Killing drug ads won’t lower prices — it will kill innovation

The United States is one of the few countries that allows prescription drugmakers to speak directly to patients. That simple fact now fuels political calls to “ban the ads.” But restricting direct-to-consumer advertising would do more than change what runs during football games. It would shrink the flow of information to patients and push our system toward the bureaucratic throttling that has turned other countries into innovation laggards.

Advertising is part of a dynamic market process. Entrepreneurs inform consumers about new products, and when profits are high, firms have every incentive to improve quality and expand access.

The pattern is clear: The more Washington intervenes, the fewer cures Americans get.

New, cheaper treatments need to be brought to consumers’ attention. Otherwise, people stay stuck with older, more expensive options, and competition falters. Banning pharmaceutical advertising would hobble innovative firms whose products are not yet known and leave those seeking medical care less informed.

Critics warn that “a growing proliferation of ads” drives demand for costly treatments, even when less expensive alternatives exist. Yet a recent study in the Journal of Public Economics finds that exposure to pharmaceutical ads increases drug utilization across the board — including cheaper generics and non-advertised medications. In short, advertising pushes people who need care to make better, more informed decisions.

A market-based system rewards risk-taking and innovation. Despite the many flaws in American health care, the United States leads the world in medical breakthroughs — from cancer immunotherapies to vaccines developed in record time. That success wasn’t created by government decree. It came from competition: firms communicating openly about their products, fighting for patients, and reinvesting earnings into the next generation of lifesaving discoveries.

Sure, some regulations are adopted with good intentions. But drug ads are already heavily regulated, and a full ban would create serious unintended consequences — including the unseen cost of innovative drugs that will never reach patients because firms won’t invest in developing treatments they are barred from promoting.

American health care is now regulated to the point of satisfying no one. Patients face rising costs. Physicians navigate a Kafkaesque maze of top-down rules. Taxpayers foot the bill for decisions made by distant bureaucracies. Measures associated with socialized medicine continue creeping into the marketplace.

Price controls in the Inflation Reduction Act are already cutting into pharmaceutical research and development. One study estimates roughly 188 fewer small-molecule treatments in the 20 years after its enactment. The pattern is clear: The more Washington intervenes, the fewer cures Americans get.

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Photo by Andrew Harnik/Getty Images

The answer to the problems in American health care isn’t more government. It’s less. Expected profitability drives investment in biomedical research. Imposing new advertising bans or European-style price controls would mean lower-quality care, higher mortality, and the erosion of America’s leadership in medical innovation.

The United Kingdom offers a warning. Once a global leader, it drove investment offshore through overregulation and rigid price controls. Today, only 37% of new medicines are made fully available for their licensed uses in Britain. Americans spend more, but they also live longer: U.S. cancer patients outlive their European counterparts for a reason.

Discovering new drugs is hard. Every breakthrough begins with the freedom to imagine, to compete, and to communicate. Strip companies of the ability to inform patients, and you strip away the incentive to develop the next cure. Competitive markets — not centralized control — will fuel tomorrow’s medical miracles.