On August 17, 1997, executives around northern New Jersey’s "drug corridor"—where most of the international pharmaceutical companies have their headquarters—mobilized for action. For on that day, the US Food and Drug Administration issued temporary guidelines that, for the first time, permitted the drug makers to specify the uses of their prescription remedies in their radio and television advertisements. The ruling was a major advance for consumer involvement in health care and represented a breakthrough in the industry’s ability to use direct-to-consumer (DTC) marketing to reach out to a vast, untapped consumer segment.

Reach out the industry did. By the time the new regulations became permanent, in August 1999, medications and proprietary remedies had broken into the top five categories of ad spending, along with heavyweights such as cars, retailing, movies, and financial services. Last year, pharmaceutical companies were expected to spend $2 billion on TV, print, radio, and outdoor DTC ads, up from $1.2 billion in 1998. As a group, those companies are now boosting their DTC expenditures by 25 to 35 percent annually (Exhibit 1).

This media onslaught has yielded some extraordinary results. Schering-Plough’s anti-allergy drug Claritin, for example, with $1.9 billion in US sales, is now a...