4 ms·

Pharmaceutical companies spend even more on advertising than on R&D and still highly profitable though.

RomanAlexander 5y ago
It could easily be the case that without the advertising spend they would not be profitable. Do you think these publicly traded companies are wasting tons of money on advertising? Where is the shareholder outrage?
- legulere 5y ago
  It could also be tragic of the commons effect though. High ad spend is necessitated by the high ad spend of competitors.
- 1auralynn 5y ago
  I worked in pharma advertising for a little bit: There are two sides, consumer and clinical which I believe are about equal spends (might be wrong, but it's significant anyway). Clinical advertising is mostly used to recruit doctors to recruit patients to take part in clinicial trials, and is a necessary component of R&D. Think lots of tradeshows with fancy signage, interactive touchscreens, apps, etc.
nerfhammer 5y ago
According to one google search result total pharma ad spend was $6.58 billion in 2020. According to the CBO pharma R&D was $83 billion in 2019. References: https://www.fiercepharma.com/special-report/top-10-ad-spenders-big-pharma-for-2020 https://www.fiercepharma.com/special-report/top-10-ad-spende... https://www.cbo.gov/publication/57126 https://www.cbo.gov/publication/57126
- diffeomorphism 5y ago
  You are off by a factor 10. The 1 billion is in total over all the time needed to produce the drug (about 10 years), while ads are per year.
  - nerfhammer 5y ago
    ok, so 65 drugs in development, with 6.5 drugs released per year? does that seem plausible for the entire pharma industry?
    - nradov 5y ago
      The FDA approved 53 novel drugs in 2020. That was relatively high; most years have lower totals. https://www.statista.com/statistics/817534/annual-novel-drug-approvals-by-cder/ https://www.statista.com/statistics/817534/annual-novel-drug...
    - diffeomorphism 5y ago
      You notice you are off by a factor 10 and don't pause for a moment but instead immediately go "ok, so"?
      - nerfhammer 5y ago
        If it costs a billion dollars to develop a drug and pharma spends 6.5 billion on ads, that would mean an implausibly small number of drugs being developed, no? I don't see any reason to believe that pharma spends more on ads than R&D. Do you?
        diffeomorphism 5y ago
        > that would mean No. > Do you? The fact that you just reposted your above comment without any change despite knowing it was wrong and despite being called out on that. That seems like a strong point in favor of the opposite of whatever your position is.
        ABCLAW 5y ago
        Just to chime in; the poster you're replying to is correct regarding your incorrectness related to the relative weighting of R&D vs. Marketing spend. Pull a public filing for these companies and take a look at their balance sheets; it's pretty straight forward.

It could easily be the case that without the advertising spend they would not be profitable. Do you think these publicly traded companies are wasting tons of money on advertising? Where is the shareholder outrage?

legulere 5y ago
It could also be tragic of the commons effect though. High ad spend is necessitated by the high ad spend of competitors.
1auralynn 5y ago
I worked in pharma advertising for a little bit: There are two sides, consumer and clinical which I believe are about equal spends (might be wrong, but it's significant anyway). Clinical advertising is mostly used to recruit doctors to recruit patients to take part in clinicial trials, and is a necessary component of R&D. Think lots of tradeshows with fancy signage, interactive touchscreens, apps, etc.

nerfhammer 5y ago

According to one google search result total pharma ad spend was $6.58 billion in 2020. According to the CBO pharma R&D was $83 billion in 2019. References: https://www.fiercepharma.com/special-report/top-10-ad-spenders-big-pharma-for-2020 https://www.fiercepharma.com/special-report/top-10-ad-spende... https://www.cbo.gov/publication/57126 https://www.cbo.gov/publication/57126

diffeomorphism 5y ago
You are off by a factor 10. The 1 billion is in total over all the time needed to produce the drug (about 10 years), while ads are per year.
- nerfhammer 5y ago
  ok, so 65 drugs in development, with 6.5 drugs released per year? does that seem plausible for the entire pharma industry?
  - nradov 5y ago
    The FDA approved 53 novel drugs in 2020. That was relatively high; most years have lower totals. https://www.statista.com/statistics/817534/annual-novel-drug-approvals-by-cder/ https://www.statista.com/statistics/817534/annual-novel-drug...
  - diffeomorphism 5y ago
    You notice you are off by a factor 10 and don't pause for a moment but instead immediately go "ok, so"?
    - nerfhammer 5y ago
      If it costs a billion dollars to develop a drug and pharma spends 6.5 billion on ads, that would mean an implausibly small number of drugs being developed, no? I don't see any reason to believe that pharma spends more on ads than R&D. Do you?
      - diffeomorphism 5y ago
        > that would mean No. > Do you? The fact that you just reposted your above comment without any change despite knowing it was wrong and despite being called out on that. That seems like a strong point in favor of the opposite of whatever your position is.
      - ABCLAW 5y ago
        Just to chime in; the poster you're replying to is correct regarding your incorrectness related to the relative weighting of R&D vs. Marketing spend. Pull a public filing for these companies and take a look at their balance sheets; it's pretty straight forward.