Magazine article Drug Topics

Survey Says: DTC Advertising, R&D Driving Up Drug Costs

Magazine article Drug Topics

Survey Says: DTC Advertising, R&D Driving Up Drug Costs

Article excerpt


Direct-to-consumer (DTC) advertising and expenses associated with developing new drugs are driving escalating prescription costs, according to the 2002 Arxcel Pharmaceutical Benefits Research Survey. Arxcel is a prescription benefit manager based in Buffalo.

The survey, conducted during December 2001 and January 2002, utilized telephone research interviews. Seventy-five surveys were completed from interviews with corporate executives belonging to health plans, self-insured employers, and third-party administrators.

The survey also revealed the following:

Six out of 10 respondents (61.3%) chose DTC advertising as the one cause that has played the largest role in escalating drug costs, 20% cited the expense of developing new drugs, 10.7% of respondents named the aging population, and 4% each blamed changes in use of pharmaceutical product and inflation as the cause.

Who is responsible for high pharmaceutical costs? A whopping 80% singled out pharmaceutical companies, 16% put the onus on consumers, and 2% pointed a finger at the government. No one listed managed care organizations or physicians as culprits.

When it comes to possible solutions for slowing pharmacy cost escalation, slightly more than a quarter of respondents gave as a possible solution "providing incentives through tiered copayment levels." One-fifth named educating doctors about the cost and proper use of pharmaceuticals; 17% said government involvement; just under 15% said increasing the patient's cost share; 11% cited patient education about cost-effective use of medicines; 6.7% indicated identifying and measuring medical savings through proper use; and 5.3% said limiting coverage for high-cost medications. No respondents selected establishing incentives for physicians or limiting access to certain pharmacies.

Respondents were asked to rate each of these potential solutions as to their individual viability as a solution for slowing down the rate of price increases on a scale of 1 to 4. A rating of 1 meant the solution would have high potential to make an impact, while a rating of 4 meant the solution would have very little or no impact.

Here are some of the solutions and how respondents rated them:

* Increasing the patient's cost share. Sixty-nine percent of the respondents gave this solution a rating of 1 or 2. …

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