Plavix ads indirectly costing taxpayers, study says

Advertising brand-name prescription drugs directly to patients is an American custom and a controversial one at that. A study published Monday in the Archives of Internal Medicine may stir new debate over the practice.

In the case of one blockbuster drug, the study found, a major advertising campaign did little to expand the medication's use but brought price hikes that cost taxpayers hundreds of millions over a seven-year period.

Both critics and defenders of direct-to-consumer drug advertising agree that the advertising of prescription medications will run up the bill that taxpayers foot to provide health-care insurance to the elderly, disabled and poor through Medicare and Medicaid. When patients see ads for a branded drug, they will ask for these medications in greater numbers, and they will get them, the reasoning goes.

But whether that higher price tag buys better health care is a point of dispute. Critics say advertising allows drug firms to pump up their sales to Medicare and Medicaid patients who might otherwise be treated with safer, cheaper medications.

Defenders of the practice argue that drug ads spur more patients to seek treatment for conditions (such as high blood pressure or depression) that are underdiagnosed: Sure, it'll cost more, they say, but that's because more Medicare and Medicaid patients will get the treatment they need.

But what if neither side is right? What if advertising a drug did not spur a rise in a drug's use, just in its price?

That, effectively, is what a pair of Canadians who teamed with researchers from Harvard University and Kaiser Permanente found when they looked at the cost and use of the cholesterol drug Plavix from 1999 to 2005. Plavix was on the market for two years, and its use was growing steadily when Bristol-Myers Squibb launched a major ad campaign for the drug in 2001. Over the next five years, the drug company spent $350 million to promote Plavix in ads aimed at consumers.

But according to Michael Law of the University of British Columbia, the advertising campaign did not accelerate the growth in sales of Plavix, which reached $5.9 billion in 2005. While they continued to grow, Plavix sales grew no faster after advertising began than they had before the ads.

But the cost of the drug certainly accelerated, Law found. Looking at Medicaid expenses in 27 states, Law and his co-authors found that the cost of Plavix shot up from $3.40 per prescription just before advertising began. "Immediately after [advertising] initiation, we found a large, sudden, and statistically significant increase" of 12 percent in the cost of a Plavix prescription.

By the end of 2005, the cost to taxpayers for a Plavix prescription filled by a Medicaid patient rose 25 percent beyond the more modest rate of inflation that would have been expected before advertising began.

Translation: In the Medicaid program alone, just 27 states spent a collective $207 million more on Plavix prescriptions after the big ad campaign began than would have been expected. If one were to figure in the added cost to Medicare and Medicaid programs of the remaining 23 states, the added cost would look like real money.

Lawmakers in recent years have wrangled over whether and how to rein in drug advertising directed at patients rather than physicians, with no changes made to date. The authors say it's not time to put the debate aside.

"Payers and policymakers should appropriately still be concerned about [direct-to-consumer advertising] increasing total drug costs for publicly funded reimbursement programs such as Medicare and Medicaid," they wrote.