Advertising Increases Health Care Costs and Undermines Medical Ethics

Advertising was generally prohibited in medical practice until a little known unanimous U.S Supreme Court decision in 1975 known as Goldfarb.¹ This decision fundamentally changed the practice of medicine. It declared that medicine (and law) were no longer learned professions but were in the words of the court “ordinary purveyors of commerce.” The putative purpose of the Goldfarb decision was to lower health care costs through free market competition.

The Goldfarb decision placed the medical profession under the control of the Federal Trade Commission (FTC). Medical ethics henceforth were to be subordinated to free market competition. The cornerstone of free market competition is advertising which is intended to be the means by which prices are lowered.

The ink was barely dry on the Goldfarb decision when the FTC sued the American Medical Association (AMA) over its Code and Principles of Medical Ethics.² The FTC contended that the AMA engaged in monopolistic anticompetitive practices specifically where its code of ethics prohibited advertising.

AMA president Max Parrott, MD, and AMA Board Chairman Raymond Holden, MD, responded quickly to the lawsuit:

“We are somewhat hampered in responding to the FTC complaint since we received a copy of it–unofficially –only after it had been made public through the media. The complaint is directed at the AMA Code of Medical Ethics more than 100 years old. It is ironic that the FTC should attack a code devised and operated as a standard of conduct in the best interests of professionalism. Advertising by a professional is the very antithesis of professionalism (emphasis added). Physicians should not solicit patients. A patient should go to a doctor on the basis of need, not on the basis of advertising. Do patients want to be treated in accordance with the best professional’s judgment concerning their health and safety? Or do they want medical services that are sold and promoted? We think that there is enough hucksterism in medicine. And we’re going to fight it.”³

The AMA did fight the Goldfarb decision all the way up to the U.S. Supreme Court. The AMA lost in a tie vote. A tie vote means the plaintiff loses.

At the time that the Goldfarb decision became law health care costs in the U.S. were no higher than in other industrialized democracies. These countries are collectively known as the Organization for Economic Cooperation and Development (OECD). After the Goldfarb decision the U.S. shifted to managed care which was supposedly based on free market competition. Under managed care advertising was to play a crucial role in keeping prices under control. However, since the Goldfarb decision became the law of the land forty-five years ago health care costs have not declined. They have risen at far higher rate than in the other OECD countries without any measurable difference in quality of care. Per capita health care costs in the U.S. today are by far the highest in the world.⁴

The Removal of Ethical Guidelines

In its suit against the AMA the FTC demanded the removal of Section Nine in the AMA Code of Ethics which prohibited advertising. The FTC also demanded the removal of Section eight of the AMA’s Principles of Medical Ethics. Section eight was virtually a restatement of the Hippocratic Oath which declares that a physician should always act in the best interests of the patient.⁵

Thus the cornerstone of medical ethics–the Hippocratic Oath was removed–in the interests of resolving a fictitious health care cost crisis. Physicians were now free to act on behalf of commercial interests which were not necessarily in the best interests of patients.

Today the majority of physicians are owned by hospitals.⁶ And hospitals aggressively market their practices especially the most lucrative practices such as cardiology and the surgical specialties. But physicians are also personally engaged in marketing primarily for the pharmaceutical industry.

Former editor of the New England Journal of Medicine Marcia Angell, MD, was one of the first to chronicle this change in physician practices in her book “The Truth About Drug Companies.”⁷ She pointed out that authors of scientific papers published in leading medical journals were receiving compensation from drug companies. She believed this compromised their research and stated that many so called independent researchers had become nothing more than “hired hands” of the pharmaceutical industry.

Angell pointed out that even members of the Federal Drug Administration (FDA), which approves new drugs and devices, as well as members of the Advisory Committee to the FDA have received payments from drug and device companies. The researchers rationalize these payments by including conflict of interest disclosures. Disclosures of conflicts of interest do not remove bias in clinical or scientific research.

The most egregious example of the harm done by physicians being paid by drug companies is that of Russell Portenoy, MD. Portenoy was Chairman of Pain Medicine and Palliative Care at a leading hospital in New York and was a professor of medicine at the Albert Einstein College of Medicine. Drug companies especially Purdue pharmaceuticals which manufactures the opioid oxycontin paid Portenoy and his department large sums of money.⁸

Portenoy was considered a “thought leader” in medicine and was known as the “king of pain.” He and other “thought leaders” wrote many articles in leading journals stating that the risks of opioid addiction were minimal. They were so influential that regulatory agencies such as the Joint Commission for Accreditation of Hospitals⁹ and the Federation of State Medical Boards wrote guidelines for the treatment of pain which was to be considered the fifth vital sign. In many cases hospital lawyers warned physicians that they could be sued they not treat pain “properly.”¹⁰ Nurses were required to ask patients on rounds to grade their pain on a scale of one to ten and then give a narcotic accordingly. This practice still occurs today in many hospitals.

Now the U.S. has a serious opioid epidemic. Opioids are the leading cause of preventable death in the U.S. It is estimated that between one-third and one-half of patients with opioid addiction started using opioids as a result of doctors’ prescriptions. The opioid epidemic has caused tens of thousands of deaths. It is responsible for an even larger number of devastated and broken families. It affects all socioeconomic classes.

States and other plaintiffs have sued Purdue and other pharmaceutical manufacturers of opioids for hundreds of millions of dollars. And recently they sued Russell Portenoy personally. Portenoy has now turned on his erstwhile financial benefactors and has agreed to testify against the drug companies. He now claims that he too was a victim of drug advertising.¹¹

One of the class action attorneys succinctly summarizes Portenoy’s change of heart:

“Although it’s nice that Dr. Portenoy has changed his view on the use of opioids it doesn’t help the millions who have died and become addicted over the years while he was a shill for Purdue and the rest of the opioid industry.”¹²

In a recent article in the Journal of the American Medical Association (JAMA) authors Lisa M. Schwartz, MD, and Steve Woloshin, MD, found that spending on health care marketing in the U.S. from 1997–2016 increased from $17.9 billion to $29.9 billion.¹³

The authors report that “in 1996 without supporting evidence, the American Academy of Pain Medicine and the American Pain Society, both substantially funded by opioid manufacturers, issued a consensus statement endorsing opioids for chronic non cancer pain, describing addiction risk as low.”

The opioid debacle is the highest profile scandal to hit physicians and medical professional organizations but it is just the tip of the iceberg. Many medical professional organizations and societies accept money from drug and device companies. Authors Schwartz and Woloshin state “Physician consultants [serve] on advisory board that design disease awareness campaigns, develop disease management programs or participate in company-funded workshops defining diagnostic criteria and treatment thresholds.” Schwartz and Woloshin conclude their detailed study with the warning: “Despite the increase in marketing over 20 years, regulatory oversight remains limited.”

It is quite tempting for physicians who accept money from drug companies to become “shills” or in the words of Marcia Angell nothing more than “hired hands.” The monetary gain for physicians can be huge.

One hears supporters of managed care, often hospital administrators, condescendingly refer to pre-managed care medicine as a “cottage industry.” That era of medical practice had its flaws, but it did not play a major role in producing a massive opioid epidemic like the one we have today because most doctors tried to adhere to accepted ethical guidelines. In our current commercialized managed care environment everything is for sale including doctors (or as they are now called providers).

The warnings of Doctors Parott and Holden of the AMA in 1975 were prophetic. They predicted advertising would increase costs and decrease professionalism. ¹⁴

And that’s exactly what has happened over the ensuing years.