Direct-to-Consumer Advertising

Posted on Monday, June 10, 2019

Everyone knows the impact of effective advertising. A colorful magazine ad can make readers' mouths water for tempting food. An engaging television spot can make viewers' hearts yearn for a getaway vacation. Successful advertising not only conveys product information, it can make the consumer want the advertised item.

With prescription drugs, advertising directly to consumers is a relatively new marketing tool. Traditionally, pharmaceutical firms promoted their products to physicians. They accomplished this by sending 

Direct-to-consumer advertising is concentrated in a few brands, according to the Harvard/Sloan research. The top products include: 

Vioxx (anti-inflammatory),
Paxil (antidepressant),
Zocor (cholesterol-lowering),
Viagra (erectile dysfunction).

company representatives to visit physicians' offices and hospitals, distributing free product samples, and advertising in medical journals. Although doctors remain the primary focus of prescription drug marketing efforts, pharmaceutical firms began increasing their spending on direct-to-consumer advertising in the mid-1990s.

A study by researchers at the Harvard School of Public Health, Harvard Medical School, and Sloan School of Management at MIT found that consumer advertising increased three-fold between 1996 and 2000. Television ads increased seven-fold. Furthermore, according to a paper by the Kaiser Family Foundation, more than 90 percent of those surveyed report seeing prescription drug advertisements.

Advocates argue that consumers become better informed and take a more active role in their health care because of prescription drug advertising. Critics say advertising encourages the use of expensive and perhaps unnecessary drugs, and wastes the time of physicians as patients inquire about the products they've seen. With prescription drug costs increasing at double-digit rates, the issue of direct-to-consumer advertising bears examining.

Survey Results

According to a survey, direct-to-consumer advertising encourages many patients to ask their doctors about medical conditions and illnesses that they had not previously discussed, according to Janet Woodcock, director of the FDA's Center for Drug Evaluation and Research. 
 
The survey of U.S. doctors also yielded these findings:

Approximately 75 percent believe that ads directed at consumers cause patients to place unwarranted faith in a particular drug.
28 percent feel some degree of pressure to prescribe the brand name drug when asked by the patient to do so.

The Kaiser study mentioned above reports similar data: 

30 percent of consumers surveyed say they talk with a doctor about a specific drug after seeing an ad.
13 percent say their doctors prescribe the drugs they ask about.

Many physicians in the FDA survey feel direct-to-consumer advertising can aid in patient care, but they have to provide additional information to patients beyond what is given in the ads. This observation has led some to call for more stringent oversight by the FDA of direct-to-consumer drug advertising.

Congress has discussed legislation to force manufacturers to provide more balanced information about drugs in advertising, but passage is uncertain at this time.

In the meantime, employers and health plans can combat the effects of incomplete information in advertisements. For example, communications from employer health plans can be used to explain effective alternatives such as generic equivalents to advertised drugs. Arming employees with this type of information can go a long way toward ensuring that doctors prescribe medications appropriately.

Posted in Tax Topics For Individuals

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.