From 2016 to 2018, Medicare and its beneficiaries spent $560 billion on drugs—more than half on drugs that were advertised to encourage consumers to ask their doctors for specific medications, according to a report from the U.S. Government Accountability Office (GAO). Nearly half of all ad dollars centered on drugs to treat chronic medical conditions like arthritis, diabetes, and depression.
Most advertising was for brand-name drugs with about 2/3 of ad dollars spent on just 39 drugs. Drug manufacturers also spent more on advertising to coincide with a drug's launch (about half of ad dollars promoted newly marketed drugs) or advances in a drug's development.
Drug manufacturers spent $17.8 billion on direct-to-consumer advertising (DTCA) for 553 drugs from 2016 through 2018, and spending was relatively stable at about $6 billion each year. Almost half of this spending was for three therapeutic categories of drugs that treat chronic medical conditions, such as arthritis, diabetes, and depression. The GAO also found that nearly all DTCA spending was on brand-name drugs, with about two-thirds concentrated on 39 drugs, about half of which entered the market from 2014 through 2017.
Among the drugs with the highest Medicare spending, some also had the highest DTCA spending. Specifically, among the top 10 drugs with the highest Medicare Parts B or D expenditures, four were also among the top 10 drugs in advertising spending in 2018: Eliquis (blood thinner), Humira (arthritis), Keytruda (cancer), and Lyrica (diabetic pain).
GAO's review of four advertised drugs found that drug manufacturers changed their DTCA spending during key events, such as increasing spending when a drug was approved to treat additional conditions or decreasing spending following the approval of generic versions. GAO also found that DTCA may have contributed to increases in Medicare beneficiary use and spending among four selected drugs from 2010 through 2018.
However, other factors likely contributed to a drug's Medicare beneficiary use and spending, making it difficult to isolate the relationship between drug advertising, use and spending.
GAO analyzed DTCA spending data from Nielsen Media, and Medicare Parts B and D Drug Spending Dashboard data, from 2016 through 2018 (the most recent available data at the time of GAO's analysis). GAO also analyzed DTCA spending and Medicare data for a non-generalizable selection of four advertised drugs over a longer period—from 2010 through 2018.
