Drug Spending Rises As Regulation Slows

Pharmaceutical companies spent $30 billion in the United States to market drugs over the past decade. With such a huge increase in spending on samples, marketing, and the ubiquitous direct-to-consumer ads, one would think that the FDA’s expenditures and its enforcement efforts would have increased as well.

Sadly, the FDA sent only 21 warning letters to drug companies in 2006 for deceptive marketing practices, whereas the same agency sent 142 such letters nine years prior. So does this mean that drug companies have finally cleaned up their acts? Or is the FDA sleeping on the job?

In 2002, the Food and Drug Administration had only 2 employees who were charged with reviewing direct-to-consumer advertisements for false information. In 2004, the FDA had doubled its enforcement team to a dismal 4 employees. During this same time period, drug manufacturer spending on direct-to-consumer advertisements rose 45% from $2.9 billion to $4.5 billion. A 2003 study by the Kaiser Foundation noted that drug company revenues increased by $4.20 for every extra $1 spent on advertisements.

Direct-to-consumer advertising increases sales of drugs, and studies have shown a lot of it is misleading, said Lisa Bero, a pharmacologist who has researched drug marketing at the University of California, San Francisco. I think that it means we’ll be getting more and more misleading information.

Last year, the Institute of Medicine recommended that the government prohibit direct-to-consumer advertising for the first two years that a new drug is on the market. Such a ban would provide additional time to detect safety issues with new medications before advertising blitzes spur significant increases in new prescriptions. Congress is considering similar proposals this fall.

After litigating pharmaceutical cases for nearly two decades, our firm has seen time and again how the significant increase in direct-to-consumer advertising has caused so many unnecessary prescriptions and drug-induced injuries. It is time for patients to rely on their physicians for information about new drug therapies and not slick television advertisements. Perhaps more patients could afford their medications if less was spent on this needless marketing, and certainly some of that savings could also be poured back into the budgets for clinical trials and studies (which are currently woefully under-funded), provided such trials and studies are designed to identify safety issues and not to expand the marketing potential of a particular drug (sadly a novel concept for many drug companies).

For more information on this subject matter, please refer to the section on Drugs, Medical Devices, and Implants.