Getting Off the Latest Beltway Bandwagon:Atop the increasingly crowded bandwagon, everyone knows that "marketing" is the latest evil perpetrated by the pharmaceutical producers; after all, it must cost something and higher drug prices must be the outcome. But once again, everyone—meaning The Beltway and all of its colonies—is wrong.
Why Conventional Wisdom on Drug Marketing Is Wrong.
Benjamin Zycher, Ph.D.
Medical Progress Today
October 20, 2006
As counterintuitive as it may seem, pharmaceutical marketing is hugely beneficial for patients and is likely to reduce prices. After all, to those of us in need of a drug for simplemindedness, the provision of information about medicines—coupled with the admonition "Ask your doctor!"—would seem to be salutary, the evidence of which is summarized below. And because most drugs are hugely expensive to develop but relatively cheap to produce, it is precisely that evil marketing that promises to expand utilization, spreading development costs over more sales and lowering prices for all.
But that is not the view from the lofty perch of the bureaucrats and the policymakers. Au contraire, dear Reader: From their perspective, marketing increases both prices and drug utilization, driving up budget costs for government health care programs. This in turn yields greater infighting among interest groups engaged in a life–or–death tug of war over spending choices, and more pressure on planners to reduce government outlays, specifically, for drug programs.
And so it may be a bit unfair to suspect that government planners pine for the days of fewer medicines and shorter lives. But it is indisputably true that a government with interest groups to placate and budget pressures to resolve does not have customers or patients to satisfy. Instead, like the beloved duck on Groucho Marx' game show You Bet Your Life—which would descend from the heavens with a cigar and a crisp $100 bill upon hearing the secret word of the day—planners now have a one–word panacea for government drug programs: Generics. After all, they are cheap and largely untainted by marketing. The larger truth that drugs cannot become generics without first having been developed, sold, and, yes, marketed as brand–name medicines has been submerged beneath the growing clamor about prices, spending, and marketing.
This is only one dimension of the gathering storm on drug marketing, now in its juvenile stages in more ways than one. Formal efforts to constrain such marketing have emerged thus far in a few states; the latest such proposal is the forthcoming rulemaking by the District of Columbia Department of Health to obtain data forcibly from pharmaceutical producers on the cost of "marketing" prescription medicines in D.C. Separate expenditure reports would be required for each recipient of marketing, such as physicians, hospitals, and clinics, and "marketing" would include advertising, informational seminars, and a host of other activities that may or may not be easy either to define or to allocate on a geographic basis.
Quite apart from the effect of such a system in terms of ever-greater bureaucratization, this effort on the part of the D.C. government is the tip of an iceberg not content merely to obstruct. Instead, it is—obviously—the first step in a campaign to disallow marketing costs, however poorly defined and measured, from drug prices in public programs, that is, to impose price controls on medicines.
Let us shunt aside the definitional and administrative problems inherent in such a plan, as well as the perversities and long–run human suffering that inexorably would be engendered by price controls. Let us ask instead a question narrower but crucial: Does marketing of pharmaceuticals improve patient wellbeing?
The National Center for Health Statistics reports that millions of Americans are undiagnosed for serious conditions: Examples include 17 million for hypertension, 6 million for diabetes, and 32 million for high cholesterol. Published research reports that as a result of patients discussing an advertised drug with their physicians, 25 percent obtained new diagnoses of such serious conditions as diabetes, hypertension, and depression.
A survey by the FDA reports that 86 percent of physicians have had conversations with patients about an advertised drug, and that of the times that patients ask about an advertised drug, they actually have the respective conditions 88 percent of the time. Almost three–quarters of the physicians surveyed agreed that pharmaceutical advertisements led patients to ask thoughtful questions.
Other published research reports that physician visits prompted by drug advertising resulted in a prescription of the advertised drug 43 percent of the time, of any medicine 72 percent of the time, and other actions—referrals to a specialist, recommendations for diagnostic tests or over–the–counter drugs, and/or suggested lifestyle changes—between 19 percent and 52 percent of the time.
In short: The evidence suggests strongly that pharmaceutical marketing provides significant medical benefits, even apart from the greater exploitation of scale economies noted above. And this ought not to be surprising: Patients and doctors are not unwitting lemmings, notwithstanding the implicit assumption to the contrary prominent among the elite.
The provision of information to patients and physicians is one important tool allowing technological innovation in pharmacology to further the reduction of human suffering. Notwithstanding the fact that drug marketing of late has become everyone's favorite pińata, that is an eternal truth that planners ought not to forget.
Benjamin Zycher is a senior fellow at the Manhattan Institute for Policy Research. Email: email@example.com.