February 21, 2011

Buyer Beware

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Udow Phillips2014

Marianne Udow-Phillips

Center for Healthcare Research & Transformation

Many people search websites for information about their health concerns. But, there are many health oriented websites to choose from and consumers don’t always have good ways to sort out the information they are reading. For example, the New York Times magazine ran a small but significant story on the difference between WebMD and the MayoClinic websites. The Times reported on the hearings on WebMD held by Senator Chuck Grassley of Iowa. In those hearings, the connection between WebMD and pharmaceutical manufacturers was documented in some detail. And, the advice given on that website seems shaped by that connection – directly promoting pharmaceutical treatments to those searching for insights into their medical conditions.

The pharmaceutical industry has long been criticized for seeming to focus more on marketing than research and development. And, indeed, the industry has done an excellent job at marketing their products. For decades, the pharmaceutical industry has been a top performer when evaluated on profit margins. In 2008, the industry had the third highest return on revenues at 19.3 percent (after network communications and Internet services), according to data published on Fortune Magazine's website. Medical products and equipment were next at 16.3 percent. In contrast, in the same year, pharmacies and other health services had a three percent return, medical care facilities, 2.4 percent, and health insurance and managed care, 2.2 percent.

The industry hasn’t done anything wrong in achieving these margins: they have succeeded within the financial and regulatory structure in the US. And, there is no question that pharmaceutical products have made a huge difference in the quality of life and longevity of many people. But, there have also been serious questions raised and studies done on the balance between marketing and research and development.

The National Institutes of Health have become so concerned about the lack of new drugs in the pipeline that they have announced that they will be starting their own drug development center. With $1 billion in funding, the new National Center for Advancing Translational Sciences is designed to spark new research. And while $1 billion in funding for drug research is a relatively small number compared to the almost $46 billion spent by the industry on drug development in 2009, it is nonetheless a significant statement by the NIH.

While there is much debate on the exact amount being spent by the pharmaceutical industry on marketing, there is no question that the industry spends a lot. Indeed, some researchers believe that the industry spends more on marketing than on research and development.

All of which brings us back to the New York Times’ article about health websites. As I said, as a whole, there is nothing that the pharmaceutical industry is doing that isn’t within the rules of what they are permitted to do. And, whether or not those rules should be changed – rules related to patents, direct to consumer advertising, pricing and regulation – is a topic for another post.

What is extremely important, however, is for consumers to be aware when they are being marketed to and when they are getting impartial, unbiased information. Unfortunately, in today’s world of searches on the web, that is not always clear. So, before taking medical advice verbatim from a website, it would be well to read the fine print about sponsors, advertisers, and conflict of interest policies enforced by the site. In other words, don’t stop at researching your medical conditions: research your websites, too.

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