Debunking The Myths

The media stories on DTC are still frequent. USA Today ran a story on banning DTC on 8/10. This follows the New York Times story on 7/27. Obviously, the mass media finds DTC a subject that interests its readers. Despite evidence on DTC’s relatively small impact on sales, albeit positive, the popular belief is that DTC is greatly contributing to improper utilization and higher drug prices. I saw the USA Today story was mentioned by a website call the Consumerist. There were over 20 mostly anti-DTC consumer comments on the story that all were on variations of the two issues mentioned above. I am afraid consumer activists need a lot of continuing education on the real impact of DTC.

As I explained in this story to the reporter, DTC has no impact on raising consumer prices. How can $4 billion of advertising on a $291 billion drug outlay really affect prices? Let’s take Lipitor as an example. The drug does about $8 billion in sales and probably spends about $100 million on DTC. That is about 1.25% of sales. So, assuming Pfizer would stop ads and rebate the entire DTC cost; that would be only a 1% reduction. That is not what would actually happen if DTC was banned. Pfizer would not lower the cost because the government forced them to curtail DTC. That money would go to other promotion or drop to profit.

I think the drug lobbyists need to argue that in fact DTC lowers consumers’ prices. If the government or private insurers want to negotiate, they need brands familiar to consumers to play one brand against the other. DTC creates awareness and also creates acceptance of alternative brands. Once consumers are equally aware of several brands, it is easier for a doctor and plan to substitute the lower cost version. Lipitor knows they have to compete with Crestor, and generic Zocor and Pravachol. That competition lowers prices.

The other argument against DTC that still has traction is that DTC somehow interferes with the doctor’s ability to prescribe what they want. That assumes doctors have all available information and data and are objective. In reality, doctors are not always up to speed on available drugs and rely on habit many times. They are also controlled by insurance plans as to what drugs will be covered and at what co-pay. DTC serves as an alternate source of information that provides a check on what the doctor/insurance plan does. Maybe a consumer inquiry based on DTC gets a doctor to study a new drug or give it a try.

The other frequently argued issue is that the U.S. and New Zealand are the only countries to allow DTC. If it is good for the consumer why does the U.S. stand nearly alone in allowing it? That is because countries that are single payer want control over what their citizens learn about drug treatments. They want no pressure from their citizens on what to allow them to get. That makes sense in a single payer world most interested in providing adequate care to the entire population at a fixed cost. The issue for Americans is do they trust that government can best decide which drugs they can get. DTC is very American by providing an alternative to government provided information. The system of tiered co-pays allows the payers to encourage cheaper drug choices without banning information on newer, branded drugs.

I am afraid that the media interest in whether DTC is good or bad will continue for a long time. As long as some Congressman wants to hammer drug companies DTC will get coverage. All heath care providers now use advertising. Hospitals, doctors, and medical test centers advertise. One could argue that no one should be able to advertise health care products and services covered by insurance. That may reduce demand for health care and save money. That argument can be made for many products government would rather not have us buy. Is that the way we want to go? I hope not because it is a very slippery slope.