Study finds manufacturers spend more to advertise less beneficial drugs

A recent study published in the Journal of the American Medical Association (JAMA) found that drugmakers spent more money marketing drugs with lower added benefit in 2020, and the amount of direct-to-consumer (DTC) advertising spending rose with increased drug sales.

The topic of DTC advertising for prescription drugs is controversial – only the US and New Zealand allow the practice. Proponents say that such advertisements can inform patients of the pharmaceutical options available to them, while opponents say the practice can influence patients to request drugs that may or may not be appropriate and can lead to the overprescribing of pricy medications.

In a study published on 6 February, Michael DiStefano, of the department of health policy and management at the Johns Hopkins Bloomberg School of Public Health, and colleagues, reviewed the 150 top-selling drugs in the US in 2020, and found that manufacturers spent more money on DTC advertising for drugs that had lower added benefit. Added clinical benefit was determined based on ratings from health technology assessment (HTA) bodies in France and Canada.

“In this exploratory cross-sectional study … a higher proportion of promotional spending allocated to direct-to-consumer advertising was associated with drugs rated as having lower added clinical benefit than for those having higher added clinical benefit (absolute 14.3% increase in proportion) and with total drug sales (absolute 1.5% increase in proportion for every 10% increase in sales),” DiStefano and colleagues wrote.

The authors note that this could be because DTC advertising may lead more patients to ask physicians for the advertised medication, which may indicate manufacturers are using a strategy to allocate a larger share of their advertising budget to sell drugs that physicians are less likely to prescribe. They suggested that that drugs with less added benefit “may also be more likely to have lower cost alternatives, be part of a step-therapy regimen, or have unfavorable formulary placement.”

Amanda Starc, of the Kellogg School of Management at Northwestern University, wrote an accompanying editorial to the study. In it, she laid out the history of DTC advertising and noted that the American Medical Association has called for banning the practice since 2015.

Starc referenced research that makes the case for and against DTC prescription drug advertising, including a 2021 study by Grennan et al, which found that drugmakers tend to target highly responsive physicians with detailing and advertising directly to consumers is not deployed equally for all drugs.

“The conceptual and empirical arguments herein suggest that the advertising strategy will be more common in drug classes for which it is likely to have a larger impact,” Starc said. “It is then perhaps disconcerting that direct-to-consumer advertising is more common for drugs with low added clinical benefit. However, it is also perhaps not surprising.”

She added that drugs with lower added benefits may be more likely to face competition within that drug class, which may explain why manufacturers rely on DTC advertising to help their products stand out.

Starc pointed to several studies that argue DTC advertising is good for patients as well and brings efficiencies to the healthcare system.

“The level of direct-to-consumer advertising might also be low for drug categories with uninsured or underinsured patients; Alpert et al found that the expansion of insurance under Medicare Part D increased advertising,” she noted. “An expansion of direct-to-consumer advertising might mitigate existing disparities.”

Starc said the accompanying study by DiStefano et al is a valuable step to understanding market incentives and improving policy outcomes.

“Their findings can be placed in the context of a large empirical literature attempting to measure the impact of drug promotion,” she said. “Promotional activities—and direct-to-consumer advertising
in particular—do not have universally negative effects on physicians and patients.”

“On the contrary, the literature suggests it causally increases the patient-physician interaction,
increases use of valuable drugs, improves adherence, and increases productivity,” she added. “Future work should explore heterogeneity across drug classes, patients, and physicians.”

Study finds manufacturers spend more to advertise less beneficial drugs

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