A Price Disclosure in Drug Ads Misses the Point

(Bloomberg Opinion) -- President Donald Trump has proposed that drug ads on television disclose prices, and last week Johnson and Johnson declared that it would voluntarily do this for some ads. But that’s like treating a malignant growth with a Band-Aid. What consumers really need is usable information on whether drugs work. Instead television drug ads appeal to the emotions, playing on hope of relief from pain or other symptoms, fear of illness, or desire for youthful energy.

Though the Food and Drug Administration is supposed to ensure that drugs show some efficacy, many approved drugs that seem to work miracles on TV performed only marginally better than placebos in clinical trials. Some are indirectly marketed for unapproved uses through awareness campaigns. Some come with a risk of serious side effects that television commercials bury amid long lists of minor ones. Also, what is the likelihood of each of these side effects?

Requiring price information is part of Trump’s plan to lower drug costs, but drug ads are a major factor in driving up costs in the first place. According to a new analysis published in the Journal of the American Medical Association, the pharmaceutical industry spends $30 billion a year on marketing, including $9.6 billion on direct-to-consumer ads. (Of that, $6 billion goes into TV commercials.)

Trump’s proposal gives “the illusion of doing good,” said Steven Woloshin, an MD and co-director of the Center for Medicine and Media at the Dartmouth Institute. He co-wrote the JAMA analysis with his wife, Lisa Schwartz. Most people don’t pay the list price for a drug, he said, “so the list price is an abstraction.” Beyond that: “It could make things worse because some people assume more expensive drugs are more effective.”

Direct-to-consumer ads for prescription drugs are illegal everywhere in the world except New Zealand and the U.S. Woloshin said their use – particularly on television – skyrocketed after 1997, when the FDA relaxed rules about presenting risks and side effects in TV ads, allowing advertisers to refer viewers to other sources. 

Over the next 20 years, spending on television drug ads ballooned to $6 billion from $1.3 billion. Pharmaceutical companies make the case that the advertisements provide an educational service, and many look this way by raising awareness of disease rather than directly pushing drugs.

Schwartz and Woloshin examined some of these, including an extremely popular campaign by Allergan to raise awareness of a condition called dry eye syndrome. The cure? Allergan’s drug Restasis, of course. But as the researchers found, the FDA initially rejected Restasis because it was not convinced the drug had any meaningful benefit. 

The company amended its proposal to the FDA several times and eventually got approval based on indirect criteria, even though the drug showed such marginal efficacy that it never won approval in the European Union, Australia or New Zealand, and Canada’s national health service refused to pay for it. But in the U.S., ads scaring people into thinking sore or itchy eyes might endanger their sight may have helped propel the drug to blockbuster status, with $8.8 billion in sales between 2009 and 2015.

The researchers also looked at sales of testosterone, which is approved only for a few specific conditions – including trauma, chemotherapy or genetic disorders that cause low testosterone in men. No one questions the use of testosterone for such underlying conditions, even though some studies have suggested possible elevated risk of heart attack and stroke.

What made it a blockbuster was advertising. Abbott Laboratories, now AbbVie, produced an award-winning marketing campaign for testosterone to treat a condition called “low T of aging,” which some experts argue might not be a real disease. The ads include a quiz, which suggests asking a doctor about this disease if you have such symptoms as lower energy or bad moods. Over a period of seven years, there were 25 million prescriptions and $9.7 billion in sales – mostly for off-label use. The company got around laws against off-label marketing because it was, ostensibly, an awareness campaign and not an ad for a specific brand.

The long lists of side effects in TV ads can give the impression of candor, but this information overload can obscure the most serious risks and make it hard for consumers to balance them against the benefits. As an example, Woloshin and Schwartz looked at ads for a drug called Abilify, an antipsychotic used to treat depression. One ad showed a compelling image of a woman freed from a ball and chain. And yet, data from the FDA indicated that the drug had only a modest benefit – an improvement of about three points on a 60-point scale. The ad listed side effects – many unlikely – without revealing that one was common: In trials, 21 percent of patients suffered from a form of severe restlessness called akathisia.

Advertisements for preventive drugs can also present statistics in the most favorable light, such as an ad for Lipitor, which says the drug cut the risk of stroke by half, but never tells people the more useful absolute risk. It goes from 2.8 percent to 1.5 percent.

Woloshin and Schwartz proposed a solution back in 2012, published in the Proceedings of the National Academy of Sciences: Require that drugs come with short “fact box” with relevant data from clinical trials. It would work something like required food labels. The fact boxes would include basic information on how well the drug worked, and clarify the most common and most severe side effect. There might also be warnings about newly approved drugs, because it can take some time after trials finish before serious or even deadly side effects are uncovered, as happened with the painkiller Vioxx.

The researches went on to test their idea, using fact boxes for two drugs with similar side effects but one showing greater efficacy in trials. People were able to to pick the better drug only 31 percent of the time after seeing advertisements, and 68 percent of the time when they got a fact box.

There’s no getting rid of drug advertising in the U.S. American consumers cherish our freedom of speech too much, and are, for the most part, willing to put up with drug advertising as an unpleasant side effect. The antidote is not just a tacked-on price disclosure, but independently derived, clear information on what matters most: how well the drugs work. Unless you know the likely benefits and harms, how can you decide if the drug is worth it at any price?

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Faye Flam is a Bloomberg Opinion columnist. She has written for the Economist, the New York Times, the Washington Post, Psychology Today, Science and other publications. She has a degree in geophysics from the California Institute of Technology.

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