Plavix Ads Increase Medicaid Costs but not Usage

Nov. 24, 2009— -- Medicaid spending on the clot-busting drug Plavix soared after direct-to-consumer TV ads for the drug began airing -- though not because of any change in prescription trends, researchers said.

Plavix usage by Medicaid recipients stayed on the same upward track as before the ads started, but the drug's unit cost jumped 11.8 percent when national TV network advertising starting airing in late 2001, according to Michael Law of the University of British Columbia in Vancouver and colleagues.

The net effect was that Medicaid's per-enrollee expense curve for Plavix bent upward at that point, the researchers wrote in the Nov. 23 issue of Archives of Internal Medicine.

From 2002 through 2005, Medicaid spending for Plavix accelerated by $40.58 per 1,000 enrollees per quarter above what would have been expected from the prior trend, Law and colleagues found.

"If drug price increases after direct-to-consumer advertising initiation are common, there are important implications for payers and for policy makers in the U.S. and elsewhere," they wrote.

In an accompanying editorial, Dr. Steven Woloshin and Dr. Lisa Schwartz, both of the VA Medical Center in White River Junction, Vt., called the link between advertising and drug costs "plausible."

The study examined Medicaid data on Plavix spending from 1999 to 2005, along with estimated expenditures on direct-to-consumer marketing for the drug developed by a private ad-industry consulting firm.

The researchers also obtained data collected by Vanderbilt University researchers on the number of TV ads for Plavix aired on network news programs.

Plavix was initially approved in 1997 for prevention of cardiovascular events and treatment of acute coronary syndromes. Direct-to-consumer advertising began in 2001 by its U.S. marketers, Bristol-Myers Squibb and sanofi-aventis.

The companies spent less than $10 million on consumer ads that year, but the figure quickly soared: nearly $60 million in 2002 and more than $100 million annually in 2004 and 2005, Law and colleagues reported, making clopidogrel one of the 10 most heavily advertised drugs.

The TV news ads began in December 2001, with 17 broadcast that month, according to the Vanderbilt data. Quarterly ad counts averaged about 30 through 2002 and increased further through 2005.

In the last quarter of 2005, some 50 Plavix ads aired on network news programs.

Law and colleagues found that Plavix usage by Medicaid recipients, measured as 75-mg units dispensed per 1,000 enrollees, climbed steadily throughout the study period, with no significant change in slope when the ad campaign began.

Usage rose from about 130 units per 1,000 enrollees in the first quarter of 1999 to about 400 in late 2001.

At the end of 2005, the usage rate hit approximately 920 units per 1,000 enrollees.

Law and colleagues calculated that, had the rate prevailing from 1999 to 2001 continued linearly, the rate in the fourth quarter of 2005 would have been closer to 890 per 1,000 enrollees.

But there was an abrupt, $0.40 spike in the unit cost of Plavix starting in late 2001, the researchers found.

After a gentle linear climb from 1999 to mid-2001, Medicaid's cost per 75-mg unit increased from $3.40 to $3.80 over the following two quarters. It then resumed the former slow, steady increase, reaching about $4 in late 2005.

Prior to the ad campaign, total Medicaid pharmacy costs for Plavix were increasing steadily by $95.68 per quarter per 1,000 enrollees, Law and colleagues said

They found an "elbow" in the curve that coincided with the campaign's start.

"Overall, these estimates indicate a 25 percent increase in reimbursement by the end of 2005 beyond that which would be expected based on the existing [pre-advertising] trend," the researchers wrote.

"Multiplying the increase in rate by the enrolled population in each quarter, this equates to an additional $207 million in pharmacy reimbursement over the study period."

They said the lack of significant change in per-enrollee usage of Plavix after the ads started was unexpected, although, in an earlier study, the same researchers also found no long-term effect of advertising on usage of three other drugs.

Law and colleagues cautioned that their findings do not prove that consumer-oriented ad campaigns increase drug costs.

"Offsetting the costs of direct-to-consumer advertising may have been one of several potential motivations for the increase in per-unit cost of Plavix; other factors that might play a role in price setting include anticipating increased Plavix sales, concurrent changes in the sales of the manufacturers' other drugs, overall market conditions, and research and development costs for future products," they noted.

The researchers also said their findings might have been unique to Plavix and its advertising. They pointed out that responses to advertising could be different for drug classes in which several competing products are advertised, which was not the case with Plavix.

Another limitation was that the study did not examine marketing to physicians, which might also affect prescription rates.

Woloshin and Schwartz, in their editorial, said that one way to stay afloat in the "deep sea" of skewed industry marketing would be to make FDA information on drugs more widely available.

"The FDA should create standardized executive summaries of drug reviews that quantify the benefit and important harms found in the Phase III trials," they wrote, recommending that the summaries be posted on the agency's Web site and attached to all advertising materials.