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Marketing a myth
Researchers in white coats working relentlessly towards discovering wonder drugs to free human kind from dreaded diseases - that's the picture the pharmaceutical industry loves to project of itself. Unfortunately for the sector, this image is now being contested by the image of medical representatives of greedy companies zipping around in cars, coaxing and coercing doctors to prescribe expensive or even unnecessary medicines to hapless patients.
Professor Julie Froud of the Manchester Business School says that the growing negative perception of the industry is hurting it as its portrayal as a life-saving industry is crucial to its potential to influence the regulatory environment in which it operates. Moreover, the pharma industry's justification of high drug prices on the grounds that R&D expenses are huge is becoming difficult to sustain, as allegations of promotional expenditure being far higher than R&D expenses gain ground.
Scandal after scandal has surfaced about the pharmaceutical industry spending billions on bribing doctors, conducting 'managed' clinical trials and getting scientific papers ghostwritten to push products. One of the biggest scandals to hit the headlines was Pfizer's $2. 3 billion settlement in September 2009, one of the largest healthcare fraud settlements in the US, topping the $1. 42 billion that Eli Lilly had to pay for illegally promoting Zyprexa, a schizophrenia drug.
Pfizer agreed to the settlement to stop further investigation into alleged fraudulent marketing practices. These alleged unethical practices included using consultant meetings and offering vacations in lavish resorts to doctors in order to promote the company's drugs and making misleading claims about the safety and efficacy of drugs. Yet, hanging on to its life-saver image, Pfizer's counsel was reported saying after the settlement that this was the reason as to why Pfizer must be trusted: "The vast majority of our employees spend their lives dedicated to bringing truly important medications to patients and physicians in an appropriate manner. " This, despite the settlement being the company's fourth for illegal marketing since 2002.
In September 2002, Pfizer was busted for false advertising with the Food and Drug Administration (FDA) instructing it to pull out all magazine advertisements in which it claimed that its drug, Lipitor caused fewer side effects than the other statin drugs in the market. Just a month later, in October 2002, Pfizer paid $49 million to settle a federal case for overcharging for Lipitor and for fraudulently avoiding payment owed to the government under the Medicaid Rebate programme. In 2004, Pfizer had to pay $430 million after pleading guilty to criminal charges of illegally marketing the epilepsy drug, Neurontin, for migraine headaches, pain, and bipolar disorder.
According to the US non-profit organisation, Taxpayers Against Fraud, the pharma industry is the number one source of fraud-related settlements amounting to billions recovered from false claims prosecutions in the US. The industry estimates that $800 million to a billion dollars are spent on bringing one successful drug to the market. This high cost includes the absorbed cost of research on hundreds of drugs that fail at various stages and have to be discarded. The industry justifies the high drug prices on the grounds that the investment sunk into the several failed drugs is recovered through the few successful ones.
However, a study published in 2008 titled 'The Cost of Pushing Pills: A New Estimate of Pharmaceutical Promotion Expenditures in the United States', used data from IMS Health and CAM Group - two international market research companies that provide sales and marketing data on the pharmaceutical industry - to show that pharmaceutical companies spent almost twice as much on promotion as they did on R&D, confirming the public image of a marketing-driven industry. According to the study, the US pharmaceutical industry spent 24. 4 per cent of the sales dollar on promotion, versus 13. 4 per cent for R&D, clearly indicating that promotion dominates over R&D contrary to the industry's claims.
The industry is reluctant to disclose how much it really spends on what in the realm of research even as critics say that most of the spending is on me-too drugs offering no significant improvement on existing drugs. Prescrire, a journal in French on drugs, therapeutics, and diagnostics, did a comprehensive assessment of 359 new drugs introduced in the French market between 1999 and 2004 and found that almost half the drugs offered nothing new, while 40 per cent were categorised as "possibly helpful" or as offering some advance. A mere 3 per cent offered real advance while 7 per cent was rejected as "not acceptable". Even a US Congressional budget report of 2006 on R&D in pharma stated that non-new molecular entities, i. e. drugs with incremental improvements on existing drugs, constitute about two-thirds of the drugs approved by the FDA.
Given the trend of drugs entering the market offering little or no improvement over existing ones, companies resort to aggressive marketing to push their products through means both fair and foul. "The industry's marketing costs are always highly under-reported and R&D costs are inflated. That is standard practice, " says Dr C M Gulati, editor of the Monthly Index of Medical Specialties. As rising drug costs hit governments in recessionaffected countries, the promotion expenses being added to the drug costs are coming in for scrutiny, and criticism, with several countries cracking down on illegal promotion.
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