Monday, January 07, 2008

Big Pharma: Marketing Ain't Cheap

A fantastic post on Hooked summarizes the most recent study in PLoS Medicine that estimates drug marketing expenditures at roughly $57.5 billion annually. It is also discussed nicely on Pharmalot.

Here's my two cents. We've all heard that high drug costs are secretly a blessing because these costs support the development of newer, better drugs. Here's one example, from the Cato Institute:
It's easy to believe that drugs cost too much. At least it is if you aren't the member of my church who just died of stomach cancer; my next-door neighbor and running partner who has been diagnosed with multiple sclerosis; my friend who endured experimental chemotherapy to fight breast cancer; and my journalistic colleague killed by liver cancer last year.

For all of them, drugs don't cost nearly enough, since a higher cost would bring forth more and better means of fighting cancer, multiple sclerosis and other diseases. Yet legislators seem dedicated to restricting the availability of such pharmaceuticals.

Other scare stories are not uncommon. Even respected psychiatrists hold similar views about the kind, loving drug industry. I recall sitting in an auditorium, chowing down on lunch with a colleague as we listened to the sales pitch for Abilify. The lunch was fairly tasty and kept me mostly distracted from the slides that claimed to show that Abilify was a new drug that offered terrific benefits and little risk. To be honest, I remember little of what was actually said in the slides, as I attended many such activities, from which the information blurred into a haze which presented the basic message that incredible progress was constantly being made in psychopharmacology. At the end of the videoconferenced presentation, I was getting ready for the remainder of my day when I noticed a very high ranking official take the podium with a highly concerned expression. This official, who was supposedly an objective, highly regarded clinical scientist, then let loose with a brief speech.

He said something to the effect of: "You know, it's important to remember that it costs -- did you know that it costs 800 million dollars to make a drug like this? 800 million dollars. These companies are taking a big risk to bring us these drugs and we really need to appreciate all the effort, risk, and cost that they put into developing these great medications..." He might have uttered a sentence or two afterward but I was stuck in a state of shock and would not have noticed what he said. Now, if this highly reputed independent psychiatrist had bothered to do a little bit of research, he would have known that this figure was bogus. And this does not even count as part of the $57.5 billion that drug companies spent on marketing.

What's my point? When drug companies stump about how they channel much more money into research and development than into marketing, they are lying. Badly. I give drug companies credit for doing an excellent job at marketing. When so many of their newer products offer little to no benefit versus generic medications, it is indeed impressive that they can constantly generate blockbuster after blockbuster. The only explanation for this phenomenon is that drug companies do an amazing job of marketing. In the form of direct to consumer ads, having allegedly independent academics stump for their products based on bogus "science" (1, 2, 3, 4), disease mongering (1, 2), inaccurate medical journal ads, sexy drug reps, or just good old-fashioned payola, there is no doubt that drug companies do a fantastic job of selling their wares.

The drug company beancounters state that the best way to make money in the short-term is to spend a lot of cash on marketing. Works out just fine in the short term, but it looks like the model falls apart in the long-term. Might I suggest funneling a bit more cash into science and less into marketing if you want to thrive in the long-term?

Thanks to a couple of anonymous readers for digging up some of the research cited in this post and for the terrific Dilbert cartoon.


soulful sepulcher said...

You know CP, listening to you describe the Abilify lunch, reminds me of Fall 2005 when a psych in a hospital told me "it's a better, more tolerated drug, it's really smooth. Now, I may not be talking the 800 million dollar speech here, but I remember thinking he sounded like a car salesman. And, all the drug did was amp my daughter into insomnia and agitation, and it was removed within a week.

I appreciate these honest stories. You just cannot imagine how many times I've been outside the doors of some of these luncheons, because of where I've been in the last 2 years.

I've learned a lot, and it's nice to know not all of the professionals are cheap liars.

ladybroadoak said...

I put this one on digg. KEEP it up.

YOu really might think about posting something on OpEd News .. I could rewrite some of your stuff, but you are a much better writer. TONS of people read it.

Thanks for ALL you do.