GAO: Drug ads not causing price hikes - Broadcasting & Cable

GAO: Drug ads not causing price hikes

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Consumer advertising for prescription drugs isn't resulting in price
increases, the General Accounting Office reported Wednesday.

Consumer spending on advertised drugs has increased faster than on
nonadvertised drugs, but most of the increase is the result of greater
utilization, and not price increases, said the GAO, the watchdog arm of
Congress.

Between 1999 and 2000, the number of prescriptions dispensed for the most
heavily advertised drugs rose 25 percent, but they increased only 4 percent for
drugs that were not heavily advertised. Over the same period, prices for heavily
advertised drugs rose 6 percent while prices for others climbed 9 percent.

Direct-to-consumer advertising has come under fire from some health experts
who said the ads -- mostly TV spots -- needlessly boost sales of name brands
over less expensive generics.

The GAO did say that the Food and Drug Administration needed to be more
diligent in rooting out misleading ads. Although companies are quick to cease
airing ads that regulators deem misleading, some repeatedly disseminate new
misleading ads for the same drug.

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