IPI Publication Press Release
IPI Policy Report - # 155
Related Publication Title:
Who’s Afraid of Pharmaceutical Advertising?
Released by Sonia Hoffman on 06/11/2001
IPI Policy Report - # 155
Related Publication Title:
Who’s Afraid of Pharmaceutical Advertising?
Released by Sonia Hoffman on 06/11/2001
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For Release: Monday, June 011, 2001
For more information: Sonia Hoffman
(888) 557-4474 or shoffman@ipi.org
Dallas, TX: Increasingly, drug companies are advertising their products directly to the consumer rather than just to doctors. Critics are afraid that direct-to-consumer (DTC) advertising – which increased from $55 million in 1991 to $1.8 billion in 1999 – increases costs, misinforms consumers, and encourages overconsumption. But is that the case?
Not really. According to “Who’s Afraid of Pharmaceutical Advertising?” by Dr. Merrill Matthews Jr., and new report from the Institute for Policy Innovation (IPI), there is no reason to fear pharmaceutical advertising. What we should fear is the people who want to control it.
Increased Costs? It’s not advertising that increases the costs of drugs, it’s the lack of it. DTC advertising creates a competitive market which forces drug companies to keep prices lower than they otherwise would in order to gain market share.
For the pharmaceutical industry, the annual growth in marketing dollars has remained relatively consistent, despite the recent influx of DTC ads. What’s changing is the focus of marketing dollars: from doctors to patients, as the health care industry transitions from a doctor-directed system to a patient-directed one.
“DTC advertising isn’t the cause of this transition,” says Dr. Matthews, “it’s a result of it. Anyone who understands the Wal-Mart model knows that advertising in a competitive market lowers prices, not raises them.”
Misinformed Consumers? DTC pharmaceutical advertising presupposes that health care consumers can make choices for themselves. The fact that pharmaceutical companies continue to increase DTC advertising expenditures shows that patients want to collaborate with physicians to make decisions based on the latest and most accurate information. Physicians also have made it known that they appreciate patient input into the decision-making process.
Overconsumption? It’s true that DTC advertising does encourage more drug consumption – which in the long run can lower some health care costs for individual patients when drug therapy precludes the need for other, more expensive therapies.
Government Regulation? The U.S. Congress and state legislatures nationwide recognize that a transition is underway, but they aren’t sure how to respond. Some legislators want to regulate not just the quality and safety of prescription drugs, but the way in which manufacturers market those drugs. Such regulation would be a catastrophe. If politicians and health policy experts want to ensure that more drugs are available at lower prices, then they should consider policies that encourage advertising and competition.
Continues Dr. Matthews: “Competition and DTC advertising – not government regulation – creates the best possible environment in which consumers can take responsibility for their own health care. Informed patients don’t undermine the doctor-patient relationship, they enhance it.”
This information is abstracted from a new report by the Institute for Policy Innovation entitled “Who’s Afraid of Pharmaceutical Advertising?” by Merrill Matthews, Ph.D. For additional information, visit www.ipi.org or call Sonia Hoffman at (972) 874-5139. The author is available for interview.
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