New rules set forth by Google in the past days will tighten up regulations for advertising drugs online. The new regulations set in place by Google will limit advertisers to placing ads online only in their respective countries.

This means that Canadian pharmacies will only be allowed to show their ads in Canada, American pharmacies in the United States, and so on and so forth.

According to an article from Barron’s, this could have a pretty big impact.

That sounds both logical and esoteric, but it has ramifications for ad revenue. Benjamin Schachter, an analyst with Broadpoint.Amtech, notes today that a test search of each of the top 10 best-selling subscription drugs on Google found that 68% of the ads on the first page of search results were from Canadian online pharmacies that would be disallowed under the new rules. For the top five drugs, 76% of the ads were for Canadian online pharmacies. (Try it; search for Lipitor, Nexium, or Plavix.)

Google says that the change will cause a slight drag in revenue, but I am sure that big pharma is more than making up for the difference somehow.

You might be surprised to learn that TV commercials for Canadian pharmacies have run on U.S. television stations. These, by CanadaDrugs.com, were recently broadcast in Wisconsin.

CanadaDrugs.com is one of the many pharmacies in the Canadian Online Pharmacies network of licensed Canadian pharmacies. Join today to comparison shop for the best prices on prescription drugs.

Many Americans don’t realize that advertising for prescription drugs aimed at consumers was prohibited in the United States until 1997. The reason was that regulators feared Big Pharma’s billions of ad dollars would lead to the over-prescription of drugs. Based on the fact that the average number of prescriptions taken by Americans has increased from 8.9 in 1997 to 12.6 in 2007, one would have to agree with the regulators.

For the past 12 years, the United States has shared with New Zealand the dubious distinction of being the only two industrialized nations that permit drug companies to advertise to consumers.

Interestingly, though, I learned the other day that this isn’t completely true. Big Pharma has also found a way to advertise in the Canadian market — and is even allowed to advertise so-called black-box drugs that can’t be advertised in the United States.

The Vancouver Sun reports that “drug companies can do in Canada what they can’t in the U.S.: advertise prescription drugs even if they carry risks for life-threatening complications, according to a University of B.C. study.”

The article goes on:

Direct-to-consumer advertising of prescription drugs is illegal in Canada, but a federal policy change in 2000 allowed a loophole that lets drug companies state the brand name of the drug and a bit of other information such as price — as long as it doesn’t tell consumers what it is used for. It’s called reminder advertising and the change was intended to encourage medication price competition…

Such advertising, which routinely tells consumers to talk to their doctors about the product, is prohibited in the U.S. for any drugs that have been ordered by the Food and Drug Administration to carry a black-box label containing a warning about any serious complications and adverse events that come to light after the drug has been approved for marketing.

For example, [the black-box drug] Celebrex, which is used for pain and inflammation, is one of dozens of drugs that show up in Canadian reminder ads but not in the U.S…

“This review of 12 years of advertising spending in Canada is a sobering reality check: many of the most heavily advertised products have been subject to regulatory warnings of serious risk,” the study’s authors said…

Research shows patients who see ads for drugs are far more likely to ask their doctors for them and receive a prescription.

I have a feeling the Canadian government will be closing this loophole in the wake of this report.