Healthy Skepticism Library item: 1711

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Petersen M
TV Ads Spur a Rise in Prescription Drug Sales
New York Times 2002 Mar 8
http://www.nytimes.com/2002/03/08/business/08PRES.html

Full text:

Television advertising, aging baby boomers and the greater use of expensive new medications drove prescription drug sales up 17.9 percent last year, a study shows.

Over all, Americans paid about $208 billion last year for prescription drugs – almost double that spent in 1996, according to NDCHealth, a health care information company, which released the study yesterday in Manhattan.

But at the same time, drug companies slowed the rapid pace of some other promotional spending. The companies spent 6 percent more last year on sales representatives, consumer advertising and meetings with doctors, according to the study. In 2000, those promotional costs rose more than 19 percent and 234 percent in 1999.

“This is a very healthy industry,” said Sheldon Silverberg, an expert on pharmaceutical companies at NDCHealth. “People are walking into doctors’ offices after seeing commercials.”

While the number of prescriptions also increased, total drug sales grew at a much faster pace because of price increases by manufacturers and greater use of expensive new medicines like Procrit and Epogen, injectable drugs for anemia that are produced through biotechnology.

Total prescriptions rose 6.6 percent, to 3.3 billion, last year – the equivalent of almost one prescription a month for every American, Mr. Silverberg said.

Prescriptions for antidepressants rose 10 percent, he said. More than seven million people took an antidepressant last year – up 700,000 from 2000. Some of those people may have started taking the drugs, Mr. Silverberg said, after Prozac lost its patent protection and a lower-priced version began to be sold.

The continuing rise of prescription drug costs is becoming an increasingly contentious issue in dozens of states struggling to pay for patients enrolled in Medicaid, and in Washington, where lawmakers are drafting legislation to add a prescription drug benefit to Medicare. Drug costs are also frustrating employers as health insurance premiums continue to rise.

To try to ease the concerns, four drug companies – Pfizer, Eli Lilly, GlaxoSmithKline and Novartis – recently created discount cards that allow low-income elderly people to get deep discounts on products.

But the companies continue to increase the number of consumer ads.

The pharmaceutical producers spent $2.8 billion last year on consumer advertising, according to Quintiles Informatics, a consulting firm – an increase of 12 percent. In 2000, consumer advertising increased 31.5 percent.

The most advertised drug last year was Celebrex, for arthritis, followed closely by Vioxx, its competitor. The next-highest advertising expenditures were to promote Allegra and Claritin, two allergy drugs, and Viagra. Pfizer has sharply increased advertising of Viagra because two new medicines for impotence, which will be the drug’s first competitors, are nearing approval.

Most of the companies’ marketing expenses go to pay their armies of sales representatives who visit doctors, nurses, hospitals and managed care companies. The industry had 81,600 sales representatives last year, according to Quintiles, an increase of 45 percent since 1998.

Mr. Silverberg said the drug companies were increasingly inviting doctors to meetings, dinners and other events where their products are promoted. The companies held 370,300 meetings and events for doctors last year – an increase of almost 18 percent.

“Doctors continue to get the lion’s share” of the money spent to promote medicines, Mr. Silverberg said.

http://www.nytimes.com/2002/03/08/business/08PRES.html

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You have to provide spam-amenable information in order to download the NDCHealth presentation. Alex Tsai has included the direct PDF links below. To download the presentation in blocks of 25 pages (each file is approximately 800K): http://www.ndchealth.com/epharma/YIR/pdfs/PharmaTrends2001Pgs1-25.pdf http://www.ndchealth.com/epharma/YIR/pdfs/PharmaTrendsFinal2001Pgs26-50.pdf http://www.ndchealth.com/epharma/YIR/pdfs/PharmaTrendsFinal2001Pgs51-75.pdf http://www.ndchealth.com/epharma/YIR/pdfs/PharmaTrendsFinal2001Pgs76-100.pdf http://www.ndchealth.com/epharma/YIR/pdfs/PharmaTrendsFinal2001Pgs101-125.pdf http://www.ndchealth.com/epharma/YIR/pdfs/PharmaTrendsFinal2001Pgs126-163.pdf

To download the presentation in one big file (4.3MB): http://www.ndchealth.com/epharma/YIR/pdfs/PharmaTrendsFinal01.pdf