4 ms·

Nope, drugs sales in the EU alone are enough to cover pharmaceutical R&D costs worldwide. What they aren't enough to cover is Marketing costs, but that's OK si

Nope, drugs sales in the EU alone are enough to cover pharmaceutical R&D costs worldwide. What they aren't enough to cover is Marketing costs, but that's OK since most EU countries don't allow direct marketing of drugs. That's what the US covers. Not quite so noble sounding that you're covering the cost of advertising though, is it?

chimeracoder 9y ago
> Nope, drugs sales in the EU alone are enough to cover pharmaceutical R&D costs worldwide. What they aren't enough to cover is Marketing costs, but that's OK since most EU countries don't allow direct marketing of drugs. That's what the US covers. Not quite so noble sounding that you're covering the cost of advertising though, is it? I usually avoid responding to comments that are this snarky, because it's generally a strong indicator that the person isn't actually having a discussion in good faith. But I'll bend my own rule to say: 1) EU sales of pharmaceuticals are nowhere near enough to sustain the level of R&D we see globally. 2) Direct-to-consumer advertising is only one part of "marketing". Even in the US, it's not the majority of money spent on marketing. Marketing absolutely does happen in the EU, and it's a necessary part of the entire R&D lifecycle.
- phaemon 9y ago
  1) Yes they are Pharmaceutical R&D spending in 2015: USA $47B, Europe: $33B. Total drug sales Europe 2015: $190B
Feniks 9y ago
My healthcare provider always opts for the generic drugs. When that's not an option they negotiate hard with big pharma. It amuses me how in the ostensibly capitalist US nobody cares about efficiency. You would think that the insurance companies in the US would care about profits, instead billions are being wasted every year. It wouldn't even be so bad if healthcare was actually the best in the world so people would get what they pay for but it is not even close...
rayiner 9y ago
It doesn't make any sense to look at marketing as a discrete component you can separate from everything else. Drug companies don't want to spend money on marketing, obviously. They do it because it increases sales by more than what they spend on marketing. That's typically good for the consumer, because that means the fixed development cost can be amortized over a larger number of buyers. It's worth noting that most technology companies spend more on sales and overhead than R&D. For 2014-2015, the ratio between R&D spending and SG&A spending was 0.59 at Pfizer, 0.75 at Google, 0.56 at AstraZeneca, 0.43 at Apple, and 0.58 at Microsoft. Apple wouldn't be able to sell cheaper iPhones by reducing its advertising expenditures...
- rlpb 9y ago
  Marketing is mostly a zero sum game. To be successful, you have to spend more than the next company. If all companies reduced their marketing spend equally by 50%, nothing of value will be lost.
  - tptacek 9y ago
    No, not all of marketing spend is zero-sum --- even in our own industry. The alternative to many purchases isn't some other product or service, but rather nothing (and, in theory, a poorer outcome).
    - rlpb 9y ago
      > No, not all of marketing spend is zero-sum... That's why I said "mostly". The first 10% of marketing spend may well be useful. The last 10% is the case of being louder than competitors, and is zero sum. Where the line is in a particular market varies and is subjective.
      - tptacek 9y ago
        A lot of these products don't have "competitors" in the conventional sense. Their competition is an objectively inferior last-generation treatment, or in some cases no treatment at all. In other cases, there are many "competing" drugs, but they're not all efficacious on every patient, and doctors need to try different things to see which works. Obviously there are abusive cases where pharma companies are spending marketing dollars to promote products that aren't even marginally better than the alternatives. But it seems to me like there are broad cases in the industry where --- whatever other criticism you might want to level about marketing spending --- marketing simply isn't ever zero-sum.

chimeracoder 9y ago

> Nope, drugs sales in the EU alone are enough to cover pharmaceutical R&D costs worldwide. What they aren't enough to cover is Marketing costs, but that's OK since most EU countries don't allow direct marketing of drugs. That's what the US covers. Not quite so noble sounding that you're covering the cost of advertising though, is it? I usually avoid responding to comments that are this snarky, because it's generally a strong indicator that the person isn't actually having a discussion in good faith. But I'll bend my own rule to say: 1) EU sales of pharmaceuticals are nowhere near enough to sustain the level of R&D we see globally. 2) Direct-to-consumer advertising is only one part of "marketing". Even in the US, it's not the majority of money spent on marketing. Marketing absolutely does happen in the EU, and it's a necessary part of the entire R&D lifecycle.

phaemon 9y ago
1) Yes they are Pharmaceutical R&D spending in 2015: USA $47B, Europe: $33B. Total drug sales Europe 2015: $190B

Feniks 9y ago

My healthcare provider always opts for the generic drugs. When that's not an option they negotiate hard with big pharma. It amuses me how in the ostensibly capitalist US nobody cares about efficiency. You would think that the insurance companies in the US would care about profits, instead billions are being wasted every year. It wouldn't even be so bad if healthcare was actually the best in the world so people would get what they pay for but it is not even close...

rayiner 9y ago

It doesn't make any sense to look at marketing as a discrete component you can separate from everything else. Drug companies don't want to spend money on marketing, obviously. They do it because it increases sales by more than what they spend on marketing. That's typically good for the consumer, because that means the fixed development cost can be amortized over a larger number of buyers. It's worth noting that most technology companies spend more on sales and overhead than R&D. For 2014-2015, the ratio between R&D spending and SG&A spending was 0.59 at Pfizer, 0.75 at Google, 0.56 at AstraZeneca, 0.43 at Apple, and 0.58 at Microsoft. Apple wouldn't be able to sell cheaper iPhones by reducing its advertising expenditures...

rlpb 9y ago
Marketing is mostly a zero sum game. To be successful, you have to spend more than the next company. If all companies reduced their marketing spend equally by 50%, nothing of value will be lost.
- tptacek 9y ago
  No, not all of marketing spend is zero-sum --- even in our own industry. The alternative to many purchases isn't some other product or service, but rather nothing (and, in theory, a poorer outcome).
  - rlpb 9y ago
    > No, not all of marketing spend is zero-sum... That's why I said "mostly". The first 10% of marketing spend may well be useful. The last 10% is the case of being louder than competitors, and is zero sum. Where the line is in a particular market varies and is subjective.
    - tptacek 9y ago
      A lot of these products don't have "competitors" in the conventional sense. Their competition is an objectively inferior last-generation treatment, or in some cases no treatment at all. In other cases, there are many "competing" drugs, but they're not all efficacious on every patient, and doctors need to try different things to see which works. Obviously there are abusive cases where pharma companies are spending marketing dollars to promote products that aren't even marginally better than the alternatives. But it seems to me like there are broad cases in the industry where --- whatever other criticism you might want to level about marketing spending --- marketing simply isn't ever zero-sum.