The pharmaceutical industry
has become one of the largest aspects of our everyday life. This industry has
developed hundreds of life-saving drugs, curing diseases that were formerly a
death sentence to anyone who had them, such as Hepatitis C and Tuberculosis.
These same companies have also developed some of the drugs that many use on a
daily basis, such as Tylenol. There is no denying that these companies have had
an immeasurable positive impact on the world with millions of lives saved
worldwide as well as millions more cured of previously chronic diseases. But
how many more lives could this industry save if they didn’t spend so much money
of advertising?
A study from 2013 found
that 9 of the top 10 pharmaceutical companies spend more on marketing and
advertising than they did on research and development. In fact, the biggest
company, Johnson and Johnson, spend a little of two times more money on
marketing (17.8 billion dollars) than they did on actual research and development
(8.2 billion dollars). Clearly, there is much more money to be spent of
research and development. It takes around 2 billion dollars to provide enough
research to create a new drug, which means that every year, Johnson and Johnson
alone could be producing nearly 9 more drugs than it does in todays world.
Adding in all of the other pharmaceutical companies that have similar
strategies adds up to at least 50 drugs that could be produced if companies focused
all of their marketing money on research.
Of course, companies can’t
be expected to cut off marketing completely. Another recent study found that if
companies stopped advertising, they would lose at least half of their profits.
This would likely affect the budget for research even more negatively than the
status quo does, so advertising is certainly necessary in order for research to
happen. Companies wouldn’t but shut of completely because their products would
still be sold at pharmacies and prescribed to patients by doctors and such, but
the era of people buying as many drugs as possible in order to stay “healthy”
would likely come to an end. This would also likely bring to an end many of the
major innovators in the industry who rely on marketing to both the public and
marketing to the doctors themselves in order to sell their products.
Essentially, forcing an end to all marketing would also force an end to the
industry as a whole, which would in turn find us back into the 1900s, with diseases
such as Polio and the Spanish flu ravaging the countryside.
But this isn’t to say
that there isn’t some kind of in between. Even cutting marketing budgets in
half, which would still leave billions of dollars for marketing in most companies,
would allow for the creation of hundreds more drugs over the next several
years. Companies would likely profit just as much in this scenario, as many of
these companies would find themselves creating other life-saving drugs with
their extra money, and the profit generated off of these drugs would make up
for the profit lost in marketing while still benefiting the public much more
than it would have otherwise. More importantly, companies would create more drugs
for diseases that need curing, such as Cancer or Ebola. The way to do this is
to spend less money on their marketing and advertising than they do now and to
focus more on innovation.
Companies also need to stop marketing and creating "Me too" drugs that carry no weight or innovation. For instance, AstraZeneca marketed a drug that should have never been approved in the first place: Nexium. Although Nexium provided no further benefit or innovation already provided by their previous drug, Prilosec, this Copy Cat managed to make their way to the market and renew their patent. As a result, they earned more than 48 billion dollars. Think about it, 48 Billion dollars on a drug that, although marketed as more effective, contained no benefit to the consumer.
ReplyDeleteOverall, as the author and presumably an expert on this topic, do you believe that we can depend on these pharmaceutical companies.
The fact of the matter is is that we shouldn't take an entire market into account due to a single product. Here's why:
ReplyDeleteRegulation causes loss of innovation. A recent Forbes article found that imposing price controls on pharmaceuticals would likely result in an average of .7 years taken off the average persons lifetime. While this may not sound like much, the impact in NA and Europe alone adds up to nearly 900 million total years of lost life. Furthermore, according to NPR, only half of this population actually uses pharmaceuticals, meaning that in reality over a year is taken off of the lives of those who use pharmaceuticals because of price regulations. Now you may be asking yourself “Where is the connection between loss of life and price regulations?” The basic reasoning behind this is that price controls force the prices of drugs to go down. When the prices of these drugs go down, companies don’t see the reason to create these new drugs as much as they would otherwise. Therefore, companies do not create the drugs necessary to save lives. Often times these drugs cost 2 billion dollars and over 10 years to develop. Why would these companies make these drugs if there is simply no reward? As it turns out, they wouldn’t, as a recent study found that if America had imposed price controls between 1986 and 2004, America would have produced 117 less drugs. What the proposition is proposing is that we save American consumers a few dollars at the expense of years off of their lives as well as a loss of new drugs coming into production. This is a lose-lose situation for both the customers and the companies.
Subpoint B: Regulation causes a worldwide loss of life. Any major impact to the American pharmaceutical industry affects the rest of the world. America develops over 50% of the world’s new pharmaceuticals, a number which has been steadily rising. If American companies stop investing in pharmaceuticals, the world would lose its primary source of new drugs, which would likely be detrimental the health of the world, ultimately resulting in the loss of millions of lives. And why? To save American consumers a few dollars. We can’t afford to put these price regulations on the industry now. The industry needs the money now more than ever. Over recent years, the antibiotics that are developed by the pharmaceutical industry that we rely on are becoming less and less effective. In fact, gonorrhea, a disease that we used to be able to rely on curing through the help of antibiotics, has developed a new strain that is completely resistant to antibiotics. Gonorrhea is only one of these diseases. Others include methicillin-resistant Staphylococcus aureus (MRSA), vancomycin-resistant Enterococcus (VRE), multi-drug-resistant Mycobacterium tuberculosis (MDR-TB), carbapenem-resistant Enterobacteriaceae (CRE) gut bacteria. The pharmaceutical industry needs the money to develop drugs to battle diseases such as these, diseases that threaten the lives of those around us, diseases that need the pharmaceutical industry to stop them. A recent Washington post article found that over 2 million Americans get sick from antibiotic-resistant bacteria. 23,000 of these people die. The development of new drugs from the pharmaceutical industry is the only way have a chance to save these people, and putting price controls on the industry makes developing these drugs even more difficult than before, possibly allowing the creation of even more antibiotic-resistant bacteria and killing even more people worldwide. The pro is putting a price on the lives of not only those in America but those around the world. In the con world, the people of the world as a whole live longer, and although American consumers may have to pay more for medicine, the world as a whole benefits.
This is assuming that the way the government would implement these cuts to marketing through price controls or some other form or regulation, of course.
Damon has a point. Me too drugs can make up as much as 80% of all new drugs created meaning that most of the money spent on advertising is going to remarking already existing . Price controls would bring costs down, but less money would go to R and D and more to getting a quick buck from me too drugs. Governments do need to step in to bring down costs, but there are many issues with simply placing price ceilings on the pharma industry.
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