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U.S. health-care industry spends $30 billion a year on marketing

Written by: | no-reply@reuters.com | Dated: Tuesday, January 8th, 2019

 

By Lisa Rapaport

(Reuters Health) – Spending on health care advertising in the U.S. has almost doubled over the past two decades as companies compete for their share of the world’s biggest health care market, a U.S. study suggests.

Annual health care marketing surged from $17.7 billion in 1997 to at least $29.9 billion in 2016, driven by a rapid spike in spending on direct-to-consumer (DTC) advertisements for prescription drugs, the study found. Over this period, DTC spending climbed from $2.1 billion to $9.6 billion.

Pharmaceutical marketing to health professionals accounted for the biggest outlay, and climbed from $15.6 billion to $20.3 billion despite new policies at hospitals and medical schools designed to limit industry influence over prescribing.

“While marketing may have positive effects like destigmatizing diseases (e.g., HIV) or embarrassing symptoms (e.g., impotence) it can also expand or even create disease or raise false hopes by exaggerating treatment effects – for example marketing of marginally effective Alzheimer’s drugs,” said study coauthor Dr. Steven Woloshin of the Dartmouth Institute for Health Policy and Clinical Practice in Lebanon, New Hampshire.

“This can lead to overdiagnosis, overtreatment (with associated harms) and wasted resources,” Woloshin said by email.

To compete for market share, just about every player in the industry from drugmakers to insurers to hospitals to diagnostic test makers invest in marketing to insiders who make prescribing and purchasing decisions as well as to consumers.

Health spending in the U.S. is the highest in the world, totaling $3.3 trillion in 2016, or 17.8 percent of the gross domestic product, researchers report in JAMA.

The industry marketing outlays in the current study match the roughly $30 billion budget of the National Institutes of Health and far outstrip the budget of about $5 billion for the agency in charge of policing the industry, the U.S. Food and Drug Administration (FDA), Woloshin noted.

The study focused on marketing of prescription drugs, disease awareness campaigns, health services, and laboratory tests to consumers and professionals. It underestimates total spending because researchers lacked data on so-called detailing, or sales calls to clinicians, coupons or rebates, online promotions, and spending on medical meetings and other events, the authors note.

Industry marketing budgets also include numerous other outlays that weren’t counted in the study, like the cost of training and salaries for sales reps, marketing research, fees paid to advertising agencies and lobbying campaigns, the authors also point out.

Still, it is the most comprehensive analysis of medical marketing in the U.S. that has ever been done, said Dr. Howard Bauchner, editor-in-chief of JAMA.

“For clinicians, policy makers, and patients it is important for them to be aware of the extent of medical marketing,” Bauchner said by email.

“Since DTC advertising is legal in the U.S. it is important for patients to discuss anything that they read, see (TV ads) or hear with their clinician,” added Bauchner, coauthor of an editorial accompanying the study. “It is difficult in adverts to present a complete analysis of risk and benefit of any drug, device, or test.”

Even with the rise of marketing and consumerism, physicians still make the bulk of decisions, and it’s not surprising that the industry devotes most of its marketing funds to reaching professionals, said Meredith Rosenthal of the Harvard T.H. Chan School of Public Health in Boston, who coauthored an accompanying editorial.

“Marketing can cause doctors to switch to slightly better (and sometimes not even) better new products that cost substantially more,” Rosenthal said by email.

And marketing can be a mixed bag for patients.

“DTC for health services might also encourage consumers to get services they don’t need – tests in particular, and these can have negative consequences (false positives, worry about small risks),” Rosenthal added. “On the benefit side, some DTC advertisements help de-stigmatize conditions like sexually transmitted infections or depression and encourage people to seek care.”

 

SOURCE: bit.ly/2TCQsen JAMA, online January 8, 2018.

 

Reuters source:

https://www.reuters.com/article/us-health-medical-marketing/u-s-health-care-industry-spends-30-billion-a-year-on-marketing-idUSKCN1P22GG

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