Imagine you've been diagnosed with high cholesterol and your doctor is preparing to write a prescription to help remedy the problem. You could just follow your physician's advice. But maybe you've seen a couple advertisements for different cholesterol medications, and a particular drug caught your eye. Still, unqualified acceptance of an ad's claims wouldn't make you a very smart consumer. So what are you to do? Well, consult Consumer Reports, of course.
Consumer Reports has long been a gold standard in the product review field. Buyers preparing to make a purchase have used it to check the relative merits of everything from a new car from General Motors (NYSE:GM) to the latest appliance from Maytag (NYSE:MYG). The consumer products guide is venturing into new territory, though, with a Web site designed to guide drug consumers, according to USA Today. Consumer Reports' latest venture reflects a new dynamic in the drug market, one created in part by pharmaceutical companies themselves.
The site, http://crbestbuydrugs.org, uses published research studies to rate medicines based on safety and effectiveness but pays special attention to pointing users to the cheapest option, including over-the-counter products. For example, the site suggests generic lovastatin for patients who need to lower their cholesterol by less than 40% over branded drugs from Pfizer (NYSE:PFE), Bristol-Myers Squibb (NYSE:BMY), Merck (NYSE:MRK), AstraZeneca (NYSE:AZN), and Novartis (NYSE:NVS).
Not surprisingly, the pharmaceutical industry's reaction to the Web site has reportedly been lukewarm. To some extent, though, drug manufacturers are reaping what they have sown. Appealing directly to consumers may have helped lift sales. But slick ad campaigns also have helped transform prescription medicines into something closer to a commodity. Just as they would when preparing to buy a new car or TV, consumers now are working to educate themselves and find the best product for the lowest price.
In the end, the lesson for pharmaceutical outfits may be that advertising to consumers is not worthwhile. Unfortunately, the Pandora's Box they have opened now can't be shut. Consumers will seek out more information than ever before on cost and effectiveness, which means that drug makers' money will best spent on research, not on Madison Avenue.
Fool contributor Brian Gorman is a freelance writer living in Chicago. He does not own shares of any companies mentioned here.
