In 1987, under the banner of deregulated free markets holding sway during the Reagan/Bush years, Congress lifted the restriction on pharmaceutical companies to advertise on television and radio. Since that time the Nation’s drug suppliers have spent amounts approaching (or exceeding) $200 billion on “direct to consumer” advertising of prescription drugs (Rx). In 2005 the annual outlay was $29.9 billion (see New England Journal of Medicine). I suspect the 2008 expenditure will greatly exceed that.
There has been little controversy to this practice, surfacing from time to time, but mostly there has been a passive acceptance. The affect of advertising is normally positive in a free market, even necessary, but it is also potentially insidious. We view advertising submissively, rarely thinking about it. Its very purpose is to create recall only at that the time of or decision to purchase.
The limited debate over Rx advertising has mostly focused on the effect advertising has had on the decision making of the doctor, to what extent does the motivated patient adversely sway the doctors decision making on which drug to use. I believe that debate is useless. It requires second guessing physicians and that cannot be determined in any practical way even if we intuitively know it’s true. The debate should be centered on the economics of Rx advertising, what is really happening and what the obvious consequences are.
Advertising by definition is targeted toward the consumer who might be interested in purchasing the product advertised, or to the individual who might influence the purchaser (such as advertising to small children). Rx falls loosely into that second category. The identity of the Rx consumer, however, is the first misnomer.
The patient is not the consumer when it comes to Rx, rather the purchaser is the physician. It is important to understand that the patient doesn’t buy Rx for himself, rather he/she buys it for the physician. Prior to the development of retail drug establishments, doctors disseminated Rx when the patient was seen and the patient would pay or reimburse the doctor as part of the overall cost of treatment, just as it’s currently often done in hospitals. As the number of Rx expanded it became impractical for doctors to maintain the inventory and so Drug Stores became a centralized point from which doctors could disperse medications.
Therefore, Rx advertising is directed toward individuals who can’t buy the product, any more than a three year old can buy that box of Cocoa Puffs she’s seen on TV. The difference is, of course, the Rx purchaser is an adult who actually thinks they are the one buying the Rx. At least the 3 year old intuitively knows their Cocoa Puffs are coming from mommy. I believe it is this fundamental misunderstanding by adult patients which maintained the restrictions of Rx advertising up to eleven years ago, and why most of the rest of the world still retains that restriction. However, it is far from the only reason why mass marketing in the form of television and radio advertising should be eliminated.
Cost of Health care and Prescription Drug Advertising: The cost of health care in the United States has reached the kind of insanity level that real estate values did in the second half of this decade (see http://www.pennyfound.blogspot.com/ article Healthcare…No Relief in Sight). The health care consumer must constantly be remembering that the cost of health care for him/her is revenue for someone else. There is a transfer of wealth in the US of over $1.7 Trillion annually (see current World Health Report). Over $30 billion of that amount goes to those involved with the marketing of Rx (advertisers, media, and the marketing overhead of the pharmaceutical companies). It matters not what health care plan our current or prospective political leaders espouse, none will work unless the cost of healthcare in the US is reversed. The billions spent on Rx advertising are perhaps the most wasteful dollars spent in our pending health care catastrophe as they do not directly benefit the healthcare recipient or the system generally. In fact, as implied above, there is no benefit, direct or indirect, to the patient.
Prescription Drug Advertising as a Disincentive for Drug Research: The argument frequently heard from drug companies is that the price of a drug is often very high due to the large investment that took place prior to the drug being released to the public. It is a good argument as those costs must be recovered, as well as the costs of research on failed drugs that ultimately are not released. However, once the drugs are released the revenues can be used for further research on new and improved Rx, but what happens? The Pharmaceutical Companies continue to invest in these drugs, in the billions of dollars, through mass marketing. Not only are those billions not being used for further research, but they drive up the cost. Further, with the Pharmaceutical Companies continuing to invest billions in a drug to make it more profitable, where is there incentive to develop new drugs that might not have the same profit margin or may even replace the highly marketed drug? It is simple human nature (and therefore business nature) that they will continue to support these marketed drugs rather than new ones due to the continued investment from which they have calculated an expected financial return. None of this equates to any benefit for the patient…past, present, or future.
Prescription Drug Advertising Adversely Impacting the Quality of Rx: As the Pharmaceutical Companies continue to invest in a prescription drug they become less likely to continue critical review of that drug, or maintain even a practical semblance of objectivity in any critical review. Again, why would they? Not only have they invested in the development of the drug, but after its release they continue that investment and now have projected levels of profits to defend. There is a further element, however.
With mass marketing the pharmaceutical companies have exposed themselves to more liability; both on a retail level which can affect shareholder equity, and on a tort level with possible injured parties. This has already been made obvious by several highly public drug failures such as with Vioxx and several statin drugs. The heavily marketed drug increases public awareness, which is what mass marketing is supposed to do. With that visibility, however, comes equally visible news worthiness should a drug fail. The declining affect on stock value for the owning pharmaceutical company can be huge. Further, the pharmaceutical companies know that a problem with a highly marketed drug could well disseminate to the public in such a way that a higher percentage of unaffected users may seek legal action against the company. In both those cases there is a built in incentive for the company to be defensive and disinclined to police the quality of the drug, in the legal world knowledge is poison. As an aside one should note those increased defensive costs are already factored in and increase the cost of the Rx, even as the company seeks to avoid them.
There are other less critical reasons why Rx advertising should once again be banned from radio and television.
The information regarding the prescription drug that is supposed to be provided with the advertisements is laughable and completely ignored by the FCC. It is the audible and visual equivalent of an 80 year old trying to read minuscule type on a label without glasses, she knows it’s there but it has no meaning. In fact, it is a practical impossibility, further strengthening the point that drugs are marketed to the wrong people.
Unregulated mass marketing of Rx forces pharmaceutical companies to compete in the practice, even if internally they might prefer to do otherwise.
We know the uninformed influence of the patient adversely affects the doctor’s best decision making, we only don’t know how much, and we never will. We also will never know to what extent mass Rx advertising contributes to defensive medicine, although it surely does, putting both the patient at some additional risk and driving up cost.
The last point I’d like to make, although certainly not the last of the negatives, is that these ads, television commercials particularly, are incredibly annoying and often the television equivalent of fingernails on a backboard. They are either a painful manipulation or an insult to our intelligence…and they are constant (not surprising for $30 billion being spent). I know that’s true for me, but when ever I’ve broached the topic the response I get is the same. Generally speaking, nobody likes them, even as they are manipulated by them.
Mass marketing of prescription drugs exists because, for the most part, it accomplishes what it seeks to do. It gets the patient to influence the consumer (the doctor) to buy the Rx thus increasing sales and profit. However, in a world where health care should be an available standard commodity to all people, like clean water, then prescription mass marketing takes us in the wrong direction. It is far from an answer to the overall health care problem, but its elimination would take us one step further in the direction we need to go, and at $30 billion a year it would be no small step.
There has been little controversy to this practice, surfacing from time to time, but mostly there has been a passive acceptance. The affect of advertising is normally positive in a free market, even necessary, but it is also potentially insidious. We view advertising submissively, rarely thinking about it. Its very purpose is to create recall only at that the time of or decision to purchase.
The limited debate over Rx advertising has mostly focused on the effect advertising has had on the decision making of the doctor, to what extent does the motivated patient adversely sway the doctors decision making on which drug to use. I believe that debate is useless. It requires second guessing physicians and that cannot be determined in any practical way even if we intuitively know it’s true. The debate should be centered on the economics of Rx advertising, what is really happening and what the obvious consequences are.
Advertising by definition is targeted toward the consumer who might be interested in purchasing the product advertised, or to the individual who might influence the purchaser (such as advertising to small children). Rx falls loosely into that second category. The identity of the Rx consumer, however, is the first misnomer.
The patient is not the consumer when it comes to Rx, rather the purchaser is the physician. It is important to understand that the patient doesn’t buy Rx for himself, rather he/she buys it for the physician. Prior to the development of retail drug establishments, doctors disseminated Rx when the patient was seen and the patient would pay or reimburse the doctor as part of the overall cost of treatment, just as it’s currently often done in hospitals. As the number of Rx expanded it became impractical for doctors to maintain the inventory and so Drug Stores became a centralized point from which doctors could disperse medications.
Therefore, Rx advertising is directed toward individuals who can’t buy the product, any more than a three year old can buy that box of Cocoa Puffs she’s seen on TV. The difference is, of course, the Rx purchaser is an adult who actually thinks they are the one buying the Rx. At least the 3 year old intuitively knows their Cocoa Puffs are coming from mommy. I believe it is this fundamental misunderstanding by adult patients which maintained the restrictions of Rx advertising up to eleven years ago, and why most of the rest of the world still retains that restriction. However, it is far from the only reason why mass marketing in the form of television and radio advertising should be eliminated.
Cost of Health care and Prescription Drug Advertising: The cost of health care in the United States has reached the kind of insanity level that real estate values did in the second half of this decade (see http://www.pennyfound.blogspot.com/ article Healthcare…No Relief in Sight). The health care consumer must constantly be remembering that the cost of health care for him/her is revenue for someone else. There is a transfer of wealth in the US of over $1.7 Trillion annually (see current World Health Report). Over $30 billion of that amount goes to those involved with the marketing of Rx (advertisers, media, and the marketing overhead of the pharmaceutical companies). It matters not what health care plan our current or prospective political leaders espouse, none will work unless the cost of healthcare in the US is reversed. The billions spent on Rx advertising are perhaps the most wasteful dollars spent in our pending health care catastrophe as they do not directly benefit the healthcare recipient or the system generally. In fact, as implied above, there is no benefit, direct or indirect, to the patient.
Prescription Drug Advertising as a Disincentive for Drug Research: The argument frequently heard from drug companies is that the price of a drug is often very high due to the large investment that took place prior to the drug being released to the public. It is a good argument as those costs must be recovered, as well as the costs of research on failed drugs that ultimately are not released. However, once the drugs are released the revenues can be used for further research on new and improved Rx, but what happens? The Pharmaceutical Companies continue to invest in these drugs, in the billions of dollars, through mass marketing. Not only are those billions not being used for further research, but they drive up the cost. Further, with the Pharmaceutical Companies continuing to invest billions in a drug to make it more profitable, where is there incentive to develop new drugs that might not have the same profit margin or may even replace the highly marketed drug? It is simple human nature (and therefore business nature) that they will continue to support these marketed drugs rather than new ones due to the continued investment from which they have calculated an expected financial return. None of this equates to any benefit for the patient…past, present, or future.
Prescription Drug Advertising Adversely Impacting the Quality of Rx: As the Pharmaceutical Companies continue to invest in a prescription drug they become less likely to continue critical review of that drug, or maintain even a practical semblance of objectivity in any critical review. Again, why would they? Not only have they invested in the development of the drug, but after its release they continue that investment and now have projected levels of profits to defend. There is a further element, however.
With mass marketing the pharmaceutical companies have exposed themselves to more liability; both on a retail level which can affect shareholder equity, and on a tort level with possible injured parties. This has already been made obvious by several highly public drug failures such as with Vioxx and several statin drugs. The heavily marketed drug increases public awareness, which is what mass marketing is supposed to do. With that visibility, however, comes equally visible news worthiness should a drug fail. The declining affect on stock value for the owning pharmaceutical company can be huge. Further, the pharmaceutical companies know that a problem with a highly marketed drug could well disseminate to the public in such a way that a higher percentage of unaffected users may seek legal action against the company. In both those cases there is a built in incentive for the company to be defensive and disinclined to police the quality of the drug, in the legal world knowledge is poison. As an aside one should note those increased defensive costs are already factored in and increase the cost of the Rx, even as the company seeks to avoid them.
There are other less critical reasons why Rx advertising should once again be banned from radio and television.
The information regarding the prescription drug that is supposed to be provided with the advertisements is laughable and completely ignored by the FCC. It is the audible and visual equivalent of an 80 year old trying to read minuscule type on a label without glasses, she knows it’s there but it has no meaning. In fact, it is a practical impossibility, further strengthening the point that drugs are marketed to the wrong people.
Unregulated mass marketing of Rx forces pharmaceutical companies to compete in the practice, even if internally they might prefer to do otherwise.
We know the uninformed influence of the patient adversely affects the doctor’s best decision making, we only don’t know how much, and we never will. We also will never know to what extent mass Rx advertising contributes to defensive medicine, although it surely does, putting both the patient at some additional risk and driving up cost.
The last point I’d like to make, although certainly not the last of the negatives, is that these ads, television commercials particularly, are incredibly annoying and often the television equivalent of fingernails on a backboard. They are either a painful manipulation or an insult to our intelligence…and they are constant (not surprising for $30 billion being spent). I know that’s true for me, but when ever I’ve broached the topic the response I get is the same. Generally speaking, nobody likes them, even as they are manipulated by them.
Mass marketing of prescription drugs exists because, for the most part, it accomplishes what it seeks to do. It gets the patient to influence the consumer (the doctor) to buy the Rx thus increasing sales and profit. However, in a world where health care should be an available standard commodity to all people, like clean water, then prescription mass marketing takes us in the wrong direction. It is far from an answer to the overall health care problem, but its elimination would take us one step further in the direction we need to go, and at $30 billion a year it would be no small step.
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