Trade Agreements and Direct-to-Consumer Advertising of Pharmaceuticals

Abstract

There is growing international concern about the risks posed by direct-to-consumer advertising (DTCA) of prescription pharmaceuticals, including via the internet. Recent trade agreements negotiated by the United States, however, incorporate provisions that may constrain national regulation of DTCA. Some provisions explicitly mention DTCA; others enable foreign investors to seek compensation if new regulations are seen to harm their investments. These provisions may thus prevent countries from restricting DTCA or put them at risk of expensive legal action from companies seeking damages due to restrictions on advertising. While the most recent example, the Trans-Pacific Partnership Agreement (TPP), collapsed following US withdrawal in January 2017, early indications of the Trump Administration’s trade policy agenda signal an even more aggressive approach on the part of the United States in negotiating advantages for American businesses. Furthermore, the eleven remaining TPP countries may decide to proceed with the agreement in the absence of the United States, with most of the original text (including the provisions relevant to DTCA) intact.

Keywords: Trade Agreements, Pharmaceuticals, Advertising, Direct-to-Consumer Advertising (DTCA), Investor-State Dispute Settlement