Dutch join backlash at expensive drugs by making their own

Re:Dutch join backlash at expensive drugs by making their own by mft_ on Saturday March 09, 2019 @08:07AM (#19345931)

Do you really think that the marketing spend doesn't result in greater returns than without the spend in the first place?

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.

[ Parent | on HN ]

Re:Dutch join backlash at expensive drugs by making their own by sykho on Saturday March 09, 2019 @09:00AM (#19346123)

In European countries the marketing spend is essentially zero for all companies since they are banned from advertising. As you say, marketing clearly does increase profits for the pharmaceutical companies in the U.S. 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. My wife is a physician and listening to her and her colleagues they all hate drug company TV commercials.

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.

[ Parent | on HN ]

Re:Dutch join backlash at expensive drugs by making their own by mft_ on Saturday March 09, 2019 @12:41PM (#19347341)

> In European countries the marketing spend is essentially zero for all companies since they are banned from advertising.

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.

[ Parent | on HN ]

Re:Dutch join backlash at expensive drugs by making their own by vonmoltke on Saturday March 09, 2019 @09:08AM (#19346151)

> In European countries the marketing spend[ing] is essentially zero for all companies since they are banned from advertising.

Companies are prohibited from advertising to doctors? I thought it was just direct-to-consumer.

[ Parent | on HN ]

Re:Dutch join backlash at expensive drugs by making their own by sykho on Saturday March 09, 2019 @09:35AM (#19346272)

It appears you are correct. Direct to consumer advertising is heavily regulated but not outright banned. In Germany in 2017 the advertising expenditure was around 1.6 billion euros. In 2017 advertising expenditures in the U.S. were 24 billion dollars. There appears to be a big disparity in advertising amounts in the EU vs. the U.S. Germany’s population is more than 1/5 the population of the U.S. and spends far less than 1/5 of the U.S. advertising budget.

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...

[ Parent | on HN ]