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Politics : Politics for Pros- moderated
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From: LindyBill10/8/2004 4:46:57 PM
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Drug advertising is one of the first things you hear about from the left. California Insider blog

Drug ads
After this column Tuesday on prescription drug costs, I’ve received some calls and letters mentioning the cost of pharmaceutical advertising, especially those ubiquitous television ads for everything from Viagra to Flonase. If not for those big advertising budgets, readers seem to be saying, couldn’t the drug companies spend more money on research and development, or reduce prices? In a word, no.

Think about it. Companies spend money on advertising only if their research shows it benefits the bottom line. Otherwise, why bother?

Suppose we ban the ads. Fewer ads mean fewer customers for the drug companies. Fewer customers mean less revenue. Less revenue, usually, means lower profits. But it also means less money for research and development. And it’s hard to see how having less money on hand would leave the companies free to lower their prices. They might even have to raise them.

So, while the ads are irritating and some observers are quick to conclude that the ad budget diverts valuable resources to a frivolous purpose, unless you can show that they don’t work, it’s difficult to see how prohibiting advertising would ultimately help consumers.
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