GAO Report on DTC/Medicare spending flawed

SKIMMERS SUMMARY:

  • According to a GAO Report “Medicare Parts B and D and beneficiaries spent $560 billion on drugs from 2016 through 2018, $324 billion of which was spent on advertised drug”.
  • 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.
  • The report fails to acknowledge the role of HCPs in prescribing medications and empowered patients who may have been educated by DTC ads.
  • This report is going to lead to more calls to limit DTC advertising.

If you want a great example of government dysfunction, read the GAO report. It was clearly written by somebody who knows the cost of DTC advertising without the value.

So let’s look at the contents..

1ne: Medicare Parts B and D and beneficiaries spent $560 billion on drugs from 2016 through 2018, $324 billion spent on advertised drugs. Of the 553 advertised drugs, GAO found Medicare Parts B and D spending for 104 and 463 drugs, respectively.

INSIGHT: The most advertised drugs are the ones that appeal to the largest audiences, and seniors take and need more prescription drugs. These statistics fail to acknowledge whether a patient specifically asked for an advertised drug and/or of an HCP recommended the drug.

2wo: 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.

INSIGHT: Obviously, the person writing this report knows nothing about advertising. Of course, DTC is going to increase after approval to create awareness. There is no reason why a drug company would still do DTC after patent protection.

The report suggests that there is a correlation between DTC advertising and Medicare spending although they do acknowledge there is a growing aging population. I’m sure politicians will pick out certain quotes from this report as ammunition against DTC ads but that’s not the whole story.

What the GAO needs to ask are the following questions:

  1. What percentage of people who saw an advertised drug asked for and received the advertised product?
  2. What percentage of patients did some research online before asking about/for an advertised drug?
  3. Do DTC ads lead to increased patient knowledge of chronic health issues?

Politicians are sure to use this report to enflame consumers’ sentiment against the drug industry. To be fair, the drug industry does have some serious PR issues, but they revolve around price and the approval of drugs that show little efficacy.

As someone who has been in DTC for over 20 years, I find this report slanted and ill-informed. No wonder the trust in the Federal Government is declining.

<strong>GAO</strong> Report on <strong>DTC</strong>/Medicare spending flawed