Drugs - Prescription Drug Advertising

If you thumb through nearly any magazine, browse the daily newspaper, or relax in front of the TV you are bound to run across an ad for the latest prescription drug to battle everything from allergies to high cholesterol to depression. As the graphic shows, both overall prescription drug promotion and direct-to-consumer advertising²⁰ expenditures increased during this time period: 70.7% and 211.9%, respectively. The drug industry's marketing staff increased just as dramatically. In 1996, there were a total of 60,539 marketing professionals working in the drug industry. By 2000, this number rose to 87,810.

In 1993, 39% of us said that we had seen at least one prescription drug ad. By 2000, 91% of us said this. This may have something to do with the newly found popularity of television advertising. In 1994, a mere $36 million (13.5% of all direct-to-consumer advertising) was spent on TV ads. By 2000, spending for this type of advertising reached nearly $1.6 billion, or 63.6% of all direct-to-consumer advertising.

But, is this an outrageous amount? Some critics of the drug industry point to the 4,258% increase in overall advertising expenditures from 1994 to 2000 as one of the reasons for rising prescription drug prices. But, is the amount spent on prescription drug advertising outrageous? The next table compares the amount spent on advertising for some prescription drugs with the amount spent on advertising other products. The number in parentheses represents the ranking of the drug in terms of direct-to-consumer advertising expenditures. The advertising budget allocated to promote a single drug in many cases exceeds the total ad budget for an entire large company.

Amount of Advertising Expenditures on Prescription Drugs vs. The Advertising Budgets of Companies in Other Industries, 2000

Product	$ million
Vioxx (1) ad budget	160
Dell Computer's ad budget for its top brands	160
Budweiser's total ad budget	146
PepsiCo's ad budget for Pepsi	125
Zocor (5) ad budget	91
Nike's total ad budget	78
Meridia (10) ad budget	65
Campbell's total ad budget	58

But, does a high advertising budget translate into higher prices for the drug? If we look at two anti-inflammatory drugs, Vioxx and Celebrex, there does seem to be a connection. A month's supply of Vioxx at its lowest dosage ranges from $73.29 to $80.99. Celebrex ranges from $42.48 to $47.79 for a month's supply of its lowest dosage tablets.²¹ The amount spent on direct-to-consumer advertising in 2000 for Celebrex was $78.8 million, $82 million less than Vioxx. A comparison of prices and advertising budgets of the leading prescription antihistamines, Claritin and Allegra, yields the same results. Whether this is true for all advertised prescription drugs and their counterparts requires further study, however — there are nearly 9,600 prescription drugs on the market.

But, does most of the money spent on prescription drugs go towards advertising? Or does more of it go for research and development? The next panel will examine just where our money goes when we buy a prescription drug.

Sources: National Institute for Health Care Management. Prescription Drug Expenditures in 2001: Another Year of Escalating Costs, May 6, 2002. Retrieved July 17, 2002 from http://www.nihcm.org. National Institute For Health Care Management. Prescription Drugs and Mass Media Advertising, 2000, November 2001. Retrieved July 26, 2002 from http://www.nihcm.org. Larry Levitt. The Henry J. Kaiser Family Foundation. Prescription Drug Trends, November 2001. Alan Sager and Deborah Socolar. Boston University School of Public Health. "Drug Industry Marketing Staff Soars While Research Staff Stagnates." Drug Data Brief, December 6, 2001. Retrieved July 29, 2002 from http://rxpolicy.com/studies/bu-rypromotion-v-randd.pdf. Prescription prices retrieved July 29, 2002 from http://www.drugstore.com, http://www.cvs.com, and http://www.eckerd.com.