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Health care industry spends $30 billion a year pushing its wares, from drugs to stem cell treatment

Liz Szabo, Kaiser Health News on

Published in Health & Fitness

Hoping to earn its share of the $3.5 trillion health care market, the medical industry is pouring more money than ever into advertising its products -- from high-priced prescriptions to do-it-yourself genetic tests and unapproved stem cell treatments.

Spending on health care marketing doubled from 1997 to 2016, soaring to at least $30 billion a year, according to a study published Tuesday in JAMA.

"Marketing drives more testing. It drives more treatments. It's a big part of why health care is so expensive, because it's the fancy, high-tech stuff things that get marketed," said Steven Woloshin, co-director of the Center for Medicine and Media at The Dartmouth Institute for Health Policy and Clinical Practice. His study captured only a portion of the many ways that drug companies, hospitals and labs promote themselves.

Advertising doesn't just persuade people to pick one brand over another, said Woloshin. Sophisticated campaigns make people worry about diseases they don't have and ask for drugs or exams they don't need.

Consumer advocates say that taxpayers pay the real price, as seductive ads persuade doctors and patients alike to order pricey tests and brand-name pills.

"Whenever pharma or a hospital spends money on advertising, we the patients pay for it -- through higher prices for drugs and hospital services," said Shannon Brownlee, senior vice president of the Lown Institute, a Brookline, Mass., nonprofit that advocates for affordable care. "Marketing is built into the cost of care."

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High costs ultimately affect everyone, because they prompt insurance plans to raise premiums, said Diana Zuckerman, president of the National Center for Health Research, a nonprofit that provides medical information to consumers. And taxpayers foot the bill for publicly funded insurance programs, such as Medicare.

"These ads can be amazingly persuasive, and they can exploit desperate patients and family members," said Zuckerman, who was not involved in the new study.

Drug companies spend the bulk of their money trying to influence doctors, showering them with free food, drinks and speaking fees, as well as paying for them to travel to conferences, according to the study.

Yet marketers also increasingly target consumers, said Woloshin, who wrote the study with his wife and longtime research partner, Dartmouth's Dr. Lisa Schwartz, who died of cancer in November.

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