Healthy Skepticism Library item: 12328

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Big pharma’s promotional spend double that of R&D – study
PharmaTimes 2008 Jan 7
http://www.pharmatimes.com/worldnews/article.aspx?id=12561&src=EWorldNews

Full text:

The US pharmaceutical industry is spending almost twice as much on promotion as it does on R&D, contrary to the claims made by drugmakers, according to a new report.

The study, which was carried out by researchers at York University in Toronto, Canada and is published in PLoS Medicine, is based on the 2004 reports from the international market research firms IMS Health and CAM Group. The two bodies obtain their information from different sources, however, with the former surveying pharmaceutical firms, while CAM consults doctors.

This leads to “a significant discrepancy” in the data they come up with, say co-authors Marc-Andre Gagnon and Joel Lexchin. CAM reported total promotion spending by the US pharmaceutical industry as $33.5 billion for 2004, while IMS puts the figure at $27.7 billion. Thus the study makes allowances for these methodological differences and arrives at a figure of $57.5 billion for promotion, or $61,000 per physician during 2004.

In comparison, the study, The Cost of Pushing Pills: A New Estimate of Pharmaceutical Promotion Expenditures in the United States, quotes a report by the National Science Foundation which says that the R&D spend for 2004, was $31.5 billion. Furthermore, as a percentage of US domestic sales of $235.4 billion, promotion consumes 24.4% of the sales dollar versus 13.4% for R&D.

The authors go on to note that “even our revised figure is likely to be incomplete”, as there are other avenues that would not be captured by either IMS or CAM, such as ghostwriting and illegal off-label promotion. Also, items with promotional potential such as “seeding trials” or educational grants “might be included in other budgets and would not be seen in the confidential material provided to CAM’s validation committee”.

The authors conclude that the study “confirms the public image of a marketing-driven industry and provides an important argument to petition in favour of transforming the workings of the industry in the direction of more research and less promotion”.