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DTC Advertising

DTC advertising is a new term that has crept into American healthcare. It stands for "direct-to-consmer" advertising. DTC advertising is highlighted in the March issue of the ACP-ASIM Observer(1), a publication of the American College of Physicians - American Society of Internal Medicine.

By direct-to-consumer advertising, drug companies create a market for themselves at the expense of the doctor-patient relationship. It has been just over a year since the FDA in the United States relaxed its restrictions to allow drug makers to broadcast drug commercials without the need for a lengthy summary of potential side effects and contraindications. Instead, broadcast advertising is required to mention only a drug’s major risks, and provide a Web address and toll-free phone number for consumers to get more information. (Print ads must still contain a "brief summary" of all of a drug’s potential downsides.) Many patients have become convinced that the products advertised are the answer to their problems, and they distrust the doctor if he says otherwise.

And while patients are pressing their doctors to write prescriptions for inappropriate drugs, American doctors are also expected by managed care plans and administrators to hold the line on spiralling prescription costs.

Managed care companies have introduced four strategies to deal with the problem. The first strategy is to implement cost management programs that target physicians. With cost management, health plans attempt to manage what physicians prescribe, mandating prior authorisation for newer, more expensive treatments.

A second strategy is to increase health insurance premiums, and analysts are already predicting a 9% increase in premiums next year, due largely to rising drug costs. But many health plans and employers are increasingly looking to two other approaches in managing pharmacy costs: re-designing their pharmacy benefits programme to determine which drugs will, or will not, be covered; and increasing prescription cost-sharing by members.

Kaiser Permanente in Oakland, Calif., for instance, announced that it would not include the impotence blockbuster Viagra, as well as other sexual dysfunction treatments, on its formulary. The HMO cited not only the high cost of such therapies but also the lack of any broad social benefits as reasons.

Kaiser has excluded coverage in 12 states and the District of Columbia, but has been ordered to cover treatments in Connecticut, New York and California. In these states, the HMO has resorted to its cost-sharing plan B: making Viagra and other sexual dysfunction treatments available with a unusually high 50% co-pay.

Other health plans are raising standard co-pay amounts, as well as creating different tiers of prescription coverage in order to pass more prescription costs onto members. One managed care company for instance, introduced a system of three co-pay tiers in late 1997. The lowest co-pay is reserved for generic drugs on the plan’s preferred drug list. The middle tier applies to branded drugs on that list, while the highest co-pay up to $35, is used for branded drugs that are not preferred. The HMO’s Pharmaceutical and Therapeutics Committee meets quarterly to consider which drugs to add to, or knock off, its preferred list. While different coverage tiers provide the level of choice employers want, they also offer advantages for physicians. By providing some coverage for even drugs that are not preferred, health plans are helping relieve some of the pressure patients are placing on doctors to prescribe drugs not covered.

When deciding whether or not to include a drug on its formulary, thus making it available to members at the middle co-pay amount, another managed care organisation considers whether the drug is being advertised to consumers. Even more importantly, it determines if a drug is considered a first-line treatment. While higher co-pays and tiered structures clearly save money for insurers and employers, health plans claim they also stimulate patient-physician dialogue about the effectiveness of different treatments.

Will the DTC wave hit Singapore too? This is food for thought. It depends on several factors, namely, the drug advertising policies in Singapore, the amount of trust the patients have in their doctors and if it needs be, the efforts of the profession to provide the mass media information to patients on the rational use of drugs.



1. Maguire P. How direct-to-consumer advertising is putting the squeeze on physicians. ACP-ASIM Observer, 1999.