Monday, January 14, 2008

Where Does Big Pharma Spend Its Money?

news you may not knowYeah - It's Going To Hurt...

It's the "can't live with them, can't live without them" dilemma. When you're ill, you count on the miracle of medications to ease your pain, right your ship, steady your course, shape your... sorry. The truth is, however, medications are indeed the lifeline when illness strikes.

But...

When we aren't sick, the pharmaceutical industry is often castigated for enjoying absurd profits at the expense of a captive and vulnerable clientele. Of course, the pharmaceutical companies say not so fast. They have extraordinary costs associated with research and development (R & D). Many of the drugs they explore never make it to the market, and the millions spent in development are a total loss. It's a plausible, though debatable, argument.

Until...

Researchers at York University studied the expenditures of the U.S. pharmaceutical industry. They did so through an assessment of multiple reports for 2004. This allowed them to extrapolate more accurate figures than are available in a single report.

The figures are quite telling. In 2004, Big Pharma spent over $31 billion on R & D. That's a huge amount. But, it pales in comparison to their spending on advertising and promotion: $57 billion. Yikes! The fact we're discussing figures in the Billions of dollars indicates the enormity of the market - total drug sales for 2004 were over $235 billion.

So much for the claims of R & D expense driving consumer pricing. It appears the real culprit behind skyrocketing medication prices are advertising dollars. And, of course, the previously referenced obscene industry profits.

It's a bit of a catch-22. The U.S. pharmaceutical industry produces life-changing interventions on a daily basis. They then spend billions touting their medicinal miracles. Now, if only they could develop a pill that would make advertising companies disappear…

To read more about the study, see this from ScienceDaily. To read more about adopting a healthy lifestyle - which may help you avoid the need for medications - see this from the Centers for Disease Control and Prevention.


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