Pharmac itself says medicines advertising out of control

Direct to consumer advertising of prescription medicines has contributed to a $10.7 million blowout of Pharmac's budget, Green Party Health Spokesperson Sue Kedgley said today.

Information sought by Ms Kedgley under the Official Information Act from Pharmac shows that from 2001 to 2002, dispensings of the top four pharmaceuticals that were directly marketed to consumers increased by a massive 42%. Pharmac estimates that direct to consumer advertising contributed as much as 21.8 per cent of this dramatic increase in dispensing.

In dollar terms, these four pharmaceuticals contributed an extra $10.7 million to Pharmac spending (before rebates) in 2001/2 compared with the previous financial year - a 24 per cent increase, according to Pharmac. "Given that these four pharmaceuticals were marketed intensively to consumers during this time, it is clear that a significant portion of that $10.7 million was a result of direct to consumer advertising. Pharmac itself acknowledges the likelihood of this," Ms Kedgley said.

All four directly marketed prescription pharmaceuticals are subsidised by the Government via Pharmac, and hence by the taxpayer. "These figures show that the taxpayer is effectively paying for pharmaceutical companies to increase their profits by manipulating direct to consumer advertising of pharmaceuticals," Ms Kedgley said. "The figures are further proof that New Zealand's controversial experiment with direct to consumer advertising of medicines has been a spectacular failure, and should be banned immediately."

The information provided by Pharmac includes a report by Pharmac demand side manager Rachel Wilson to the Pharmac board on 28 November 2002, in which she outlines the impact of direct to consumer advertising on pharmaceutical expenditure and dispensing volume growth.

The report states that direct to consumer advertising creates fiscal risk on the limited Government pharmaceutical budget; by driving up demand for pharmaceuticals and increasing demand for Pharmac to subsidise advertised medicines. Ms Kedgley said the report confirmed that New Zealand had the most relaxed laws for advertising drugs in the world. More than 18 prescription medicines were advertised directly to consumers in 2001, through television, radio, cinema and printed media. One company, GlaxoSmithKline spent more than $15 million on advertising pharmaceuticals in 2001.

The report also confirmed that almost 30% of advertisements failed to comply with regulatory requirements. Many did not identify precautions, contra-indications or side effects. Ms Kedgley also pointed out that the Government had not tightened controls on direct to consumer advertising of medicines, as the Minister of Health had promised to do back in August 2001.

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