They sound like superheroes in some postmodern comic book:
Claritin. Propecia. Viagra. Prozac. Like comic-book heroes,
they can produce miraculous effects. And like comic-book
heroes, they often create as many problems as they solve.
How does an allergy drug (or an anti-impotency pill)
become a household name? The answer is as close as your
TV screen. The pharmaceutical industry spent an estimated
$1.8 billion last year on advertising aimed squarely
at consumers, not doctors. These so-called direct-to-consumer,
or DTC, marketing efforts have had a "tremendous impact"
on prescription drug costs, says Dr. J. Bart McMullan,
senior vice president for health services at Regence
BlueCross BlueShield of Oregon. "It really does affect
demand."
DTC marketing has long been a source of frustration
for Oregon's HMOs, but the smoldering resentment burst
into flame last month with an article in the Oregon
Health Forum, which reported some harsh criticism
of drug companies.
Why the palaver? Portland-area HMO execs say the pharmaceutical
marketing machine is the driving force behind a phenomenal
surge in prescription-drug costs: Most HMOs report that
drug expenditures are rising roughly 15 percent per
year. "We're just seeing the beginning," says Sheela
Andrews, regional director of pharmacy services for
PacifiCare Oregon.
To be sure, there are other factors at work, including
the proliferation of expensive drugs for previously
untreatable conditions, a wave of consolidation among
generic drug-makers, and a rising number of patent disputes
that have kept cheaper generic drugs out of the marketplace.
But there is little doubt that drug-makers' new emphasis
on bringing their messages directly to consumers is
having far-reaching effects on the business of medicine.
In the past, the question of which drug to prescribe
was considered the exclusive domain of the physician.
No longer. "Now [patients] are coming in armed and ready
for a prescription drug they believe will make their
lives better," says Jack Friedman, president of Providence
Health Plans.
Because most insurance plans cover prescription drugs,
patients are typically insulated from the true cost
of their medication. Instead, the tab is picked up by
insurance companies, which pass along the cost in their
premiums. Providence Health Plans currently spends more
money on prescription drugs than on primary care.
Popular name-brand drugs put doctors in a bind. In
many cases, the new drugs represent significant medical
advantages. But often there are cheaper alternative
or generic medications that might be just as effective.
These often go unprescribed, doctors say, because patients
prefer the marquee-name drug--especially when they don't
have to pay for it.
Take a drug like Prilosec, a new medication commonly
used to treat a painful condition known as gastrointestinal
esophageal reflux disorder. "For people with this disorder,
this is a godsend," says Dr. Jim Norris, chairman of
Kaiser Permanente's Formulary Committee. But thanks
to an aggressive marketing campaign by the drug's manufacturer,
many patients with mild heartburn or dyspepsia are now
asking their doctors for Prilosec (cost: $3 a day) instead
of similar, cheaper drugs (cost: 55 cents a day) that
would be just as effective in treating their milder
conditions.
To combat this crippling inflation, Oregon's HMOs are
increasingly shifting the cost to consumers, turning
to a solution known as a three-tiered pricing structure.
Here's how it works: Patients shell out a sliding co-pay
for all their prescriptions. The co-pay is minimal for
generic drugs, larger for older, name-brand drugs and
highest for the marquee drugs.
At PacifiCare, for example, the co-pay for Accupril,
a brand-name blood-pressure medication, is $28 a bottle.
But an older, similar drug, Zestril, is available for
$13, and a generic version, Captopril, costs just $8,
says Andrews of PacifiCare. (Members have access to
several other blood-pressure medications as well, she
adds.)
Although graduated co-pays do help to keep costs low,
they are not popular with consumers. "You're getting
a lot of angry members out there," says Chris Palmedo,
public relations manager for PacifiCare, which adopted
the new structure in January. "We got a huge influx
of calls."
The situation looks as though it will get worse before
it gets better. As pharmaceutical companies continue
their aggressive marketing efforts, drug costs are projected
to outstrip hospital costs in the next decade, which
is certain to leave HMO executives feeling down in the
dumps. Maybe they should take a look at some of those
cheery antidepressant ads in the glossy magazines.
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Willamette Week | originally
published May 5, 1999
