Not long ago, the largest doctors’ group in the United States joined other leading health organizations in calling for an end to direct-to-consumer advertising of prescription drugs, arguing such ads increase health costs and put patients’ health at risk.
But research by Chicago Booth’s Bradley Shapiro suggests that advertising spending for antidepressants, in particular, isn’t driving up drug prices—and is improving access to treatment for Americans who need it.
In 1997, the Food and Drug Administration loosened advertising restrictions to allow companies to market pharmaceuticals directly to consumers. Companies were only required to make brief disclaimers about side effects, rather than provide an exhaustive list, which would have taken up much of a 60-second television commercial. Consequently, drug ads started appearing on television and radio, online, and in magazines.
However, these ads have attracted mounting criticism. The American Medical Association, in 2015, called for a ban on direct-to-consumer prescription drug ads, and Hillary Clinton, during her 2016 US presidential campaign, called for an end to the tax exemption that drug companies receive for advertising expenses. Critics say such ads encourage patients to ask physicians for drugs they don’t need or that may not be right for them. Because companies often advertise new, expensive, brand-name drugs, this can lead to higher health-care costs.
But in the case of antidepressants, Shapiro highlights some benefits of advertising.
Focusing on employee absences and workdays—key indicators of whether patients suffering from a serious depressive disorder are getting the help they need from their medications—he finds that a 10 percent increase in advertising caused both a 0.3 percent increase in new prescriptions and a 0.4 percent decrease in absenteeism.
On this episode of the Capitalisn’t podcast, hosts Kate Waldock and Luigi Zingales look at the role of supply and demand in fueling the distribution of prescription painkillers.
Capitalisn’t: O. Contin Pusher, M.D.Shapiro analyzed more than 1.8 million medical claims from commercially insured employers. Health data were gathered by Truven Health Analytics, a subsidiary of IBM Watson, and advertising data came from the Nielsen Datasets at the Kilts Center for Marketing.
The research also uncovers other behavioral effects of the ads, in particular that they contributed to a drop in people taking their medications, according to Shapiro’s analysis of patient prescription patterns from the claims data. A 10 percent increase in advertising led to a 0.04 percent decrease in the likelihood that patients refilled their prescriptions. People on antidepressants for extended periods tend to get worn down by ads for these drugs, perhaps by hearing the side-effect profiles listed over and over, Shapiro suggests. This can lead some people to stop taking their medications. That’s bad if they need the medication—and good if they were people not well-suited for the treatment.
The research also finds no evidence that drug ads drove up the price of the medication being advertised, which is a frequent concern in the policy debate.
Many people introduced to antidepressants through ads “stand to gain and do gain from treatment,” Shapiro concludes. “It highlights that a more nuanced approach than a blanket ban on (direct-to-consumer advertising) might be desirable.”
Bradley Shapiro, “Promoting Wellness or Waste? Evidence from Antidepressant Advertising,” Working paper, March 2018.
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