- According to JAMA “annual health care marketing surged from $17.7 billion in 1997 to at least $29.9 billion in 2016, driven by a rapid spike in spending on direct-to-consumer (DTC) advertisements for prescription drugs. Over this period, DTC spending climbed from $2.1 billion to $9.6 billion.
- The most rapid increase was in direct-to-consumer (DTC) advertising, which increased from $2.1 billion (11.9%) of total spending in 1997 to $9.6 billion (32.0%) of total spending in 2016. DTC prescription drug advertising increased from $1.3 billion (79 000 ads) to $6 billion (4.6 million ads [including 663 000 TV commercials]), with a shift toward advertising high-cost biologics and cancer immunotherapies.
- Despite this, data even if all prescription drugs were free healthcare costs would still be increasing.
The media loves to glorify headlines like “U.S. health care industry spends $30 billion a year on marketing” but while this headline is accurate without context and ,in an era when people scan headlines, this data is inaccurate. Here’s why..
1ne: Price increases in on/off line media are not represented.
2wo: It includes the “golden age of DTC” when drugs like Lipitor were advertised everywhere. (Remember all the ads for allergy medications which are now OTC?)
3hree: It includes expenses that are not directly marketing such as the costs to maintain a salesforce (cars, salaries, hotels).
4our: It doesn’t measure the beneficial effects of DTC ads on the public.
5ive: It includes DTC spending on advertising for laboratory tests (such as genetic testing), hospital advertising and ads for physicians.
6ix: It includes product samples which directly benefit patients who may not be able to afford medications.
Now the purpose of such “dramatic” headlines is to essentially say to people “this is one reason why your drug costs are so high” and to get them infuriated. Many will quote the headline, but few will actually take a deep dive into the data for an explanation.
Let me reiterate an assumption that 90% of people have wrong: people don’t see a DTC commercial and run off to their doctor to say “I want this”. In face DTC TV ads have become less effective over time with only 7% of patients requesting an advertised drug.
What IS happening is that in today’s healthcare environment is that DTC ads are informing and educating people who, in turn, go online to research advertised drugs and health conditions. They have to because today physicians treat conditions not people.
Even if ALL prescription drugs were free in the U.S. our health care costs would still be rising rapidly. It’s estimated that 40% of all cancers are preventable and Millennials are on track to be the most obese generation in history, which in turn is going to lead to chronic health issues.
Then there are rising hospital costs. Vox reviewed five patient bills from the hospital’s emergency room, in consultation with medical billing experts, and found that the hospital’s billing can cost privately insured patients tens of thousands of dollars for care that would likely cost them significantly less at other hospitals.
Research shows that about one in five emergency room patients ends up with a surprise medical bill from an out-of-network doctor working at their in-network hospital. If you have a medical emergency and need attention the last thing you need is ask those HCP’s treating you if they are in your network.
If you really are concerned about our healthcare costs a good article to read would be “US health care is an ongoing miserable failure”. It doesn’t really get into how our own unhealthy lifestyles are literally killing us, but it’s a good read.
Drug prices still only represent ten cents of every health care dollar spent and while I cannot excuse some companies for raising prices on essential drugs like insulin continuing to point the finger at drug companies is just piling on the wave of anger.
Originally published at worldofdtcmarketing.com on January 9, 2019.