Rx DRUG ADVERTISING: Raising Sales, Health Care Costs
Direct-to-consumer advertising may be largely responsible for skyrocketing pharmaceutical spending, as the 25 drugs with the largest advertising budgets accounted for more than 40% of the increase in retail pharmaceutical spending in 1999, a National Institute for Health Care Management study released yesterday revealed. The New York Times reports that heavy drug advertising "persuad[es] consumers to push for newer, costlier medicines when less expensive drugs would work just as well," according to the study. After investing $136.8 million into advertising campaigns for Claritin, Schering-Plough saw sales for the allergy drug climb 21% to $2.6 billion last year, while $55.4 million worth of advertising for the anticholesterol drug Lipitor reaped $2.6 billion in sales, a 56% increase from 1998, for Pfizer's Warner-Lambert. The study reported that overall retail spending for medications shot up to $111.1 billion last year, up from $93.4 billion in 1998, mirroring an increase in advertisement spending, which jumped from $1.3 billion in 1998 to $1.8 billion last year. The study also noted that "[m]ass media advertising of prescription medicines is heavily concentrated among relatively few drugs, about 50." Steven Findlay, study author and director of research and policy at the National Institute, indicated that consumer advertising may account for 10%-25% of the recent rise in drug spending, adding that the amount of commercialism may be "inducing inappropriate demand" for some drugs. Mary Nell Lehnhard, senior vice president of the Blue Cross and Blue Shield Association, echoed his concerns, saying, "Drugs advertised on television are often high-cost substitutes for other therapies that are just as effective." However, Pharmaceutical Research and Manufacturers Association of America spokesperson Jackie Cottrell countered this criticism, pointing out that advertising offers an added incentive for people to visit their doctors and provides access to information about medical conditions that may have otherwise gone untreated. The study found that increased advertising for allergy drugs reflected a significant rise in doctor visits for allergy symptoms, from 13 to 14 million per year between 1990 and 1998 to 18 million in 1999. Drug advertising rose substantially after the FDA relaxed its marketing rules in 1997, but in the last three years the government has repeatedly admonished drugmakers for false advertising or misleading claims about the benefits of a product, understatement of risks and promotion of drugs for unapproved uses. In addition to marketing, other factors have improved pharmaceutical sales, including increases in insurance coverage for drugs, an aging population and more FDA-approved treatments (Pear, 9/20).
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