Direct-to-consumer drug advertising spikes demand

 
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“Feeling down?” “Having a hard time getting up in the morning?” The appeals come directly from the TV to you, the consumer, promising pharmaceutical cures for a variety of ailments.

But the advertising landscape wasn’t always this way. In fact, for most of the world, it still isn’t. The United States and New Zealand are the only two countries that allow such ads. And until 1997, the practice didn’t occur stateside — Food and Drug Administration (FDA) regulations dating back to 1969 stipulated that pharmaceutical advertising must present a “fair balance” of both the risks and benefits of the drug and mention every risk associated with the product. Broadcast commercials would have been cumbersome, so ads were generally limited to print.

In 1997, however, the FDA modified these requirements, paving the way for broadcast direct-to-consumer (DTC) advertising. Ads no longer needed to list all risks; instead, companies had to describe only “major risks” and provide opportunities for interested consumers to learn more about the drug through the phone, internet, medical professionals or printed material.

Did the loosening of advertising standards produce well-informed consumers, or did it simply send people to their doctors requesting drugs on the basis of catchy ads? Over 20 years have elapsed since these new guidelines took effect, and in this time researchers have looked into how DTC ads have changed consumer behavior around pharmaceuticals.

Increased demand

A working paper from the Federal Trade Commission published in 2016 looked at the relationship between DTC advertising and online search frequency. Authors Matthew Chesnes and Ginger Zhe Jin found that advertising a particular drug increased the frequency of search for that drug along with other, similar drugs. The effects of advertising varied by media type, with broadcast and internet having the strongest associations with increased searches.

Direct-to-consumer advertising also has been linked with increased demand for specific pharmaceuticals. One paper published in the Journal of the American Medical Association in 2017 found that exposure to ads about testosterone was linked to increases in testosterone testing and initiation of testosterone treatment (including prescription of gels and patches and delivery of in-office injections and implants). Similar effects were found for asthma medication sales, antidepressant use, prescriptions for a drug used for smoking cessation and contraceptives. In fact, in 2015, the American Medical Association called for a ban on DTC advertising, listing concerns about increased demand for new and expensive drugs that might not be necessary or more effective than alternatives.

DTC ads have been linked with astronomical increases in drug expenditures. Prescription drugs made up 10 percent of health spending in 2016 at $329 billion; in 1995, by comparison, this category took up 6.3 percent of health expenditures at almost $56 billion, according to the Centers for Medicare and Medicaid Services. One working paper, published by the National Bureau of Economic Research in 2010, indicates that DTC pharmaceutical advertising could account for 19 percent of the growth in drug expenditures between 1995 and 2007. The authors write that most of this growth is driven by an increase in demand.

What does this mean for the drug manufacturers’ bottom line? A working paper published by the NBER in 2015 found that a 10 percent increase in a manufacturer’s ads led to a 0.76 percent increase in revenue. A 10 percent increase in rival advertising undercuts the manufacturer’s revenue by 0.55 percent. The researchers also ran simulations that indicated that a ban on DTC advertising “would have modest effects on the sales of advertised drugs as well as non-advertised drugs.”

Pros and cons

A few reviews on the subject of DTC advertising weigh the risks and benefits of the practice. A 2010 study published in Health Policy and Ethics looks at a number of claims made by supporters and opponents, from improving quality of care to promoting overdiagnosis, and concludes with its own recommendations on DTC advertising, such as providing additional information in ads to help consumers identify whether the medication is indicated for them and offering more specific and less “emotion-driven” portrayals of drugs’ effects.

A study published in the Annual Review of Public Health in 2012 built on a 2005 review that found DTC advertising was linked with increased prescriptions and demand but did not have effects on health or costs. This later review identified nine additional studies with similar findings, including that DTC ads were linked with increased prescribing and sustained sales for drugs, despite price increases. Author Barbara Mintzes indicates the evidence in favor of DTC advertising is sparse: “No evidence from controlled trials or observational studies shows that DTCA improves adherence, allows patients to obtain needed care at an earlier stage, reduces stigma, or provides accurate education, despite frequent claimed effects.”

Further research on the topic of adherence includes a 2015 study published in Applied Economics that found that DTC advertising of drugs used to treat high cholesterol are associated with a negative effect on adherence to the treatment regimen. The researchers suggest that this might be attributable to the fact that ads motivate less compliant people to initiate treatment. Another study of the effects of DTC ad exposure and adherence among individuals with serious mental disorders had similar findings.

A study published in BMJ Open in 2017 indicates that “at-risk” individuals living in New Zealand might be more vulnerable to these ads. Some pharmaceutical companies are beginning to recognize opportunities in untapped markets, targeting Latinos with Spanish-language content that attempts to mirror the values and beliefs of these consumers.

Despite criticism, some research indicates that DTC advertising might be associated with societal benefits. Looking at antidepressant advertising in a March 2018 working paper, Bradley Shapiro at the University of Chicago found that ads had no effect on the prices or co-pays of antidepressants and positive effects on labor supply, with a decrease in missed days of work, particularly among workers who generally had more absences.

Past, present, future

Though broadcast DTC advertising of pharmaceuticals is still relatively new, there’s a long history of these ads in print. An article published in 2010 in the American Journal of Public Health offers a look back at the ads over the course of the 20th century and associated regulatory challenges.

Take compliance, for example. A study published in May 2018 in the Journal of General Internal Medicine assessed all the English-language broadcast prescription drug ads that ran from January 2015 to July 2016. Researchers compared the content of these ads to the FDA guidelines in place, particularly the requirements that prohibit false claims and require “fair balance” in stating both risks and benefits. Of the 97 ads studied, few were fully compliant: “Data were rarely provided to support benefit claims, the risks were never quantified, and off-label promotion occurred.” Further, all the ads presented risk information alongside “distracting visuals.” Research in the International Journal of Advertising has found that such visuals, like happy faces, impair understanding of health warnings during DTC commercials.

There’s another vast new frontier to watch for regulatory battles over compliance, too. As digital and social media increase in ubiquity, DTC pharmaceutical ads have proliferated on these platforms and research has shifted its focus to match, producing scholarly content analyses of digital ads, social media content and warning letters issued by the FDA over online ads. A study published in 2015 in BMC Health Services Research found that internet-based direct-to-consumer advertising increased 109 percent between 2005 to 2009, while most other media experienced declines in ad expenditures. So if your phone’s got you down, it might also have an ad for that.

 

For more research, the FDA has an Office of Prescription Drug Promotion Research with reports on a number of related topics, including web and mobile content analyses and a survey of physicians’ attitudes toward DTC advertising. We’ve also written research roundups on direct-to-consumer genetic testing and a downstream effect of increased pharmaceutical consumption: drugs in the water.

Last updated: May 2, 2018

 

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