Spending on marketing vs R&D
The subject of pharma spending on R&D versus Marketing is one that comes up frequently. Recently FierceBiotech has had an article on this.
Here is the link to the PLoS Medicine journal they refer to.
It makes for some interesting reading. I personally think that there tends to be a discussion more on what should or should not be included as “marketing expenses” and the big picture tends to get overlooked. Maybe this is the tactic that is being used to avoid talking about the real issue.
The article does a good job I feel of at least explaining how they came up with their numbers. I’m sure there will be debate on what they decided to include and some of their assumptions but the very fact that it confirms the suspicions of the public will mean it will be readily accepted.
Their figure is $57.5 billion spent on promotion or 24.4% of every dollar versus $31.5 billion for R&D or 13.4%. THis means there is almost twice as much (1.8 actually) spent on promotion over R&D.
Here is the conclusion from that article.
From this new estimate, it appears that pharmaceutical companies spend almost twice as much on promotion as they do on R&D. These numbers clearly show how promotion predominates over R&D in the pharmaceutical industry, contrary to the industry’s claim. While the amount spent on promotion is not in itself a confirmation of Kefauver’s depiction of the pharmaceutical industry, it 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 article make the point that according to their figures the industry spends twice as much on promotion as it does on R&D. This will be controversial since it is counter to the common claim made by the pharmaceutical industry and confirms some of the perceptions of the man on the street.
I personally feel and have stated here several times that the industry as a whole does not seem to take seriously the perceptions on the street and the industry’s very actions taken to counter some of these perceptions only serves to reinforce some of those negative images out there. The industry seems to forget that perception matters and can be very damaging.
Technorati Tags: drug cost, drug marketing
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