Drug Industry Spends Nearly Twice As Much On Marketing Than On R&D

[Pharma Newshound]

Source: Medical News Today

The pharmaceutical industry spends almost twice as much on the marketing and promotion of drugs than on research and development, according to a new analysis in this week's PLoS Medicine.

In their analysis of data from two market research companies, IMS and CAM, Marc-André Gagnon and Joel Lexchin (York University, Toronto, Canada) found that US drug companies spent US$57.5 billion on promotional activities in 2004, the latest year for which figures were available.

In comparison, the National Science Foundation reported that in 2004 the amount of industrial pharmaceutical research and development (including public funds for industrial research and development) was US$31.5 billion in the United States.

For the last 50 years, say the authors, there has been an ongoing debate as to which image of the drug industry is most accurate. The industry promotes a vision of itself, say the authors, as "research-driven, innovative, and life-saving," but the industry's critics contend that the drug industry is based on "market-driven profiteering."

The findings of their study, say Gagnon and Lexchin, "confirms the public image of a marketing-driven industry and provides an important argument to petition in favor of transforming the workings of the industry in the direction of more research and less promotion."

The types of promotion that were included in the US$57.5 billion figure included free samples, visits from drug reps ("detailers"), direct to consumer advertising of drugs, meetings with doctors to promote products, e-mail promotions, direct mail, and clinical trials designed to promote the prescription of new drugs rather than to generate scientific data (these are known as "seeding trials").

The authors believe that their figure of US$57.5 billion is likely to be an underestimate. "There are other avenues for promotion that would not be captured by either IMS or CAM," they say. These avenues include the ghostwriting of articles in medical journals by drug company employees, or the off-label promotion of drugs.

Gagnon MA, Lexchin J (2008)
"The cost of pushing pills: A new estimate of pharmaceutical promotion expenditures in the United States."
PLoS Med 5(1): e1.
Click here to view article online

About PLoS Medicine

PLoS Medicine is an open access, freely available international medical journal. It publishes original research that enhances our understanding of human health and disease, together with commentary and analysis of important global health issues. For more information, visit http://www.plosmedicine.org

About the Public Library of Science

The Public Library of Science (PLoS) is a non-profit organization of scientists and physicians committed to making the world's scientific and medical literature a freely available public resource. For more information, visit http://www.plos.org

First let's look at what is considered "marketing costs". For example, are salespeople considered marketing and promotional costs? My guess is that would be correct. Then we need to look at what is considered R&D spending? It costs roughly $750+ million to bring a product to market which includes R&D, clinical trials, FDA requirements for NDA filing etc....

There is also a number of companies, like smaller biotech, that are spending a lot of R&D but it is not being recorded because they do have a marketable product as of yet or are not a public company. We should also not forget the dollars that are spent by government agencies in R&D.

So before we start accusing companies of not spending enough on R&D let's compare oranges to organges rather than vague numbers from reports.