In 2008, pharmaceutical companies spent more than 50 billion dollars on drug promotions. Put a different way, that’s 50,000 Super Bowl commercials, or one enormous diamond-studded statue of the Cialis bathtub couple.
As it turns out, drug companies spend vastly more money on marketing than they do on research and development.
But to be fair, it takes a whole lot of ad dollars to sell brand-name drugs. After all, they’re legally identical to their “bioequivalent” counterparts.
So here’s what’s happening: after the initial drug patent has expired (20 years pre-clinical trials), drug companies have to spend billions to maintain their market share–which isn’t easy when Plavix costs five dollars per dose, and the Plavix biosimilar costs three cents.
But with a 50 billion dollar budget, the marketing works, and consumers (particularly American consumers since we’re one of, if not the only nation that doesn’t regulate drug prices) end up buying the brands they see on TV.
Only now, Senators Franken, Brown, and Whitehouse are proposing an end to the federal tax deduction for prescription drug marketing, as part of the current health care reform legislation.
Not surprisingly, the 4As and the AAF are up in arms, since this type of policy change could increase the cost of drug marketing by 35%.
Franken argues that tax payers shouldn’t have to subsidize pharmaceutical marketing campaigns while their own health care options remain cost-prohibitive.
I’ll be floored if this type of stipulation is ever approved in the Senate. But if it is, it’s bad news for a host of other ad agency cash cows that might lose their marketing tax deductions (fast food, alcohol, cigarettes).
Then again, if we started penalizing every business that’s detrimental to society, they’d have to close down Las Vegas.
Tags: I'm Not a Doctor But I Play One on the Internet