Impact of advertising legislation on market behavior for the pharmaceutical industry

Keziah Discussion:

  The regulatory change has affected the market because it allows more brand awareness. TV and media outlets are far reaching and can promote the drug to a larger audience.  It also allows for direct-to-consumer advertising. Patients may now request medications that they have seen on TV.  According to the Food and Drug Administration (2015) these types of ads help engage patients in conversations with their providers and patient’s take an active role in their healthcare.  This conversation is very important.  DiStefano, et al. (2023), noted that pharmaceutical companies spent a larger amount of money on drugs that have a lower clinical benefit than those that had a greater clinical benefit.  Self-diagnosis based on what is seen in the advertisement can lead to misuse of medications as well as improper treatment for underlying health issues. Direct-to-consumer advertising can increase demand for the new and more expensive drug. The drugs that are more heavily marketed may lead to higher prices for consumers as well as the healthcare industry.  The Government Accountability Office (2021) noted that Medicare and the beneficiaries spent over $560 billion on drugs over a two-year period.

            Marketing relies on supply and demand.  Pharmaceutical companies can market to a broad audience and effectively increase the demand for their products.  The drugs advertised are ones that providers would not necessarily prescribe.  When a patient draws the provider’s attention, then the likelihood of the provider prescribing it is greater (DiStefano, 2023).  Since the country is based on economy, there is more “reward” for companies to promote products that can be sold opposed to the actual wellbeing of people.

DiStefano, M.J., Markell, J.M., Doherty, C.C., Alexander, G.C., Anderson, G.F. (2023) Association Between Drug Characteristics and Manufacturer Spending on Direct-to-Consumer Advertising.  JAMA.329(5). 386–392.          https://jamanetwork.com/journals/jama/fullarticle/2801060

FDA. (2015).  The impact of direct-to-consumer advertising. The Food and Drug Administration.  https://www.fda.gov/drugs/information-consumers-and-patients-drugs/impact-direct-consumer-advertising#:~:text=DTC%20ads%20help%20patients%20have,condition%20that%20the%20drug%20treated.

GAO. (2021).  Prescription drugs: Medicare spending on drugs with direct-to-consumer advertising. U.S. Government Accountability Office.  https://www.gao.gov/products/gao-21-380

Michele Discussion:

Hi Everyone, 

In 1997, the FDA initiated a revision of its regulations regarding broadcast advertising, permitting the inclusion of "adequate provision" of information concerning both the positive and negative aspects of drug effects. This was achieved by directing consumers to alternate information sources, such as toll-free telephone numbers or websites, as outlined by So and Kim in their 2022 study. This adjustment streamlined the process of pharmaceutical companies advertising on broadcast media, alleviating the need for comprehensive adverse effects listings within advertisements. Subsequently, there was a significant surge in spending on direct-to-consumer advertising (DTCA) (So & Kim, 2022).

Historically, drug advertisements were aimed primarily at medical professionals. However, in the past decade, a shift has been observed towards a pronounced emphasis on direct-to-consumer advertising (DTCA). DTCA involves the deliberate efforts of pharmaceutical companies to directly promote prescription drugs to the general public (So & Kim, 2022). This practice has raised concerns due to the intricate interplay of financial incentives, leading to ethical debates.

Research indicates that pharmaceutical companies allocate substantial resources to the research and development of medications, aiming to secure visibility for their products and generate returns on investment. However, in several instances, expenditures on advertising surpass those on research and development (So & Kim, 2022). Additionally, research suggests that while DTCA prompts consumers to seek further information, drug advertisements remain insufficient for patients to make fully informed decisions. Moreover, prescription drug ads can wield influence over prescribing decisions and patient care. A cross-sectional survey involving seventy-eight physicians revealed that prescriptions originating from DTCA-driven patient requests were notably less appropriate for similar patients compared to prescriptions not influenced by patient requests. While advertisements empower patients and enhance their confidence in discussions about medications, the rejection of a prescription request poses a challenge to the doctor-patient relationship (So & Kim, 2022).

Expenditure by pharmaceutical companies on direct-to-consumer advertising has experienced consistent growth, surpassing $5 billion in 2016, up from approximately $3 billion in 2012 and $1 billion in 1998 (Starc & Sinkinson, 2018).The disproportionate allocation of funds towards marketing drugs in comparison to surgical procedures or psychotherapy can be attributed to the perception that drugs offer a swift and uncomplicated solution to health concerns.

References 

So, B. K., & Kim, P. Y. (2022). Understanding Prescription Drug Advertising. PubMed; StatPearls

Publishing. https://www.ncbi.nlm.nih.gov/books/NBK574520/

Starc, A., & Sinkinson, M. (2018). Could Drug Ads have Positive Side Effects? | Econofact.

Econofact.org.https://econofact.org/could-drug-ads-have-positive-side-effects#:~:text=Drug%20ads%20are%20expensive%20and

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