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Drug Companies Spending Millions on Advertising

By: Source: AARP.org Date Posted: 2004-07-27 15:33:00-04:00

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Pharmaceutical companies are allocating more and more of their budgets to advertising direct to consumers. Last year's Super Bowl featured ads for Cialis, Viagra and Levitra. In the first five months of this year, the manufacturers of those drugs spent a total of $265 million to advertise them to consumers.

Who's Picking Up the Tab?

AARP has been tracking just how much companies have been spending on advertising to the public with a special focus on the medications most used by older people. What the tracking found was that drug companies are spending astronomical amounts on "educating" consumers.

AARP's new drug pricing study, "Trends in Manufacturer Prices of Brand Name Prescription Drugs Used by Older Americans—First Quarter 2004 Update," found dramatic increases in prices for some of the same drugs that are being advertised at great cost. While there is no direct connection between advertising and pricing, the facts beg the question of who's picking up the tab.

Advertising vs. Pricing

Between January 1 and May 30 of 2004, Bristol-Myers Squibb spent about $35 million on advertising Plavix, a blood thinner. In the first three months of 2004, the price charged by manufacturers to wholesalers for Plavix rose by 7.9%. Bristol-Myers spent about $7.2 million in the first five months of 2004 to advertise Pravachol, a cholesterol-lowering drug. It rose in price in the first quarter by 7.0%.

Merck spent $42 million to advertise Zocor, another cholesterol-lowering drug, during the first five months of the year. Although the price charged to wholesalers in the first quarter remained steady, between 1999 and 2003, it rose 25.8%.

Some of the drugs that were advertised heavily and saw price increases included:

Find Out More

To learn more about AARP's latest research on pharmaceutical drug pricing, check out the "AARP Rx Watchdog Report: A Consumer Newsletter on Prescription Drug Costs."

Other Resources

The following Medicare information is available by downloading free PDF files using Adobe Acrobat.

• Medicare Changes That Could Affect You
• Medicare Drug Discount Card: What You Need to Know
• Medicare Drug Discount Card: Helping Those With Limited Incomes