A bitter pill for taxpayers: Drug ads do nothing but boost drug prices

A new study published in the Archives of Internal Medicinefound that direct-to-consumer drug advertising may be associated with increased drug prices -- and little else. Specifically, researchers looked at blood-thinner (anti-clotting) drug Plavix, which is commonly prescribed for heart conditions. They found that advertising aimed at consumers did not actually increase the use of the drug. However, because of the increased expenditure for advertising, the price of the drug increased, and so did the reimbursement cost of Plavix for Medicaid patients.

"The cost of drugs to public and private health insurance programs has been a long-standing source of concern among policy markers," wrote the study's authors, Michael Law of the University of British Columbia and his colleagues. Indeed, several members of Congress have asked the GAO recently to examine allegations of price gouging on drugs, especially in light of the ongoing debate over health-care reform legislation.