDA and direct-to-consumer (DTC) advertising “may be the most heavily regulated business category in our entire economy.”

“The Coalition and its allies are watching closely for such proposals in the states,” said Coalition Executive Director John Kamp. “While the Trump administration promises to reduce government regulation on business, the states can be expected to fill the gaps.”

The joint letter (oppose-senate-bill-792-2) states that by mandating that all DTC advertising in the Oregon disclose the wholesale price paid by pharmacies or the manufacturer’s list price for the product, the Oregon bill violates both the First Amendment because of content-based restrictions and the Interstate Commerce clause of the U.S. Constitution because of the state-specific disclosure. “The legislation creates a substantial disincentive for pharmaceutical companies to provide valuable information to consumers,” the groups assert.

They also cite a concern that this proposed legislation would set “a very dangerous precedent for a wide range of products and services that become ‘controversial,’” and that as a result, marketers “could face threats from more than 30,000 state and local governments that seek to mandate specific disclosures in their ads.”

“This legislation would be particularly pernicious because it would leave medicine marketers with only two choices: (1) create new ads for Oregon; or (2) just skip the state altogether,” according to Kamp. “The former would increase substantially the cost of advertising in Oregon, and the latter would decrease the information available to Oregon professionals and patients.”

To view the bill, go to: https://olis.leg.state.or.us/liz/2017R1/Downloads/MeasureDocument/SB792/Introduced