Pharmaceutical Companies’ Direct-To-Consumer Advertising Budgets Tripled in Recent Years, Study Finds

Pharmaceutical companies tripled their direct-to-consumer advertising budgets in recent years, to $2.7 billion in 2001 from $800 million in 1996, according to a study released yesterday by the Kaiser Family Foundation, the Boston Globe reports. The study, conducted by researchers at Harvard University and the Massachusetts Institute of Technology, found that the "marketing blitz" launched by drug makers accounted for about 12% of drug spending growth in 2000 and allowed drug companies to bring in $4.20 in sales for every $1 spent on consumer drug ads. The study compared DTC advertising to more traditional approaches such as sending drug representatives to meet with physicians, distributing free drug samples and advertising in medical journals (Rowland, Boston Globe, 6/12). Promotions directed at physicians accounted for 86% of overall marketing spending, with 55% used for free drug samples, 29% spent on drug representative contact with physicians and 2% allocated to medical journal advertising. DTC advertising accounted for only 14% of marketing activities, according to the study (Kaiser Family Foundation release, 6/11). In addition, the study found that while ads increase drug sales, they do so for an entire class of drugs, including competing brands because doctors -- not consumers -- have the final decision on what drugs to prescribe, the Globe reports (Boston Globe, 6/12).

Dr. Drew Altman, president and CEO of the Kaiser Family Foundation, said, "Some have suggested that DTC advertising is a primary reason for the significant pharmaceutical cost increases that we have seen in recent years. This study shows that DTC advertising is an important factor, but not the primary cause" (Kaiser Family Foundation release, 6/11). A spokesperson for the Pharmaceutical Research and Manufacturers of America did not comment on the study (Boston Globe, 6/12). The study is available online. Note: You must have Adobe Acrobat Reader to view this report.