Direct-to-Consumer Advertising: Gauging Its Impact On Utilization, Drug Mix

Forget about Star Wars. This year, the "Force" that PBMs and plan sponsors are talking about is direct-to-consumer (DTC) advertising. Its potential impact was highlighted over and over again at PBMI's 2002 Drug Utilization Management Conference in Scottsdale, Arizona.

Experts are predicting that more than $5 billion will be spent on DTC advertising over the next two to four years. Its impact is being felt with five of the top 10 drugs among the highest dollar expenditures for advertising in 2001. In 2002, seven drugs with the biggest DTC budgets are in the top 10. This trend, with profound implications for cost and utilization, is impacting the drug mix.

A myriad of factors contributed to the 17.1% increase in retail drugs costs from 2000 to 2001: 39% was due to an increase in the number of prescriptions dispensed, 37% was related to price increases, and 24% was due to a shift to higher-cost drugs or drug mix, explained Ryan Lee, pharmaceutical data manager for United Healthcare. These data are illustrated in Figure 1.

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