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Analysis

Healthcare Marketing Expenditures Increase $12.2 Billion Over Past Two Decades

By Christopher Cheney  
   January 11, 2019

Pharmaceutical company marketing to healthcare professionals accounted for the largest portion of spending, set at $20.3 billion in 2016.

Spending on healthcare industry marketing has increased sharply over the past two decades, rising from $17.7 billion in 1997 to $29.9 billion in 2016, research published this week shows.

In healthcare, marketing often raises ethical and professional concerns such as "detailing visits" by company marketing representatives to physician offices that can include gifts for doctors and staff.

Growth in spending on advertising mirrors expansion of medical services and therapies, the researchers wrote.

"Increased medical marketing reflects a convergence of scientific, economic, legal, and social forces. As more drugs and devices and medical advances convert once-fatal diseases into chronic illnesses and with renewed interest in prevention for some diseases, the marketing of tests, treatments, and services has expanded," they wrote.

The research published in Journal of the American Medical Association has several key findings.

  • The steepest increase in marketing expenditures was in direct-to-consumer advertising, which increased from $2.1 billion in 1997 to $9.6 billion in 2016.
     
  • Drug maker marketing to healthcare professionals accounted for the largest portion of spending, increasing from $15.6 billion in 1997 to $20.3 billion in 2016. The expenditures included $13.5 billion for free samples, $5.6 billion for prescriber detailing visits, and $979 million for direct payments to physicians such as speaking fees and meals.
     
  • Advertising of health services rose from $542 million in 1997 to $2.89 billion in 2016. Health systems and hospitals accounted for the highest portion of direct-to-consumer health services advertising, with direct-to-consumer advertising expenditures for cancer centers rising from $18 million to $200 million.

"Although spending on DTC advertising for prescription drugs and health services increased the fastest, spending on pharmaceutical marketing to professionals consistently accounted for most promotional spending, despite efforts to limit industry entanglements," the researchers wrote.

Curbing unscrupulous marketing
 

The research article's supplement includes a list of recommendations to limit unscrupulous marketing techniques in the healthcare sector. For health services, three recommendations are proposed.

  • Replicate the Food and Drug Administration's Bad Ad program to encourage clinicians and consumers to report misleading health service ads to the Federal Trade Commission and state attorneys general
     
  • Have the Joint Commission conduct proactive review of hospital ads 
     
  • Encourage health system and hospital marketing departments to take "truth in advertising" pledges and mandate submission of ads to a third-party reviewer for independent assessment prior to distribution

Several other recommendations directly involve health systems, hospitals, and physicians.

  • Healthcare organizations should discourage physicians from accepting payment to prescribe advertised tests and require physicians identified through companies to tell patients how they are being paid
     
  • At the state and healthcare organization level, restrictions or bans should be established on pharmaceutical company detailing visits and gifts to clinicians
     
  • Health systems and hospitals should forbid faculty participation on pharmaceutical company speaker bureaus
     
  • Public reporting of pharmaceutical industry payments to physician assistants, nurse practitioners, nurses, pharmacists and patient assistance charities—set to start in 2022—should be expedited.

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.


KEY TAKEAWAYS

The growth in advertising spending matches the expansion of medical services and therapies over the past two decades.

Spending on direct-to-consumer advertising experienced the sharpest increase, reaching $9.6 billion in 2016.

Health systems and hospitals can take proactive measures to curb unethical or unprofessional marketing activity.


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