WASHINGTON — When the Food and Drug Administration decided in 1997 to let prescription drug companies advertise directly to consumers on television, it unleashed a surge in demand. Patients are requesting expensive brand-name drugs more often and doctors are willingly--if not always happily--prescribing them.
The upside is that many patients are being treated with the most up-to-date medications for conditions--such as high cholesterol--that they might not have even known they had until an advertisement drew them to a doctor's office.
But the trend has a price. Americans spent $100 billion for prescription drugs in 1998, an 84% increase in five years. Two reinforcing trends are driving this worrisome component of medical inflation, and television advertising is contributing to both:
* The average price of a prescription climbed 40%, to $37.38, during the last five years, propelled in part by the cost of advertising. Overall consumer inflation during that period was only about 15%.
* Americans are consuming more medication. New and better drugs are being brought to market at a record pace, thanks to accelerated development by the drug companies and a fast-track approval system by government regulators. And advertising has encouraged consumers to buy them.
Beset by rising costs, health maintenance organizations, insurers and employers are laying most of the increase off on the public. Consumers with insurance might pay $20 toward each prescription instead of $10, and the consumers' payment might go even higher for drugs not on their health plan's list of approved medications.
"If current trends continue, this growing inflation [in drugs] will soon overtake the cost of all other health benefits," according to a recent report prepared for the Blue Cross-Blue Shield Assn., whose member health plans cover 67 million Americans. "Paying for these services will pose a major threat to U.S. employers' global competitiveness."
Patients' rising out-of-pocket costs could generate a new surge of consumer anger and result in government action. Both President Clinton and congressional Republicans have proposed adding prescription drugs to the list of services covered by Medicare, and the issue seems likely to become a major topic of debate in next year's presidential and congressional campaigns.
The dynamics of the situation are fairly simple.
