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The Wall Street Journal reported that U.S. companies and health insurers "are alarmed by what they see as two related trends: U.S. direct-to-consumer drug ad spending soared to $2.49 billion in 2001 from $859 million in 1997, according to data-research company CMR. Meanwhile, drug costs for large employers rose more than 16% annually beginning in 1997, says drug-benefits company Express Scripts Inc."
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General Motors Corp. spent $55 million last year for something totally unrelated to steel, tires – or to cars at all. It was for Prilosec, the expensive little purple pills for heartburn.
The auto company's overall cost of drugs for workers and retirees shot up 14% last year, to $1.3 billion. A prime culprit was direct-to-consumer advertising, say GM executives. And they regard Prilosec, the No. 1 drug expense at GM, as a case in point: It was heavily advertised for years, is often unnecessary in GM's view and costs 13 times as much as a leading generic.
"Are drug company ads driving up health-care costs? You bet," says Woody Williams, GM executive director of health-care initiatives. "Not everyone with heartburn needs the purple pill."
Direct-to-consumer drug advertising exploded in 1997, when the Food and Drug Administration loosened restrictions, and it has revolutionized drug marketing. The result has been a torrent of ads hawking medicines just like soda, sometimes using celebrities as pitchmen. An ad for Zocor, the cholesterol drug, shows NFL coach Dan Reeves talking to kids and saying: "Taking care of my cholesterol has become an important part of my game plan." And Olympic gold-medallist Dorothy Hamill appears in an ad for Vioxx; while lacing her skates she confides: "Along with all the great memories has come something I thought I'd never experience – the pain of osteoarthritis."
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