4 ms·

> all the pharma companies would save millions every year. Their savings would never be passed on to the customer. And it's hard to believe there would be any

by mark-r 7y ago

> all the pharma companies would save millions every year. Their savings would never be passed on to the customer. And it's hard to believe there would be any savings overall, because the advertising must be bringing in more money than it costs or they wouldn't be doing it.

triceratops 7y ago
I'm not disputing pharma advertising is profitable for individual products. I'm skeptical if it's profitable in aggregate. Drug demand is a function of the occurrence of disease. Advertising can increase profits by: 1. Taking market share away from a competitors. Profitable for that product, zero-sum for the industry. Competitors respond by increasing their ad spend, equilibrium returns (unless one drug is genuinely superior to another) 2. Increasing demand for unnecessary medicines. Profitable for the market, bad for society. Advertising is an arms race. Even if I don't want to advertise, I have to because my competitors do. If it's banned, everyone saves the expense of advertising. Unless pharma companies are engaging in cartel-like price-fixing some of that money will definitely go to lower prices (some will also go to R&D, dividends/buybacks, and exec pay). It only takes one company to do it and the rest have to follow.
- jonlucc 7y ago
  There are two niches in which your analysis is incomplete. First, There are underdiagnosed diseases for which patients don't seek care, sometimes because they do not believe there to be a treatment. The lack of treatment means that it isn't as vital for physicians or patients to pursue diagnosis. Those patients might see an ad and return to a physician to ask if that treatment is a fit. Second, not all physicians are as on top of new treatment options as we expect. It might have slipped their notice or be in a field with which they aren't the most familiar, and those patients might benefit from revisiting whether a new treatment is a good fit. I don't really think these two cases make up for all of the advertising, but they might be missed if advertising is cut or abolished. It might have some fairly large drawbacks, but I think it would be good for pharma and biotech companies to put some amount of money into a fund based on the disease and have awareness campaigns around the diseases. For example, companies with diabetes treatments could form a group that puts out diabetes ads urging patients to talk to their physicians. It gets dicey for first-in-market treatments, but I think it would be an overall improvement from the current system. Disclaimer: I work in big pharma biology research; pricing and advertising are done in a fancier building with more marble floors, so I've thought about this a bit, but it isn't my department.
  - triceratops 7y ago
    > not all physicians are as on top of new treatment options as we expect. I thought this was called pharma marketing. I don't think this should be abolished - I only meant direct-to-consumer advertising. Although I've seen someone else argue that doctors should be required to undergo continuing education instead. I'd like to see numbers on how often an ad is how the patient learns they have a disease. I imagine that anyone with really annoying or debilitating symptoms would research them online from time to time.
    - jonlucc 7y ago
      My point about marketing to patients is that patients see the ad, think "that might be something I need", and go ask their physicians. Then the physician can look into it more thoroughly. With regard to patients searching their symptoms regularly, it is my understanding from the physicians and clinical trial folks that you would be in the incredibly small minority, but it's a good idea.
- TheSoftwareGuy 7y ago
  There is a third function I don't think you are considering: Informing patients that an option is available to treat a particular condition, who might otherwise not go to a doctor. This would also be a positive for both the market and for patients.

by mark-r 7y ago

triceratops 7y ago

I'm not disputing pharma advertising is profitable for individual products. I'm skeptical if it's profitable in aggregate. Drug demand is a function of the occurrence of disease. Advertising can increase profits by: 1. Taking market share away from a competitors. Profitable for that product, zero-sum for the industry. Competitors respond by increasing their ad spend, equilibrium returns (unless one drug is genuinely superior to another) 2. Increasing demand for unnecessary medicines. Profitable for the market, bad for society. Advertising is an arms race. Even if I don't want to advertise, I have to because my competitors do. If it's banned, everyone saves the expense of advertising. Unless pharma companies are engaging in cartel-like price-fixing some of that money will definitely go to lower prices (some will also go to R&D, dividends/buybacks, and exec pay). It only takes one company to do it and the rest have to follow.

jonlucc 7y ago
There are two niches in which your analysis is incomplete. First, There are underdiagnosed diseases for which patients don't seek care, sometimes because they do not believe there to be a treatment. The lack of treatment means that it isn't as vital for physicians or patients to pursue diagnosis. Those patients might see an ad and return to a physician to ask if that treatment is a fit. Second, not all physicians are as on top of new treatment options as we expect. It might have slipped their notice or be in a field with which they aren't the most familiar, and those patients might benefit from revisiting whether a new treatment is a good fit. I don't really think these two cases make up for all of the advertising, but they might be missed if advertising is cut or abolished. It might have some fairly large drawbacks, but I think it would be good for pharma and biotech companies to put some amount of money into a fund based on the disease and have awareness campaigns around the diseases. For example, companies with diabetes treatments could form a group that puts out diabetes ads urging patients to talk to their physicians. It gets dicey for first-in-market treatments, but I think it would be an overall improvement from the current system. Disclaimer: I work in big pharma biology research; pricing and advertising are done in a fancier building with more marble floors, so I've thought about this a bit, but it isn't my department.
- triceratops 7y ago
  > not all physicians are as on top of new treatment options as we expect. I thought this was called pharma marketing. I don't think this should be abolished - I only meant direct-to-consumer advertising. Although I've seen someone else argue that doctors should be required to undergo continuing education instead. I'd like to see numbers on how often an ad is how the patient learns they have a disease. I imagine that anyone with really annoying or debilitating symptoms would research them online from time to time.
  - jonlucc 7y ago
    My point about marketing to patients is that patients see the ad, think "that might be something I need", and go ask their physicians. Then the physician can look into it more thoroughly. With regard to patients searching their symptoms regularly, it is my understanding from the physicians and clinical trial folks that you would be in the incredibly small minority, but it's a good idea.
TheSoftwareGuy 7y ago
There is a third function I don't think you are considering: Informing patients that an option is available to treat a particular condition, who might otherwise not go to a doctor. This would also be a positive for both the market and for patients.