Drug ads drive up drug spending

Pharmaceutical companies spent about $18 billion on advertising during those three years, an average of $32 million for each drug. The vast majority of that spending was on expensive, brand-name drugs. About $12 billion was directed toward 39 prescription drugs, 19 of which were new to the market.

Advertising is just one of several tools that the pharmaceutical industry deploys to drive up drug spending. Pharmaceutical companies also raise prices on their drugs, enlist doctors to prescribe their drugs and offer promotions for use of their drugs.

Senate Judiciary Committee members were incensed by the GAO report’s findings. Republican Charles Grassley of Iowa and Democrat Dick Durban of Illinois both believe that these ads drive up Medicare’s costs. They are not about appropriately educating the public or there would be a lot more generic drug ads. But, Congress has done nothing to prevent prescription drug advertising to consumers, which was against the law 25 years ago.

To be clear, even the incensed lawmakers have no intention of making drug advertising illegal. Their solution is for pharmaceutical companies to list the price of the drugs they advertise, a Trump administration proposal that seems senseless. There is no set price for a drug in the US. And, most people don’t pay the list price, just the copay.

New Zealand is the only other nation that permits drug advertising. Every other country bans advertising and for good reason. Drug ads lead people to ask their doctors for drugs that are of no benefit to them. Of course, doctors have the power to say no when asked, but they don’t generally exercise it. That’s a whole other issue.

Here’s more from Just Care:

• How GoodRx profits by lowering people’s drug costs
• A small group of drugs make up most of Medicare drug costs
• The deadly consequences of out-of-pocket drug costs
• Six tips for keeping your drug costs down if you have Medicare
• Drug costs: A big chunk of your insurance premium