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we're here today with Wharton healthcare
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management professor Abbe Alpert to talk
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about some of her recent research Abbi
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thanks for being with us thank you so
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first of all could you give us a brief
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summary of what you studied so my
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research is in health economics and
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public finance and my recent work has
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focused on the pharmaceutical market so
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in a recent project I've studied the
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impacts of direct to consumer
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advertising for prescription drugs on
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drug utilization and rugged here ins so
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we've seen a very dramatic increase in
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the number of pharmaceutical ads on TV
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in the last two decades pharmaceuticals
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are now one of the largest categories of
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advertising on TV and over four billion
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dollars is spent on this type of
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advertising and economists have been
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interested for a long time in
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understanding the extent to which
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advertising is informative versus
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persuasive and pharmaceutical
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advertising is particularly
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controversial in this respect and there
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has been a lot of debate about its
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potential effects on patient welfare so
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on the one hand advertising may have
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informational value if it educates
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patients about available treatments
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encourages people to seek care
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especially for undirected I ignore scans
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or it may even improve communication
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between patients and their doctors for
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people who are already taking
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advertising medications seeing an ad on
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TV for your drug could serve as a
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reminder to take your medication or it
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may even enhance your perception of the
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benefits of treatment potentially
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leading to better drug adherence on the
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other hand a drug advertising may also
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lead to unnecessary overuse of
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prescription drugs and increased drug
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spending and so in this project we are
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trying to quantify the extent to which
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advertising impacts drug utilization and
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we also explore some of the mechanisms
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underlying advertisings impacts and this
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helps us to try to understand some of
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the health and welfare implications of
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advertising so to do this we use a
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natural experiment design which helps us
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get at the causal effects of advertising
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on our natural experiment is
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the introduction of Medicare Part D in
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2006 so using data from the Nielsen
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corporation we find that there was a
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sharp increase in pharmaceutical
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advertising immediately following the
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introduction of Part C and that this
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advertising was targeted to markets with
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the highest concentration of elderly so
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places like West Palm Beach Florida for
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example we also find that this
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advertising spilled over onto younger
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consumers in these markets even though
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it was targeted to the older consumers
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and that they also experienced increased
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exposure to drug ads after Part D and so
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this sets the stage for our research
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design because what we do is compare
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drug advertising before and after party
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across geographic areas with a higher or
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lower concentration of elderly and then
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we use this change in advertising
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exposure due to Part D to estimate its
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effects on drug utilization for the non
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elderly so people who are under age 65
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and not eligible for Medicare and we
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focus on the non-elderly population in
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order to isolate the effects of
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advertising on drug utilization from the
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direct effects of the Part D program so
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to give a simple example our strategy
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basically boils down to a comparison
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across areas like West Palm Beach
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Florida with a large elderly population
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and areas like Denver with a much
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younger population so young people
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living in West Palm Beach are going to
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be exposed to a larger increase in drug
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advertising after party relative to
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their peers living in Denver and then we
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test whether this also leads to a
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differential increase in drug use and
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our data on drug utilization comes from
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a very large database of insurance
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claims which covers a wide variety of
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geographic areas so after looking at
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this what were some of your key
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takeaways I mean where did you have a
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bunch of young people in West Palm Beach
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one like take I don't know a heart
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medication or like stuff that older
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people would take or I mean what did you
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find so we find substantial effects of
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advertising on drug utilization we
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estimate that
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percent in advertising exposure we
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increase the number of prescriptions
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purchased by about 5% about 70% of this
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effect is driven by increased new
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initiation and the other 30% is due to
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increase drug use among existing
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patients so in other words increased
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drug adherence and specifically we find
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that a 10% increase in advertising would
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increase the rate of drug adherence by
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about one to two percent so while
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advertising increases drug adherence
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among existing patients we also find
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that among people who initiate treatment
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because of advertising their compliance
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with treatment is actually lower on
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average and so this is a concern if
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advertising is capturing people for whom
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treatment is marginally less appropriate
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or for people who are simply less
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attached to treatment because initiating
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a treatment without complying with it
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will lead to increased drug spending
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without very many gains to health also
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another finding we have is that there
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was a large spillover effect of
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advertising on non advertised drugs
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within the same drug classes so these
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non advertised drugs are typically
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generics or off pen brands and the idea
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here is that someone sees an ad on TV
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for lipitor ask their doctor for lipitor
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but then gets prescribed another statin
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or a generic drug and so what we're
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finding is that advertising expands
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utilization for entire classes of drugs
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so could you talk to us a little bit
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about the practical implications of this
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paper I mean I could see it having
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pretty broad ones just because it
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involves both prescription drug
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companies and doctors and then also even
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patients who are seeing this stuff on TV
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so pharmaceutical advertising has been
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in the news a lot lately because the
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American Medical Association recently
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called for a ban on all direct to
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consumer advertising for prescription
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drugs the u.s. is actually only one of
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two countries in the world that allows
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this type of advertising and they argue
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that drug advertising leads
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to substitute away from low-cost generic
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drugs towards more expensive brands even
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when they're not appropriate and so our
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research can help to inform this debate
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while our findings show that advertising
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does indeed increase drug spending we
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also find that advertising may have
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health benefits because it increases
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drug adherence and also increases the
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take-up of important drugs for
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treatments like high cholesterol
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hypertension depression and others
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although we can't exactly and fully
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tease out appropriate versus
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inappropriate use in our study more
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concerning though is that we find that
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people who initiate drug treatment
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because of advertising are on average
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less compliant with treatment and so
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this could mitigate some of these health
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gains we also find that a significant
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share of the increase in drug
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utilization driven by advertising is
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actually for non advertised drugs which
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tend to be lower cost generics and
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off-patent brands another implication of
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this research is that we find that there
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were very large spillover effects of
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Medicare Part D on the non-elderly
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population outside of the Medicare
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program and these effects are large and
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important on their own it may warrant
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some consideration by policymakers I
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guess what I was wondering is I mean the
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idea if you're saying that people who
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see these ads I mean they may it may
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bring them to the doctor but it also
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might mean that they're less compliant
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but someone that came another way I
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guess what implications does this have
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for like how physicians should maybe
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treat patients that have seen this
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because of an ad if they if they know I
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mean is it sort of given give tips about
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how they might be able to mitigate some
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of those negative impacts that you think
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right so we find that people who are
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initiating treatment because of
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advertising or less adherent and so
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doctors should be potentially aware that
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people who are coming in asking for
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treatment may not be as as eligible for
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that treatment or as likely to comply
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with it and may require more monitoring
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and more assessment of whether that
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treatment is appropriate for them
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compared to someone who who the doctor
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would decide needed this treatment
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and what what's next for this researcher
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what are you going to look at next so
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our current findings show very detailed
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picture of the utilization responses to
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advertising and I think the next thing
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that I'm interested in pursuing is to
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use our research design to analyze the
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effects of advertising on health more
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directly as well as isolating
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appropriate versus inappropriate use to
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do this requires detailed data on health
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outcomes data and mortality and also
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data on more intermediate outcomes like
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hospitalizations or other clinical
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outcomes but I think that really the
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ultimate test of whether pharmaceutical
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advertising improves welfare is is its
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effects on health directly and currently
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there's very little evidence on
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advertising's effects on health and I
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think this is an important area for
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future research Abbi thanks so much for
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being with us today thank you
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you
