Source: Prescription Access Litigation (PAL)

Schering-Plough (S-P) makes a family of the allergy drug products with a generic name loratadine - a 10 milligram Claritin tablet, Claritin-D with decongestant, Claritin Syrup Claritin-D 24 hour, and Claritin RediTabs. (collectively referred to here as "Claritin") In 2000, Claritin was the seventh-ranked prescription drug, with sales of approximately $1.7 billion. Total sales of the entire Claritin family accounted for nearly 30% of Schering's annual revenues, or $2.6 billion.

Direct-to-Consumer (DTC) Advertising
DTC advertising by the pharmaceutical industry has been legal since 1985, but became more appealing to the industry in 1997 when the Food and Drug Administration relaxed the standards for broadcast DTC advertisements. DTC advertising expenditures have risen from $55 million in 1991 to $2.5 billion in 2000. Such advertising greatly influences the purchasing patterns of consumers. In one study, when asked how they would respond if their physician refused a request for an advertised drug, 46% of consumers said they would try to persuade their physician to prescribe the medication despite a refusal. Product recognition of DTC-advertised allergy drugs is particularly high. S-P engages in DTC advertising to promote its products. In 2000 alone, S-P spent $111 million advertising Claritin, making it the second most-advertised drug. A consequence of the increased use of DTC advertising is the increase in the price of prescription drugs. The average cost per prescription rose 11.6% in 1999. Claritin currently costs approximately $2.13 per pill in the U.S., or $80-$85 for a 1-month supply. Despite the high cost and the extensive advertising, which inflates consumer expectations of product efficacy, a sampling of studies sponsored by non-S-P entities indicates that between 39.1-60% of patients do not benefit from Claritin.

Background on the Complaint
Member organizations of the Prescription Access Litigation (PAL) Project are filing a class action litigation against Schering-Plough and its advertisers, Commonhealth L.P. and Quantum Group (U.S.), Inc., for consumer fraud violations in connection with its DTC advertising, promotion and sale of Claritin products. In various forms of its widely distributed DTC advertising materials, including print media, web site content, and television advertisements, the complaint alleges, the manufacturer and advertisers of Claritin products use and employ unconscionable commercial practices, deception and knowing concealment.

They do this, we claim, in part, by:
(1) falsely holding Claritin products out as effective for all users when it is not; (2) failing to disclose the limited efficacy of Claritin products in its DTC advertising; and (3) falsely holding Claritin products out as effective for symptoms associated with seasonal allergies when these symptoms may result from many non-allergic causes not addressed by Claritin. The scale of this false and misleading advertising has enabled S-P and its advertisers to manipulate the true market for Claritin products, by unlawfully increasing its consumer demand, and thereby unlawfully increasing the price paid for Claritin.