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US consumer ads “led to higher drug prices”

World News | November 26, 2009


Lynne Taylor

A new study suggesting that US direct-to-consumer advertising (DTCA) for a top-selling drug had no effect on prescribing rates but led to a major rise in the drug’s price needs to be followed up, say the authors.

Use of Bristol-Myers Squibb/Sanofi-Aventis’ blood-thinner Plavix (clopidogrel), which first appeared on the market in 1998, did not increase as a result of the consumer advertising campaign for it which began in 2001. However, a “sudden and sustained increase” in the drug’s price after the ads commenced cost 27 state Medicaid programmes an additional $207 million in pharmacy expenditures during 2001-2005, say researchers led by Dr Michael Law of the University of British Columbia in Vancouver, reporting their findings in the Archives of Internal Medicine this week.

The price of Plavix increased 12% immediately after the DTCA began in 2001, say the authors, who note that in order to recoup the “substantial” costs of DTCA – which totaled more than $350 million for Plavix during 2001-5 - drugmakers need to generate higher revenues through increased sales, higher prices or both.

“If drug price increases after DTCA initiation are common, there are important implications for payers and for policy makers in the United States and elsewhere. Future longitudinal studies should examine other drugs and settings because many other countries are currently considering whether to permit DTCA," the authors conclude. Currently, DTCA is permitted only in the USA and New Zealand.

In comments to Reuters, Dr Law added: “the public should rightly wonder why they’re paying millions in extra drug costs to pay for advertising campaigns that don’t work.”

US drugmakers’ spending for DTCA has increased more than 330% in the last 10 years, and in 2006 the US Government Accountability Office (GAO) reported that every $1 spent on DTCA generates an average $2 in sales. However, in September 2008, the first-ever controlled study into DTCA – whose authors included Dr Law - reported in the British Medical Journal (BMJ) that money spent on such advertising has no effect whatsoever.

Nevertheless, the control or abolition of DTCA has long been a popular target for Congress, and current proposals include House Energy and Commerce Committee chairman Henry Waxman’s call for the Food and Drug Administration (FDA) to have powers to ban such advertising for new drugs for up to three years after approval, and New York Representative Jerrold Nalder’s reintroduced Say No to Drug Ads Act, which would abolish tax exemptions for DTCA.

It is in the first few years of a new drug's life that manufacturers "often aggressively market their products and engage in DTCA," and this "increases the number of consumers exposed to safety risks of new products long before they are truly understood," Rep Waxman has said.

Around 30 million people, or about 16% of the US population, are enrolled in the 27 state Medicaid programmes – the federal health insurance programme for those on low incomes – used in the study.

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