Drug ads: $5.2 billion annually -- and rising
The biggest game at this year's Super Bowl didn't take place on the field. It was played out during the commercial breaks when three pharmaceutical commercials took to the air.
But those costly TV spots -- for issues including irritable bowel syndrome and toenail fungus -- represented just a fraction of the $5.2 billion in annual advertising spending from the drug industry. With that figure jumping 60 percent during just the last four years, critics are increasingly asking how the boom in pharmaceutical ads may be affecting consumers and the costs they pay for medication.
The issue is also attracting attention from lawmakers and health professionals. In November, the American Medical Association took the unusual step of calling for a ban on pharmaceutical ads. The reason? Doctors believe the surge in drug ads is prompting consumers to demand expensive medications they might not need.
Senator Al Franken (D-Minnesota) has introduced a bill called the Protecting Americans from Drug Marketing Act, which would end a tax break that drugmakers can get for advertising. (Businesses of all kinds can deduct their advertising as a business expense, so drugmakers aren't currently getting a special break on that end.)
The debate over pharmaceutical advertising comes at a time when Americans are spending more than ever on prescription medication. About 20 brand-name prescription drugs have at least quadrupled their prices since 2014, while another 60 medications have doubled in the same time.
Drugmakers including Pfizer (PFE) and Allergan (AGN) hiked prices in January, boosting some list prices by as much as 42.3 percent. Of course, the most infamous of all came last year, when pharmaceutical CEO Martin Shkreli raised the price of a six-decade-old drug from $13.50 to $750. He claimed he needed to boost the price to bring in new revenue for drug development.
Yet nine out of 10 of the biggest pharmaceutical companies actually spend more on advertising than on R&D, according to The Washington Post. Sixteen drugs accounted for more than $100 million each in spending last year, with the most advertised drug being arthritis treatment Humira, at $357 million, according to the health news site Stat.
Among the most-advertised drug is Jublia, one of the medications that bought time in the 2016 Super Bowl. The toe-fungus treatment costs about $600 a bottle but is proven to work in fewer than 20 percent of users, according to Consumer Reports.
The pharmaceutical industry's defense is that advertising has a benefit for consumers by helping them become more informed about medications.
Criticisms about direct-to-consumer "advertising are being driven by the false notion that DTC plays a direct role in the cost of new medicines and ignores the positive impact of health care communications," a spokeswoman for the industry trade group Pharmaceutical Research and Manufacturers of America told CBS MoneyWatch. Ads "provide scientifically accurate information to help patients better understand their health care and treatment options."
That may be true, but the U.S. and New Zealand are the only two countries that allow pharmaceutical companies to market directly to consumers. Unfortunately for Americans, that doesn't appear to be helping health outcomes or spending. The U.S. spends more of its GDP on health care than 12 other developed countries.
It may be no coincidence that citizens of only two countries take more than two prescription medications a day: The U.S. and New Zealand.
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