Advertising Helps Fuel Rising Drugs Expenditure – Report

21 November 2001

The advertising of prescription drugs helped cause a sharp rise in medicine sales last year, according to non-profit research body the National Institute for Health Care Management.

Expenditure on prescription drugs surged $20.8 billion in 2000. Almost half of this leap was generated by increased sales of just fifty heavily advertised drugs, said the NIHCM, with the 9,850 medicines backed by little or no advertising accounting for the other half.

Crucially, the jump in consumer expenditure on these fifty drugs was not driven by price increases, but by a surge in the number of prescriptions.

The advertising of prescription medicines – permitted only in the US and New Zealand – is becoming increasingly controversial as both the use of ads and the sales of drugs climb. The Food and Drug Administration is currently investigating whether to alter regulations from 1997 making it easier for pharmaceutical firms to run TV spots.

The NIHCM warned that the findings do not prove a direct link between increased pharmaceutical adspend and rising drugs purchases, but instead add to growing evidence that advertising may be one factor involved. Other reasons for surging consumer expenditure on medicine include the ageing population, the increased use of long-term treatments for conditions such as heart disease and newer, more pricey drugs.

Unsurprisingly, the big drug companies gave the report a less than warm reception, saying that their own research found no direct link between advertising and rising expenditure, and that the NIHCM’s study omitted benefits patients gain from ads.

“We have an epidemic of undertreatment of serious illnesses in the United States,” insisted Alan F Holmer, president of Washington trade group the Pharmaceutical Research and Manufacturers of America.

“Surveys of both patients and physicians show that direct-to-consumer advertising leads patients who would otherwise go without medical care for these terrible illnesses to seek treatment for the first time.” He added that ads help ensure patients keep taking drugs prescribed by their doctors.

Other findings of the NIHCM’s study include:

* A 35% surge in consumer drug advertising from $1.8bn to $2.5bn between 1999 to 2000. The biggest increases came from Merck & Company (up 118%) and Pfizer (nearly 100%).

* British drugs giant GlaxoSmithKline spent more on consumer ads than any other pharmaceutical firm, raising its adspend 40% year-on-year to $417m.

* The most heavily advertised drug was Merck’s arthritis treatment Vioxx, which also contributed more to the increase in consumer expenditure on drugs than any other medicine. Adspend on Vioxx totalled $160.8 million (more, notes the report, than was spent on Pepsi or Budweiser), with sales more than quadrupling from $330m in 1999 to $1.5bn.

* Rival arthritis treatment Celebrex was the seventh most advertised drug and the fourth largest contributor to rising sales.

News source: New York Times