The marketing expense isn't necessarily avoidable.

Suppose it costs $50M to research a drug and patients will pay $1000 for a course of treatment. If you do no marketing then you get forty thousand customers and can't recover your R&D. If you spend $100M on marketing then you get two hundred thousand customers and more than recover both your R&D and your marketing expense.

Spending more on marketing can allow them to do R&D they otherwise couldn't by providing more customers to spread the R&D costs over.

I don't know if it's true or not, but looking at US movies/tv shows it seems like everyones taking medication which I doubt they actually need. Here I don't know very many people who actively take regular medication, I know that people who move here complain at how doctors are stingy with prescriptions, yet life expectancy is longer than the US.

That's true for very few physicians. The ones that are leaders in their field and do research know the ins and outs of new drugs, but your average doctor knows very little.

And in case anyone was wondering, doctors are very skeptical of drug reps and always verify anything they say before believing it. But it gives them a starting point.

It's not exactly the same as pharma, but in the medical device field salespeople are commonly in operating theatres. Clearly the surgeons doing this do not have time to "verify" what they are being told. https://www.washingtonpost.com/national/health-science/why-i...

Americans would do well to stop idolizing doctors and realize that huge numbers of them are lazy, incompetent shills who routinely do a lot of preventable damage.

Let's take this from the other side. Suppose we prohibit the marketing.

Now you have to amortize $50M in R&D over 40,000 patients instead of 200,000. So a course of treatment can't cost $1000, it has to be more than that.

Cutting out the marketing expense makes the price per patient go up.

One of the reasons why the US spends so much more than the rest of the world is because of the share amount of prescription drugs that people have. Here it's extremely hard to convince a Dr that anything other than paracetamol and rest is required for most ailments, yet life expectancy is higher than in the US.

Yes, if the advertising is total bullocks that is what happens. But getting rid of the advertising still doesn't make the price of the drug go down for the people who actually need it.

And it's at least theoretically possible for the advertising to help patients who otherwise wouldn't have known about the drug, e.g. because they asked a doctor about it years ago and there was no treatment then even though there is one now.

edited to add: especially when you look at the US R&D tax credit, available under section 41 of the tax code.

I'm sure Johnson & Johnson does spend an awful lot on marketing drugs, but boy do the details hidden in SGA sure get hand waved away.

Also, pharma increasingly buys new products through acquisitions rather than develop them in house these days. So you have to look at the balance sheet, not just the p&l. Note that JNJ spent $30B buying actelion last year among other smaller acquisitions

Second, marketing is costly since a lot of it is done in person. Hiring thousands of sales reps doesn't come cheap. It's not due to DTC commercials since only a small number of products actually have those.

Finally, you don't market something unless you bring in more money than you spend. So marketing pays for itself.