Big drug companies like to tell us that the reason pills cost so much is the high cost of research and development. They claim that's a chief reason it costs $800 million to bring a successful pill to market. Well, recent research shows it's just not true.
In "The Cost of Pushing Pills: A New Estimate of Pharmaceutical Promotion Expenditures in the United States", a paper published in December 2007 in the peer-reviewed open access journal Public Library of Science Medicine, Marc-Andre Gagnon and Joel Lexicon found that U.S. pharmaceutical companies spent nearly twice as much on promotion as on research and development.
They studied data from 2004, the most recent available for their analysis. They found:
"As a percent of U.S. domestic sales of $235.4 billion, promotion consumes 24.4% of the sales dollar versus 13.4% for on R&D. In light of these numbers one can safely argue that marketing is predominant over R&D in the pharmaceutical industry, contrary to industry's claim."
Continuing in the understated style of peer-reviewed academic writing, Gagnon and Lexicon conclude that their research "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 study found that the total spent on promotion was $57.5 billion. Not including direct-to-consumer advertising and promotion toward pharmacists, the drug companies spent around $61,000 in promotion per practicing physician.
OK, we're paying for some R&D, but twice as much goes to pay to convince people to pop the pills. Drug companies need to come clean and admit they're not driven by scientists in white coats, but rather by PR and marketing professionals.
And, you and I, we're all paying for it.