Plavix: DTC Ads Did Not Ramp up Drug Use, But DTC Launch Coincided With Price Bump

It's been implied that direct-to-consumer (DTC) advertising of prescription pharmaceuticals is a major cause of rising healthcare costs generally and of rising expenditures for drugs specifically. For example, in mid-October, NPR's "Morning Edition" ran a piece in which DTC ads were correlated with rising prescription drug use among Americans and associated costs. But the NPR show failed to note that spending on DTC ads has actually decreased since 2006, while drug costs have grown annually at an average rate of about 7% [1].

To more thoroughly examine the possible effect that DTC advertising has on prescription drug use and costs, US and Canadian researchers examined reimbursement for clopidogrel (Plavix; BMS/Sanofi) [2], a blockbuster antiplatelet launched in 1997, in the US Medicaid program before and after the advent of DTC advertising in December 2001. The results of their study are available in the latest issue of the Archives of Internal Medicine.

The crux of their findings:

Clopidogrel use: From 1999 to 2005, the trend [3] of ever-increasing clopidogrel use (units dispensed per 1000 Medicaid enrollees) did not change significantly after the fourth quarter of 2001, when DTC advertising began.

Medicaid reimbursement per clopidogrel unit dispensed: DTC advertising for clopidogrel was associated with a significant one-time bump in Medicaid reimbursement for the drug ($0.40 per unit). However, the slope of the line depicting increasing reimbursement for the drug remained unchanged after this bump.

Total Medicaid reimbursement: Owing almost exclusively to the price bump, the quarterly rate of Medicaid reimbursement increased significantly after the advent of DTC advertising for clopidogrel. Quarterly rate increases in Medicaid reimbursement for clopidogrel use: before DTC advertising, $95.68 per 1000 enrollees; after DTC advertising, $136.26 per 1000 enrollees. The increased total reimbursement rate resulted in an additional $207 million Medicaid dollars spent for clopidogrel use in 27 states after DTC advertising, the authors calculated.

The authors assume that the one-time bump in Medicaid reimbursement for clopidogrel use was due to an increase in the manufacturer's price (which just happened to coincide with the advent of DTC advertising); however, this assumption cannot be confirmed, because pricing data are confidential, they report. BMS/Sanofi's motives for increasing the unit cost of clopidogrel at the time of DTC advertising include an attempt to offset expenses for DTC marketing [4], the anticipation of increased sales, and general conditions of the market.

N.B.--Data after 2005 were not used in this study, because many Medicaid-eligible individuals were transferred to Medicare Part D plans in 2006.

1. According to the McKinsey Global Institute, the rise in prescription drug costs is due "almost equally" to an increased in consumed drug volume and a rise in drug costs. These increases have been offset, however, by "a [small] trend toward a less expensive drug mix."

2. Converted to 2005 USD.

3. In other words, the slope of the line depicting increasing clopidogrel use.

4. According to the authors, total DTC ad costs for clopidogrel in the United States (2001-2005) totaled more than $350 million.

Image of Plavix box from Wikimedia Commons.