Question

Pharmaceutical companies frequency advertise drugs that require a doctor's prescription. Consider how much advertising might affect drug costs and utilization of services by patients.

Answer 1

Q. Pharmaceutical companies’ frequency advertise drugs that require a doctor's prescription. Consider how much advertising might affect drug costs and utilization of services by patients.

Ans- Indeed, it is true that there is a tremendous amount of increase in the advertisement for the drugs that require a doctor’s prescription by the companies. This argument can be backed by the following facts-

· In 2000 alone the drug companies spent $15.7 billion on drug advertisement.

· The expenditure by the companies has increased more the drug promotion and advertisement as compare to the expenditure made on R&D (in percentage terms not in absolute terms.)

· The volume of drug promotion is so intense/high that a general American watches 100 minutes of these drug promotional videos for each minute he spends with a doctor.

So, the above mentioned facts prove the fact the frequency of and expenditure made on drug advertisement and is very high and indeed it has some kind of effects on the drug costs and utilization of services by patients.

Firstly, the effects of advertisement on drug costs will be discussed and then the effects of drug advertisement on utilization of services by patients.

The effects of advertisement on drug costs-

The effects of advertisement on drug costs can be ascertained from the following reports.

· The 2000 GAO report published that most of the spending by consumers were done on the heavily advertised products.

· The same GAO report published that for every 10% increase in the advertisement for a particular class of drug led to an increase of 1% increase in the sales of that class of drug.

· Another report from Netherlands published that the patients more frequently visits a doctor with regard to the drugs which are more advertised.

· Another report from the USA published that $20 billion could be saved annually if the generic name of drugs had been used.

The above reports make it clear that there is a direct/significant relationship between the drug costs and its advertisements. Moreover, the drug advertisement also forces the doctors to prescribe more trending/new medicines which cause increase in the cost of health system.

The effects of drug advertisement on utilization of services by the patients-

The effects of drug advertisement have mixed effects on the utilization of services by the patients. The reason is that, on the one hand, drug advertisement increases the awareness of patients about the drug which led to better discussion between the doctor and patients, hence, improvement in the diagnosis and treatment. But, on the other hand, the patients also vex the doctors and insist them to prescribe particularly advertised drugs which led to the deterioration in the relationship between the doctors and the patients and consequently it negatively impacts the treatment of the patients. Hence, it the advertisement of drugs has both positive as well as negative impact on the utilization of services by the patients. Hence, the medical authorities should provide proper guidelines for the advertisement of drugs as drug cannot be compared with other commodities and their advertisement.

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