Impacts of Expansion of Public Health Insurance on Drug Marketing

Background and Aims: Expansions of eligibility for Medicaid undertaken through the Affordable Care Act (ACA) have been increasing insurance coverage and access to care; however, its potential impacts on the pharmaceutical industry’s drug marketing practices are unclear. Economic theory suggests that increased access to care due to Medicaid expansion might increase the number of Medicaid drug prescriptions. Therefore, Medicaid expansion might increase drug marketing due to its potential increased returns on investments. The present analysis aimed to examine the impacts of Medicaid expansion on drug advertising and promotional activities including provider-directed marketing and drug advertising across media channels. Design: Data on all promotions by pharmaceutical companies directly to US physicians (Open Payments database) were linked to the National Plan and Provider Enumeration System in order to collect physician-level characteristics and analyzed using difference-in-difference regressions and event study analyses. Drug advertising data of the top 100 markets (designated market areas) in the US were obtained from one leading media intelligence company, Kantar Media, and examined in market-level difference-in-difference regressions. Measurements: The first outcome variables were frequency and dollar amounts of payments received by each prescriber by month for all drugs. The second outcome variable was the estimated dollar amount spent by drug companies to purchase advertising space in magazines, TV, the Internet, newspapers, and radio. Findings: Comparing Medicaid expansion and non-expansion states for the pre-ACA period (August 2013 – December 2013) and the post-ACA period (January 2014 – December 2017), Medicaid expansion did not result in significant changes in provider-directed marketing for all drugs (the coefficient is positive but not significant). We found positive impacts of Medicaid expansion on frequency of provider-directed marketing among physicians who practice in states with the top 25 percent by proportion of Medicaid population enrolled in managed care (1.2 percent increase, p<0.01). No similar effect was found among physicians in states with the bottom 25 percents. We found positive and larger impacts on dollar amounts of payments received by physicians in the bottom 25 percent states (4.1 percent increase, p<0.01) compared to their impacts on physicians in states with the top 25 percent (2.1 percent increase, p<0.001). Interestingly, Medicaid expansion led to a significant increase in frequency of provider-directed marketing for drugs which have been highly demanded by Medicaid eligible groups (5 percent increase, p<0.05). We identified the top drugs demanded by Medicaid eligible groups using the 2013 Medical Expenditure Panel Survey (MEPS) data. Conclusions: Medicaid expansion did not significantly increase overall drug marketing from 2013 to 2017. Medicaid expansion led to a significant increase in frequency of provider-directed marketing for drugs that were highly demanded by Medicaid eligible groups.