Drug Firms’ TV Ads Fuel Rise in Costs and Demand
When the Food and Drug Administration decided in 1997 to let prescription drug companies advertise directly to consumers on television, it unleashed a surge in demand. Patients are requesting expensive brand-name drugs more often and doctors are willingly--if not always happily--prescribing them.
The upside is that many patients are being treated with the most up-to-date medications for conditions--such as high cholesterol--that they might not have even known they had until an advertisement drew them to a doctor’s office.
But the trend has a price. Americans spent $100 billion for prescription drugs in 1998, an 84% increase in five years. Two reinforcing trends are driving this worrisome component of medical inflation, and television advertising is contributing to both:
* The average price of a prescription climbed 40%, to $37.38, during the last five years, propelled in part by the cost of advertising. Overall consumer inflation during that period was only about 15%.
* Americans are consuming more medication. New and better drugs are being brought to market at a record pace, thanks to accelerated development by the drug companies and a fast-track approval system by government regulators. And advertising has encouraged consumers to buy them.
Beset by rising costs, health maintenance organizations, insurers and employers are laying most of the increase off on the public. Consumers with insurance might pay $20 toward each prescription instead of $10, and the consumers’ payment might go even higher for drugs not on their health plan’s list of approved medications.
“If current trends continue, this growing inflation [in drugs] will soon overtake the cost of all other health benefits,” according to a recent report prepared for the Blue Cross-Blue Shield Assn., whose member health plans cover 67 million Americans. “Paying for these services will pose a major threat to U.S. employers’ global competitiveness.”
Patients’ rising out-of-pocket costs could generate a new surge of consumer anger and result in government action. Both President Clinton and congressional Republicans have proposed adding prescription drugs to the list of services covered by Medicare, and the issue seems likely to become a major topic of debate in next year’s presidential and congressional campaigns.
The dynamics of the situation are fairly simple.
Schering-Plough Corp., for instance, spent a whopping $97 million in the first seven months of this year to promote Claritin, a prescription drug that relieves allergy’s sniffing and wheezing. Merck & Co. Inc. shelled out $56 million advertising Propecia as a baldness cure, and Pfizer Inc. paid $50 million for publicity for one prescription medication that scarcely needs any: Viagra, the anti-impotence compound.
And doctors are reluctant to stand in the way of the kind of popular demand such promotion gives rise to.
Doctors Go Along With Demand
“When the patient says, ‘Give me something, give me something,’ physicians often acquiesce because they are afraid they may end up losing the patient,” said Dr. John C. Nelson, an obstetrician-gynecologist in Salt Lake City.
The pharmaceutical industry says these developments are nothing to be embarrassed about. Medication is almost always preferable to surgery and prolonged hospitalization, said Judy Bello, executive vice president of the Pharmaceutical Research and Manufacturers of America.
“Don’t jump to the conclusion this is a bad thing,” she said. “It can be a wonderful thing for the health of patients.”
About 395 new medicines have been introduced in the last decade, compared with 231 in the previous 10 years. And now in various stages of development are more than 450 medications just to fight the big killers: heart disease, cancer and stroke.
As the baby boom generation moves into middle age and beyond, demand will inevitably mount for drugs dealing with arthritis, osteoporosis and a host of other chronic problems of the elderly. The boomers, the 76 million Americans born from 1946 through 1964, will be increasingly receptive targets for pharmaceutical promotion campaigns.
Drug advertising had long been limited to medical journals and other specialized publications for experts. As far back as 1985, the FDA permitted the drug industry to advertise in general-interest newspapers and magazines. But the big boom didn’t begin until 1997, when the FDA eased the rules to allow promotions through television. Spending, a scant $55 million in 1991 for all direct-to-consumer advertising, immediately boomed.
“Evidence demonstrates that all this advertising works. In fact, it works exceedingly well,” said the Blue Cross-Blue Shield report. It noted that the 10 most heavily advertised drugs accounted for 22% of the total increase in spending by consumers for all drugs in the last five years.
About 70% of people who visit a doctor’s office walk out with a prescription, said Edward Kaplan, a vice president of the Segal Co., an employee benefits consulting firm.
“There is a high demand as people read about the new drugs in the papers and see the commercials on television,” Kaplan said. “Doctors want to keep people happy; they want them to come back.”
Advertising Sends People to Doctors
Dr. Les Zendle, associate medical director for Kaiser Permanente in Southern California, said advertising drives into doctors’ offices many patients who didn’t know they needed to be treated for such conditions as diabetes and high cholesterol.
Another under-treated group motivated by advertising is the population suffering from depression. Many are embarrassed or afraid to seek help.
“There has been a stigma about depression,” said Mary Graham, vice president of the National Mental Health Assn., an advocacy group. “Advertising gets consumers talking to physicians and seeking help.”
Moreover, when men go to a doctor’s office for a Viagra prescription, for example, they will get help with other medical problems they may not have known they had. Doctors commonly find cases of prostate cancer, diabetes and high blood pressure when they do the physical exam that most doctors require before writing a Viagra prescription.
The bad side of advertising is that heavy promotion of particular drugs can distort health care spending, crowding out dollars that could be better used for other purposes.
Too often “people will ask for things they don’t need,” said Zendle of Kaiser. He said he worries whether doctors, already hard pressed to find enough time to spend with patients, will use some of those precious minutes to explain why a drug that has been promoted on television might not be any better than an older, cheaper medication.
New drugs typically cost twice as much as older drugs used to treat the same problems, according to the Blue Cross-Blue Shield report, called “Keeping Pharmacy Coverage Affordable.” Imitrex, a nonnarcotic pain reliever, cost an average of $154 for a prescription last year, compared with an average price of $21 for one of the older pain relief compounds.
For years, the standard drug for treating ear infections in children has been amoxicillin, a highly effective and reasonably priced antibiotic. But one company was heavily promoting another medication, aiming its advertising at worried parents, said Zendle. The federal government’s Centers for Disease Control and Prevention stepped into the debate and issued a bulletin reminding doctors that amoxicillin remains the drug of choice.
The hottest market for direct advertising involves allergy medications. Four of the 10 most heavily advertised medications--Claritin, Zyrtec, Nasonex and Flonase--are in this category.
Claritin, with a huge advertising campaign, has become a universally recognized brand among consumers and physicians. Yet much cheaper compounds will do essentially the same job of relieving allergy symptoms, according to experts; Claritin’s only advantage is that it does not cause drowsiness.
The only other difference is price. At a Kaiser system pharmacy, a 30-day supply of Claritin costs $65.40, compared with $1.40 for a supply of chlorpheniramine, an over-the-counter compound.
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Medications on the Airwaves
These are the most heavily advertised drugs, as measured by spending during the first seven months of 1999. Figures are in millions of dollars.
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Drugs Spending Claritin (allergy) $97.1 Propecia (baldness) $56.2 Viagra (impotence) $50.4 Zyrtec (allergy) $43.4 Prilosec (ulcers) $40.8 Lipitor (cholesterol) $40.8 Meridia (weight reduction) $38.2 Nasonex (allergy) $35.7 Detrol (urinary control) $33.3 Flonase (allergy) $32.5
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Source: IMS Health
