Pharmaceutical Advertising Increased Prescription Drug Utilization, Study Reports

November 30, 2015

Relaxed direct-to-consumer advertising restrictions for drugs by the FDA in 1997 has precipitated an increase in prescription drug utilization, not just among Medicare enrollees, but also among non-elderly users.

Relaxed direct-to-consumer advertising (DTCA) restrictions for drugs by the FDA in 1997 has precipitated an increase in prescription drug utilization, not just among Medicare enrollees—known to watch an average of over 40 hours of television (where most advertising occurs) weekly—but also among non-elderly users. A National Bureau of Economic Research working paper now has data showing DTCA increased prescription drug utilization among non-elderly users in areas with a high concentration of Medicare beneficiaries, compared with a low concentration.

The authors examined spending in 5 therapeutic categories: depression, diabetes, hyperlipidemia, hypertension, and osteoporosis and the causal pathways utilized by DTCA to boost drug utilization. The variables studied were geographic areas with high versus low concentration of Medicare beneficiaries. The study found a significant increase in television advertising exposure, following introduction of Medicare Part D (prescription drug coverage) in areas that had a dense elderly population. The authors wondered whether this increased volume of advertising, meant for the elderly, would have a spillover effect on the non-elderly population living in those regions, who are not eligible for Medicare coverage but would impact drug utilization.

The authors gathered data from Nielsen ratings in local media markets for the elderly (over 65 years) and non-elderly, in addition to pharmacy claims data from 40 large national employers. The study found a 6% rise in the average number of prescription purchase by non-elderly in areas with a high concentration of elderly, compared with areas with a low density of elderly. Importantly, this increase mirrored the time when the Part D prescription drug program was introduced by Medicare in 2006 and the trend held till the end of the study period in 2010, the authors write. Per the analysis, a 10% increase in advertising views resulted in a 5.4% increase in total prescriptions filled for advertised chronic drugs. This surge had a spillover effect; other drugs that belonged to the same class as the advertised drug saw an increase in utilization. Advertising also improved adherence, the study found—a 10% increase in advertising increased adherence to a therapy by 1% to 2.5%.

The study found little effect of out-of-pocket (OOP) costs and direct-to-physician advertising on this increased utilization.

In terms of the overall economic impact, the authors claim that a 10% increase in advertising exposure generated a change in prescription drug utilization equal to 9% to 27% reduction in OOP price. Additionally, increasing insurance coverage for one population (Medicare Part D in this case), they write, generated additional demand for individuals outside of Medicare.

The American Medical Association, meanwhile, has called for an advertising ban with concerns that DTCA of prescription drugs, such as in oncology, is driving demand for expensive treatments that may not be clinically effective and might have less expensive alternatives.