By Kyra Hagan, SVP, Marketing and Communications, RxBenefits
Are premier TV events causing a spike in prescription drug spending in the U.S.?
Millions of Americans tune into blockbuster events like the Oscar Awards, March Madness, and the Super Bowl, and in many cases, the ads are as much the draw as the program itself.
But consider this.
In 2024, drugmakers were the single largest spenders when it came to TV ads – projected to have spent $4.5 billion. In fact, in 2024, AbbVie spent nearly $377 million – the most of any manufacturer – on its immunology drug Skyrizi – approved for moderate to severe psoriasis in addition to ulcerative colitis and Crohn’s disease – alone.
Here’s another jaw-dropping fact – and one that should worry anyone concerned about the trajectory of prescription drug cost and spending in the country. Just under 20 million people watched the Oscars this year. And those who did were 477% more likely to see pharma ads than during regular prime-time programming. That is just another example of how inescapable direct-to-consumer (DTC) advertising for prescription drugs has become in the U.S. The top 10 pharmaceutical companies spent nearly $14 billion on all kinds of advertising including TV in 2023 according to a new report from the Campaign for Sustainable Rx Pricing, of which $4 billion were spend on just the top 10 most advertised drugs.
With so much screen time – and money – devoted to “selling” expensive new brand-name drugs what are the ramifications on consumer behavior – and healthcare costs?
The potential health and cost impacts of DTC advertising may be why a vast majority of countries – other than the U.S. and New Zealand – don’t allow it.
A slippery slope?
The U.S. Food and Drug Administration (FDA), which regulates the safety of prescription drugs, does not review pharma ads. While potential side effects and health risks must legally be communicated in ads, details are usually lost in a jumble of voiceovers or hard-to-view fine print.
Keep in mind that prescription drugs are not the same as cars, beer, coffee, or doughnuts. They are not meant to be a lifestyle product or a lifestyle enhancement. They are meant to treat serious – often life-threatening – diseases and improve health outcomes. That’s why our prescription drug development is closely regulated, and manufacturers have to put their products through rigorous testing and have them formally reviewed and approved by the appropriate agencies to ensure efficacy. Even the exact dose, administration method, and target patient population has to be specifically reviewed and approved.
So why is DTC advertising of prescription drugs once approved, not scrutinized in any way – particularly when we are seeing so-called “lifestyle drugs” coming to market with extremely high price tags, and with the risks of off-label use and adverse events associated with inappropriate use?
There has been ongoing discussion – including from the Trump administration – and repeated attempts at banning DTC advertising. But reality is that Americans likely will have a hard time avoiding them for the foreseeable future. By one estimate, the average TV viewer sees as many as nine such ads daily, up to about 16 hours per year – far more time than most people spend with their primary care physician or pharmacist in a year. That is why the role of first-line care providers in providing oversight and helping patients understand the potential risks and ramifications of asking for a specific drug based on a TV ad is more critical than ever.
Consider these three key impacts of DTC advertising:
1. DTC advertising puts pressure on physicians
Research shows that when patients see TV ads for prescription drugs – particularly those that they see several times – they tend to ask their doctors for a prescription for that medication. According to a recent report, 30% of Americans are prompted to talk with their doctors about medications they have seen advertised. That either strains the doctor-patient relationship around prescription decisions or leads to the provider writing what might be a non medically-necessary prescription. The same report showed that, in fact, 53% of the time, when a patient requests a specific drug, they end up with a prescription for it.
2. DTC advertising fuels demand for expensive treatments
The purported intent of DTC advertising is to raise awareness for people with a certain condition that they may have treatment options available. In reality, what they are doing is fueling demand for high-cost drugs that may not be medically necessary, or for which lower-cost alternatives may already be available.
Research published in JAMA found that higher DTC advertising spending is frequently linked to lower clinical benefits, with a 1.5% increase driving a 10% rise in sales regardless of the drug’s efficacy. Not only that, a Journal of the American Medical Association study that Time magazine reported on showed that higher promotional spending was often linked to lower added clinical benefit.
3. DTC advertising drives costs
Patients rarely cover the full cost of a prescription themselves. Instead, they have an out-of-pocket cost-share that is capped at a maximum amount and third parties – usually an employer or Medicare – cover the rest. This distinction matters. Prescription drug spending rose nearly 10% in 2023 and is expected to soar another 8% this year. In fact, 8 out of the 10 most advertised drugs raised prices in January 2024, with average costs exceeding $7,000 annually per patient. This trend puts strain on employers trying to care for their employees while managing their plan costs in a way that allows them to offer sustainable benefits over the long term, especially with top-advertised drugs often costing $10,000 to $20,000 annually. If the cost becomes unsustainable for the employer, patients will eventually have to pay for it in some form – either higher cost shares or bigger premiums and/or deductibles.
Ensuring Cost-Effective Medication Use for a Healthier System
As mentioned earlier, there have been numerous attempts at banning or – at a minimum – regulating DTC advertising, which have been largely unsuccessful. Does that mean that we simply sit on the sidelines and watch prescription drug prices continue to skyrocket? Perhaps not. There are ways to ensure that while patients have access to the medications they need to stay healthy, such use is appropriate and cost-effective.
- Educate patients and take the pressure off of prescribers. Pharmacists and physicians play a critical role in patient care. Open dialogue between patients and trusted healthcare professionals leads to better-informed medication decisions. Helping patients be more aware of the impact of their decisions on the cost of healthcare while respecting their autonomy can help balance access and spend. Ensuring prescriber decisions are independent and informed by clinical efficacy and not “medical detailing” is also an important step.
- Consider safe, cost-effective alternatives. Many conditions can be treated with lower-cost, clinically equivalent medications. Helping ensure patients and providers are familiar with the full scope of available treatment options and informed about more cost-effective options can help enable better decisions.
There has been tremendous innovation and progress in the prescription drug landscape over the last several decades and this is good – for patients, for their employers, and for the health of our nation. But for such innovation to be accessible to all patients equitably and to maintain a sustainable future for our healthcare system, we need to make – and enable – more thoughtful choices about prescription drugs regardless of who is paying for a particular prescription.
