This is a _myth_
Big Pharma is an insanely inefficient structure for turning money into useful R&D results.
Big Pharma often spends on the order of 25-30% on marketing, vs 15% on R&D. From societal standpoint this is horribly inefficient considering that most medical costs are paid for communal money via taxes and/or insurance programs.
R&D should be paid by government funds. Testing should be transparent and open. Production should be done by private companies. This would be a significantly more efficient use of our money. It would also align R&D expenditures much better with actual costs to society for medical issues.
Are you contending that the non-profit CF Foundation is going to take their $3B and not do something useful with it to serve the CF population?
> For well over a decade, CFF has employed a venture philanthropy model that provides upfront funding to pharmaceutical companies to help reduce the financial risk associated with the development of drugs to treat CF. As a result, the organization has a pipeline of drugs in various phases of development and reinvests the funds from any royalties it owns to advance drug discovery and efforts to find a cure.
> The proceeds of the sale will dramatically accelerate and expand the foundation’s research, care, and patient programs and significantly boost its funding of research targeting the genetic cause of CF. The organization also plans to use the funds to strengthen the specialized care and support that people with CF and their families receive at more than one hundred and twenty centers across the country and to expand its resources for people with CF and their families.
The typical argument for justifying high drug costs is that it costs lots of money to do R&D. This argument loses weight when the marketing costs are twice the R&D costs. Further to this point is the fact that the actual discovers aren’t the ones getting the big rewards of their discoveries. So it all appears inefficient in ways that don’t matter when applied to Google due to the fact that ultimately we are talking about peoples’ financial and physical health.
That is also a myth, perpetuated by people who do not understand how to read an income statement. Please provide a source for that, and if the source is or is using the SG&A line from an income statement, it's wrong.
If a company could increase its bottom line by cancelling marketing spend, that's an easy equation to figure out.
Or... maybe (profit after marketing - marketing spend) > (profit without marketing).
And as (in a reasonable stable company) the research spend will be related to profit... marketing spend likely does result in more money being available for research.
The current system seems to incentivize companies to hold on to patents by making minor, insignificant changes to drugs to maximize profits. They are incentivized to ignored exotic diseases that have too small of a market share for each individual disease but affect, collectively, a lot of people. There is also the fact that in a system like the U.S. where people have large out of pocket expenses at the point of contact with the health care system having companies maximize profits for a particular life saving drug causes some people to view said maximization with disgust.
Advertising direct to the public is banned in many countries, but not the US - I assume this is what you're referring to. However, pharma companies can and do spend billions on marketing to healthcare professionals within the EU.
> However, from a societal point of view it seems to me that it is much better for society for there to be no marketing of drugs.
Your point about the societal value of drug marketing is complex. In some cases, I totally agree with you that it's not money well spent - selling one beta blocker or statin against five others with broadly comparable data hardly helps the cause of humanity. However, in other cases the marketing/sales actually helps ensure that patients are given the drugs that they need - doctors aren't infallible, and not all doctors are created equally.
> The current system seems to incentivize companies to hold on to patents by making minor, insignificant changes to drugs to maximize profits.
This is actually relatively rare.
> They are incentivized to ignored exotic diseases that have too small of a market share for each individual disease but affect, collectively, a lot of people.
Like it or not, the overall cost of discovering a drug, then testing it all the way through the many phases over many years, is roughly billions. Rare diseases can be ignored because it's simply not sensible business to develop drugs for them. Unless a company can find a way of charging a very high price, or find short cuts to development, or the current system of regulations is eased, this won't change.
Companies are prohibited from advertising to doctors? I thought it was just direct-to-consumer.
From [1] it appears that U.S. sales for pharmaceuticals are double the figure for the EU. This suggests that advertising, lack of regulatory controls on pricing, and R&D account for this. Since medical costs are exspensive in the U.S. at the point of contact and the U.S. spends twice per capita GDP on healthcare people are indignant at the system and things like direct to consumer advertising is an easy target for our ire.
I don’t know if English is your native language but “marketing spend” is correct and “marketing spending” is not.
[1] https://www.efpia.eu/media/361960/efpia-pharmafigures2018_v0...
