Advertising Drugs on Television

In 2016, the American viewing public was exposed to 663,000 television commercials for pharmaceuticals. That is a significant “ad spend” by Pharma, which we pay for through increased drug pricing. A new study looks at the therapeutic value of the more heavily advertised drugs. The key concept here is “market differentiation.”

The stated goal of Direct-to-Consumer (DTC) is to provide the patient/consumer with additional information to inform their “purchasing” decisions. [1] The researchers gathered information on the number and type of television advertising between 2015 and 2021, along with spending. They identified the indication for the drug’s use in the advertisement and used “therapeutic value” data from three independent “health technology assessment” groups in Canada, France, and Germany.

Moderate or greater therapeutic value was categorized as “high therapeutic value.” Here is what they found among the top 81 advertised drugs:

  • A third were immunomodulating agents, 16% were medications aimed at our GI tract or metabolism, and 13% were focused on our neurologic system.
  • 73 of the drugs had at least one therapeutic rating, they comprise the data set.
  • Of those 73 drugs, 27.4% had a high therapeutic rating, with an ad spend of $6.4 billion, an average of $320 million each. They included Humira, Entresto, and Keytruda
  • The remaining 71.6% had low therapeutic value, with an ad spend of $15.9 billion, an average of $300 million each. They included Trulicity, Chantix, and Xeljanz

The researchers discussed the usual concern that “manufacturers have greater incentive to promote drugs of lesser value.” Now, in part, that may be true. Chantix is a strong case for that viewpoint; there are generic versions of varenicline in the marketplace. Advertising helps differentiate Chantix from its competitors.

In MBA land, this is termed market differentiation, and it can be done along many lines, including price, quality, innovation, and accessibility. Brand-name drugs cannot differentiate on price, at least to their advantage, so they differentiate by quality or at least the presumption of higher quality. The other two low-therapeutic-value drugs have no generic competitors, but they have several other therapeutic choices available to patients. So perhaps their differentiation is price or accessibility.

Market differentiation from competitors along the lines of efficacy, a form of quality, is at play in advertising those three high therapeutic value medications (Humira, Entresto, and Keytruda). Most drugs for these indications, psoriatic arthritis, heart failure, and cancer, are expensive, so name recognition plays an important role here. This is, in part, consistent with another statement by the researchers.

“The American Medical Association and public health advocates have called for restrictions on direct-to-consumer drug advertising, warning that it inflates demand for newer, more expensive drugs at the expense of less costly alternatives.”

The research and understanding of advertising as a means of market differentiation suggests that this is not always the case. Unstated in that quote but present in knowing the history of DTC advertising is this thought

“At the heart of these efforts were the goals of reducing self-treatment and encouraging deference to professional medical judgment.” [2]

An argument made for well over 100 years. There is a "middle-way" between self-treatment, patient autonomy, and deference to medical judgment honed by training and experience. DTC television advertising has not found that path.

[1] There is a blurring here of the role of patient and consumer. A patient receives healthcare while a consumer purchases such care. Untangling those roles is a topic for another day.

[2] : A History of Drug Advertising: The Evolving Roles of Consumers and Consumer Protection Milbank Quarterly DOI: 10.1111/j.1468-0009.2006.00464.x

Source: Therapeutic Value of Drugs Frequently Marketed Using Direct-to-Consumer Television Advertising, 2015 to 2021 JAMA Network Open DOI: 10.1001/jamanetworkopen.2022.50991