Pharmaceutical Industry Marketing by the Numbers

A study conducted in 2004, demonstrated that the Pharmaceutical industry in the United States spent 24.4 % of sales on promotion vs. 13.4% for research and development. The study examined the reports of IMS Health and CAM Group, two international marketing companies that provide the pharmaceutical companies with marketing and sales data. In the report, CAM indicated that the U.S. pharmaceutical industry has spent $33.5 billion dollars on promoting drugs in 2004, whereas IMS indicated that the industry has spent $27.7 billion dollars.

Not only does the pharmaceutical industry spend less money on research and development than it does on marketing but it also employs less people in the research and development field than in marketing. Between 1995 and 2000, the number of people employed in the marketing departments for big pharma rose by more than 30,000.

While some of this marketing budget is spent on direct to consumer advertisements. In other words, advertisements directed to potential patients, the vast majority is spent on promoting the drugs to doctors. Pharmaceutical companies use sales representatives who frequently visit doctors and provide them with samples, medical literature and promotional material. The maintenance of this relationship with the doctors is often referred to as “detailing.” The sales representatives maintain sales call notes regarding their communications with doctors, which are in turn provided to the pharmaceutical company’s marketing department. The pharmaceutical industry has spent an astounding $8,290 per doctor.

One of the most recent examples of the Pharmaceutical and Medical Device industry’sunscrupulous relationship with doctors is the DePuy ASR hip implant litigation. Dr. Thomas Schmalzried and Dr. Thomas Vail not only consulted with DePuy to help develop the defective ASR hip implant system, however they also received royalties each time a hip implant was sold. Reports from DePuy demonstrate that from 2009 to 2010, these doctors received payments of more than $3.9 million from DePuy. Please click on the following link to see Dr. Thomas Schmalzried’s royalty payments and Dr. Thomas Vail’s royalty payments.

Despite the pharmaceutical industry’s attempt to persuade doctors, some doctors have begun to refuse to see sales representatives in their offices. Others have gone so far as to chastise the pharmaceutical industry for attempting to buy the goodwill of the medical community.

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