Is Big Pharma About To Be Banned From Advertising Drugs?
Big Pharma has the highest average profit margins of any of the five major industrial sectors, matched only by banks. In 2012 alone, the top 11 major pharmaceutical companies made $85 billion dollars, which prompted Harvard professor, Bill George, to ask, “Is the role of leading large pharmaceutical companies to discover lifesaving drugs or to make money for shareholders through financial engineering?”
It’s no surprise that a major engine of this financial growth is advertising. The pharmaceutical industry’s advertising expenditures are massive—and growing each year. In 2015, pharma companies spent $4.53 billion on direct-to-consumer ads. As high as it sounds, however, the figure is misleading because the industry spends exponentially more on promoting drugs to physicians. Pew reports that in 2012, the industry dispensed a staggering $24 billion into marketing drugs to doctors.
If the American Medical Association (AMA) has its druthers, this is about to change. The group has adopted a policy that calls for a ban on prescription drug and medical device advertisements. Siding with the World Health Organization, the National Center for Health Research, and the consumer advocacy group, Public Citizen, the AMA claims such ads contribute to doctors over-prescribing medications.
In a statement, Dr. Patrice A. Harris, the AMA’s incoming chair, said,
Today’s vote in support of an advertising ban reflects concerns among physicians about the negative impact of commercially driven promotions, and the role that marketing costs play in fueling escalating drug prices.
The group also expressed concern over the price of unnecessary treatments and “anticompetitive behavior in a consolidated pharmaceutical marketplace.”
Though the rise in drug prices seems to be the group’s primary concern, there are other reasons for trepidation regarding over-prescribed medications. The number of people who die from prescription drug overdose every year is rising dramatically. Of the 44,000 people who died of a drug overdose in 2013, 52 percent of them were using prescribed meds.
Consuming 75 percent of the world’s prescription drugs (and 80 percent of its painkiller prescriptions), the United States now confronts a drug epidemic fueled largely by doctor-prescribed medications.
This problem also contributes to people turning to street drugs like heroin when they can no longer fill their painkiller prescriptions.
In its new ban proposal, the AMA notes the top 10 advertised drugs are medications for erectile dysfunction, arthritis, mental health issues, stroke prevention, fibromyalgia, and diabetes. Given the massive financial impact it would have on an industry with powerful Washington lobbyists, it seems unlikely a ban on advertising would ever be enforced. However, attention to the issue may help inform a much-needed national conversation on the subject.
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