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Marketing spend double that of R&D claims study

A Canadian study claims that drug companies spend nearly twice as much on marketing and promoting their products than on research and development

A Canadian study published in the journal Public Library of Science Medicine claims that drug companies spend nearly twice as much on marketing and promoting their products than on research and development.

Researchers from Toronto's York University found that US drug firms spent USD 57bn on promotional activities in 2004. The analysis was performed by taking data from IMS Health and CAM.

In comparison, 2004 spending on industrial pharmaceutical R&D in the US was USD 31.5bn in the same year, according to a report by the National Science Foundation, which included public funding for industrial research.

The study, entitled "The Cost of Pushing Pills: A New Estimate of Pharmaceutical Promotion Expenditures in the United States", recommends that governments should force the industry in the direction of more R&D and less promotion.

The types of marketing activities included in the analysis were free samples, direct-to-consumer drug advertising, meetings between company representatives and doctors to promote products, e-mail promotions and direct mailings.

In an interview with the Canadian Press, Steve Morgan, an expert on the economics of the pharmaceutical industry at the University of British Columbia and one of the study authors, said: "It's been known for a long time that manufacturers of prescription drugs spend more money on marketing than they do on research and development."

Morgan, who heads the programme in pharmaceutical policy at the university's Centre for Health Services and Policy Research, added that the gulf in spending in 2004, the latest year for which figures were available, had been reported for previous periods.

The reporting periods originated in commissions of inquiry held in Canada and the US in the 1950s, when politicians launched a public review of the business dealings of the prescription drug industry through the US Senate's anti-trust and monopoly subcommittee.

The authors also say that regulatory authorities could promote research, if they changed criteria for how they approve drugs. Then the drug companies would be forced to put their money into more innovative research, and the drugs that would come out of that would not need so much promotion.

Morgan added that altering the way drug firms spend on promotion would require profound changes, not just in industry practice.

Consumers and the medical profession are the true drivers behind the research-based pharmaceutical industry, not the drug companies themselves, concluded Morgan.

Based on the data provided by IMS, the Pharmaceutical Research and Manufacturers of America (PhRMA) countered by saying that pharmaceutical firms spend more on R&D than on marketing: USD 29.6bn on R&D in 2004 in the US, compared with USD 27.7bn for all promotional activities.

3rd January 2008

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