Prescription Drug Advertising and Its Effect on Costs and Drug Usage

It happens all the time..  We sit down to relax and catch up on our favorite TV show or watch a sporting event, and most commercial breaks bombard us with ads for prescription medications.  “Ask your doctor if this new drug is right for you!”  This direct-to-consumer advertising is a phenomenon only in the United States and New Zealand.  Most other countries throughout the world forbid direct-to-consumer advertising.

The problem with this new drug is that it’s being marketed as “right for you” by the manufacturer and not a medical professionalThis new drug might be a costly name-brand specialty medication, which may not best fit your needs. Many times a less-expensive alternative available.

Roughly 20% of medical claims spent goes to pharmacy claims.  One out of four people who take prescription drugs report having trouble affording their treatment. Many studies point to the fact that direct-to-consumer advertising is inflating costs and utilization of those drugs. For those who have health insurance with a tiered copay plan, generic copays average $10, while preferred and non-preferred brand copays can average between $35-$70 per month.  Specialty medications are covered with a higher patient cost of $150 - $200 copay per month.

For those on HSA plans, the costs of prescriptions can be painful.  HSA plans require that you pay your full deductible before the plan covers any portion of the cost.  This can be a large expense especially if you take a specialty medication.  Some of the popular brand-name/specialty medication like the ones that treat diabetes, rheumatoid arthritis, and Crohn’s disease are the most expensive, and can cost up to $8,000 per month.  These type of prescriptions are widely prescribed and happen to be some of the most frequently advertised on television.

Drug companies spent more than $6 billion in 2017 alone on medication advertising, hoping that consumers will ask their doctors about this new drug. Studies show the companies can receive up to a 4 to 1 return on their investment, and 27% of consumers discussed conditions with their doctors that they had previously not mentioned.  Clearly advertising works!  The billion dollar question is, will the United States ever ban this practice? If you want .to stay up to date on topics like this, subscribe to our newsletter today.