Consumer Ads Pump up Prescription Drug Costs

NEW YORK (Reuters Health) - Medicaid pharmacy costs for the blood-thinning drug Plavix jumped at around the same time the drug's maker started advertising it to consumers -- even though the number of people prescribed the drug didn't change, new research shows.

In the current issue of the Archives of Internal Medicine, Dr. Michael R. Law of the University of British Columbia in Vancouver and colleagues note that spending by government insurers for prescription drugs rose about 15 percent each year between 1994 and 2004. There's been an assumption that advertising drugs to consumers helps drive up prescription drug costs but there's little evidence to back this up.

To investigate, Law and his team looked at Medicaid costs for Plavix from 1999 through 2005. The drug's maker, Bristol Myers Squibb/Sanofi-Aventis, didn't start advertising the drug to consumers until 2001. Medicaid, which helps pay for health care for low income people, accounts for two-thirds of all government spending on prescription drugs.

Before and after 2001, Law and his team found, the number of Plavix pills dispensed for every 1,000 enrollees in the plans they studied stayed the same. But starting in 2001, Plavix cost 40 cents more per pill, a 12 percent increase that translated to an additional $207 million in Medicaid pharmacy spending.

While the study didn't look into why the per-pill cost of Plavix rose in 2001 -- in the same quarter that the company launched its consumer ad campaign for the medication -- "the timing of this increase in price is certainly suspect," Law told Reuters Health.

In a written response to Reuters Health, a spokesperson for the drug company said: "The Bristol Myers Squibb/Sanofi pharmaceuticals partnership support direct-to-consumer advertising as a way to encourage consumers to play a more active role in their healthcare."

In previous research, Law noted, he and his colleagues found that advertising drugs to consumers didn't result in a rise in people taking the medication. "The public should rightly wonder why they're paying millions in extra drug costs to pay for advertising campaigns that don't work," Law said.