Marketing versus Research and Development
More than 90,000 drug reps, 50% more "detail men" than there were 4 years ago, now roam the halls of our hospitals providing the free lunch, symposia, samples, and marketing pamphlets. 1 And this method of marketing is extremely expensive, about $150-$200 dollars per visit for a 4 minute visit (on average). 2 Meanwhile, every lunch eaten, every gift accepted, every detailing visit inevitably adds to the overall cost of drugs.
Marketing, R&D and Industry Profits on Trial
Drug prices continue to rise at alarming rates. The industry claims that Americans are forced to pay for high priced pharmaceuticals to offset the incredible expense of research and development (R&D). And yet, the number of research jobs in the pharmaceutical industry has remained virtually the same since 1995. By contrast, the number of marketing jobs has increased by more than 60%. 3
In addition to job distribution, pharmaceutical companies clearly place more financial backing towards the marketing of their drugs rather than researching and developing new drugs. The top nine U.S. drug companies in 2001 were spending only 11 percent of sales on research and development (far less than profits) while 27% of sales revenue was going towards "marketing and administration." 4
For most of the past decade, the pharmaceutical industry has been the most profitable in the United States. A startling statistic: in 2002 the combined profits for the ten drug companies in the Fortune 500 ($35.9 billion) were more than the profits for all the other 490 businesses together (33.7 billion). In a industry which such exorbitant profits, surely the cost of drugs could be lowered drastically without even coming close to cutting a R&D budget. .
Has R&D funding led to innovative discoveries of new drugs? The new drugs produced in 2002, for example, demonstrate that recent R&D has hardly fostered innovation. Of the seventy-eight drugs approved by the FDA in 2002, only seventeen contained new active ingredients. Furthermore, the FDA classified only seven of these as improvements over older drugs. The other seventy-one drugs were marginal variations of existing drugs (commonly referred to as "me-too" drugs). 5
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