News flash! The US pharma industry spends a lot of money promoting its products! But where this money gets spent, and whether it exerts an inappropriate influence on how consumers make healthcare choices, is an ongoing, fraught debate. A new analysis by researchers at the Dartmouth Institute for Healthcare Policy and Clinical Practice, and published in JAMA*, highlights DTC promotion—the target of most critics of industry practices—but puts the numbers in an interesting context of overall healthcare promotional spending.
The Dartmouth researchers examined a select group of promotional spending categories: pharma industry advertising and promotion (including unbranded disease-awareness campaigns); health services advertising (e.g., hospitals and professional services); and laboratory testing advertising. (Notably absent: promotion of medical devices, and over-the-counter products; and non-advertising promotion by health services and labs). Rolled up, the spending was $17.7 billion in 1997, and $29.9 billion in 2016 (all figures reported in 2016 dollars), including:
- Pharma promotion (branded and unbranded): $17.1 to $26.9 billion, up 60%
- Health services (DTC advertising only): $542 million to $2.9 billion, up 430%
- Laboratory testing (DTC advertising only): $75.4 to $82.6 million, up 10%.
To put these in context, here are the researchers’ figures on healthcare spending, 1997-2016:
- Prescription drug sales: $116.5 to 328.6 billion, up 180%
- Health services: $1.2 to $2.2 trillion, up 90%.
Glass half full?
The $26.9 billion spent by the pharma industry in 2016 has been the target of incessant criticism, especially the $6 billion spent on DTC advertising (mostly television). But the overall 60% increase is less than the growth of pharma sales overall (60% vs. 180%). The researchers note that physician detailing (usually by sales reps) has hardly budged at all, at $5 billion—which translates into a lot of out-of-work reps over the period. Pharma sampling has grown by 52%, from $8.9 billion to $13.5 billion in 2016—a sizable increase, but still well below growth of pharma sales.
While noting that “Drug marketing as a proportion of total US drug spending decreased from 14.7% to 8.2%,” coauthor Dr. Steven Woloshin, MD, also asserts that “I think our findings highlight that there is a lot of room to be more active in regulating medical marketing . . . . there are many feasible steps that could be taken which could potentially improve the quality of health information and cut back on overprescribing and unnecessary medical spending.” All that being said, one wishes for a closer look at that $2.2 trillion in health services spending, which is nearly seven times what was spent on prescription drugs.
*Schwartz LM, Woloshin S. Medical Marketing in the United States, 1997-2016. JAMA. 2019;321(1):80–96. doi:10.1001/jama.2018.19320. The article is free, but registration is required.