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The CBC reported tonight, that there is an article in the

American Journal of Medicine, that reports drug companies spend twice as much on advertising as they do on research.

Now you know why drugs in the US cost so much, you are paying for advertising not research.

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Thanks for posting this information. For several years I have been nauseated by the number of adverts for prescription drugs on network television, cable and even on PBS.

I don't know which Presidential administration loosened the control on drug adverts, but I wish, dearly wish, the next administrtion would reverse that decision and forbid adverts for prescription drugs. There are no tobacco adverts, so why so many drug adverts??

In addition to increasing the cost of drugs to Americans, I strongly suspect, the sheer flood of adverts also has a direct influence on the number of drug presciptions Americans ask for, and demand from their physicians, who in opinion are already too quick with the pen and prescription pad.

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This is a firm grasp of the obvious.

 

The regulations to allow direct to consumer advertising was authorized by the FDA during the Clinton administration in the mid 1990's. Prior to that the drug companies could only market direct to the medical profession.

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Guest Merlin

The purpose of the advertising is, in part, to bring drug prices down: by selling a larger volume they can spread the research costs over a larger number of sales. Take a simplistic example. If they spend a million dollars on research and development, but only sell one pill, they would need to sell it for a million just to recover their research cost. Sell a million pills, and recover that cost at $1.00 per pill. Sell a billion, and recover it at ten cents. But to sell a large volume, the public needs to know it is available, hence advertising. Yes, of course, they also want to make a profit from the larger volume, and liberals hate the idea of profits. But remember, much of the "profit" will go toward development of new medicines, just as the drug being advertised was researched with "profits" from earlier drugs. Liberals love the golden eggs, but are so eager to kill the goose.

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How much of the profit will go toward development of new drugs? Much of it will go into the pockets of the executives and shareholders of the company, to be spent on other things, which may be good for the economy as a whole, but not necesarily for those who need medications.

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Not enough of the profit will go into future drugs but the principle is correct. The shareholder's are entitled to a return on their investment, if available. They put up their money and took the risk that there would be a profit. The executives are not entitled to huge salaries and perks unless they invested their own money as shareholders, not just given shares as part of their compensation.

 

The amount of profit as a percentage of the income may be out of whack for some drug companies but what really frosts me is the fact that certain diseases are thought to be able to be treated but with a limited amount of "customers", meaning number of folks with the disease, the drug companies won't foot the research bill. I am a strong proponent of less government but this case suggests a perfect place for more government intervention.

 

Best regards,

KMEM

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>The purpose of the advertising is, in part, to bring drug

>prices down: by selling a larger volume they can spread the

>research costs over a larger number of sales. Take a

>simplistic example. If they spend a million dollars on

>research and development, but only sell one pill, they would

>need to sell it for a million just to recover their research

>cost. Sell a million pills, and recover that cost at $1.00 per

>pill. Sell a billion, and recover it at ten cents. But to sell

>a large volume, the public needs to know it is available,

>hence advertising. Yes, of course, they also want to make a

>profit from the larger volume, and liberals hate the idea of

>profits. But remember, much of the "profit" will go toward

>development of new medicines, just as the drug being

>advertised was researched with "profits" from earlier drugs.

>Liberals love the golden eggs, but are so eager to kill the

>goose.

 

There is some truth to what you're saying, but your response is somewhat misleading as to how drugs are priced. The true part of your statement is that the pharmaceutical company has to somehow get the message out that a new (presumeably improved in some manner) drug is available in order to sell it a hopefully recuperate their R & D costs plus profit. While you do acknowledge that your example is "simplistic" (as conservatives often are), it leaves a false impression as to how drugs are priced.

Internal pharmaceutical company documents have proven that, as common sense might dictate, drug prices are set not by research costs, or even to a great extent, production costs. Rather, prices are determined for the most part by the simple laws of supply and demand (like most other commodities). In other words, pharmaceutical companies simply set the prices where they think they will make the greatest profit (not that there is anything wrong with that--this is what they must do). Sometimes they don't recoup their research costs. Sometimes they do. Sometimes they hit it big-time (such as Viagra), and make many times what the research and production costs involve.

For the most part, patients themselves are not directly involved in these determinations, since prices are negotiated between insurance companies and the drug companies. Notable exceptions include Viagra, Levitra, and Cialis. These are drugs which insurance companies typically don't pay for (since they are not necessary to sustain life or limb), but which patients will pay for. Most Americans wouldn't think of spending $4 a day for a pill to reduce their chance of getting a heart attack, but will pay $6 a pill for Viagra, or $4 a day on cigarettes or premium coffee drinks.

There are plenty of good examples of how the law of supply and demand works for pharmaceuticals. Consider Baychol. When it came out as a cholesterol-lowering drug, it never claimed to be better in any way than any of the tried and true drugs already out there. Despite the fact established drugs with proven abilities to save lives, such as Zocor (now just recently went generic), were rolling in profits, and the Baychol people needed to recoup their R & D $'s, Baychol had no choice but to simply low-ball all of the other cholesterol-lowering meds out there.

I didn't especially like it, but I was faced with the fact that insurance formularies would pay for Baychol ($10 copay) but not Zocor. Asking the patient to pay $120 a month to go off-formulary was really not a viable option for my patients. Of course, soon enough, Baychol was shown to be dangerous and pulled off the market.

I have nothing against responsible marketing. Direct-to-consumer marketing, however, cannot be described as responsible marketing. Analyzing marketing data from the pharmaceutical company requires a complex knowledge of physiology, biochemistry, pharmacology, and biostatistics, among other fields. I would venture to say that this task is difficult even for most physicians. It is certainly not possible for untrained consumers.

There are plenty of good examples of the dangers of direct-to-consumer marketing, including, of course Vioxx, which was no more effective a pain reliever than naproxen (but cost over 10X more). Even physician marketing can be dangerous if the physician isn't knowledgeable or critical enough. For over 7 years, I had pharmaceutical reps try to convince me to prescribe Avandia first-line for diabetes. Never mind that established treatments with good safety records cost 10 cents-50 cents a day, and Avandia was $7 a day.

The Avandia sales staff actually took me (and many others, of course) to dinner lectures given at the best restaurants in town, with diabetes specialists (some of them endocrinology professors) explaining why Avandia was better than metformin or glipizide. I always politely told them that while I felt this was a good 3rd-line drug, I would not consider using it first-line until there was data to show that it was at least as good as what was already out there (in terms of preventing complications or saving lives, that is).

My insistence paid off when (at least preliminary) data showed that Avandia is less helpful at preventing complications than glipizide or metformin. I did not have egg on my face (like a lot of these endocrinologists), nor did I have to do a lot of backpedalling, since those patients who were on Avandia had already been on metformin and glipizide (or glimepiride). I merely had to make the easy switch from Avandia to Actos.

So although I agree with your premise that marketing is not "all bad," and certainly shouldn't be entirely illegal, I think it's also plain that marketing has its downsides as well. Certainly, I don't see how any good can come out of direct-to-consumer drug marketing. The chance that a patient knows more about how to treat a condition than I do simply because he's watched a 30 second spot is essentially nil.

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Unfortunately, you are correct in that the government needs to be more involved in drug research. I truly have nothing against corporate America. Nevertheless, profits cannot be the sole motivating factor for pharmaceutical product research. At the present time, pharmaceutical products are being developed on the basis of their potential to pull a profit. Since Americans are getting fatter and lazier (apparently spending all of their time in front of computer screens? ;-) ), most of the research $$ is going into diabetes, cholesterol, and especially obesity drugs. These drugs are incredibly profitable, because it means a lifetime of daily drug use (I guess HIV drugs are also in the category of lifetime, long-term daily use).

Nevertheless, this leaves out many needed areas of pharmaceutical research. One example, of course, is rare but devastating diseases. However, some needs are fairly pressing even to the general population, but are not being pursued by the drug companies because the drugs are only taken for short periods of time. I'm thinking of course of antibiotics. Despite the frightening growth of drug resistance, little research is going on in antibiotics.

The reason is economics. Every day, I see patient after patient who needs to take umpteen diabetes, heart, cholesterol, etc. pills every day for years on end. Yet how often do I see someone in need of an antibiotic? Bladder infections are quite common, but since antibiotics are rapidly concentrated in the urine, usually any old drug will do (the 1950s drug nitrofurantoin does particularly well since it's rapidly concentrated in the urine and is not used in agriculture, and does not go to the skin or bodily secretions).

What other infections pop up? Most are viral, of course. Inner ear infections and sinus infections, while often bacterial, are primarily mechanical problems, and antibiotics have minimal benefit (and none has really shown to be superior than another). So which infections need "big guns"? That leaves kidney infections (maybe 3 a month), or pneumonia (maybe 2 a month in the winter, rarely at other times). These infections are treated for at most 10 days. Not a great potential for profit, as one might gather.

Yet the situation is that the bugs are becoming resistant to most of what we have out there, and I haven't seen (or at least haven't been marketed ;-) ) on any serious new antibiotic in several years. In fact, some safe, approved antibiotics aren't even being produced because it's not even worth producing them! A good example is Suprax, which is (was) the only one-dose oral treatment approved and effective for gonorrhea. A victim of its own success, you might imagine that there isn't a great profit potential for a treatment which requires a single pill. Now we have to use injectable ceftriaxone (which has many other uses, which their manufacturers are thankful for).

It seems that we need a new system. One solution may involve government-funded research, then putting a high tax on legitimate pharmaceutical profits for these drugs until the government recuperates its research costs (if it is able to do so--which I recognize won't be possible for may types of drugs).

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Guest zipperzone

I find most TV ads to be very irritating, especially the ones that are repeated multiple times during one program.

 

I would never think of asking my doctor to put me on "brand X" just because I saw it advertised on TV. He is the expert and it is his call as to which drug(s) I need, if any.

 

However........ I think I do receive a benefit from TV drug advertising. It can alert one to conditions and or symptoms that might otherwise be overlooked or disregard. I usually make a note and discuss it with my MD on my next visit.

 

I guess it could lead to increased hypercondria if one was so inclined. But then one could say "better safe than sorry".

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Advertising sometimes makes it harder to prescribe drugs. How man remember a commercial for Propecia, for baldness, that repeatedly stated that it should not be handled by pregnant women. Granted Propecia is something one can take or not, but the point is that people were scared off by the advertising. Those 4 hour erections that Viagra, Levitra and Cialis warn about, (where are they when you need them) have also scared off people. Most of the drugs advertised on TV direct to patient are discretionary drugs for erectile dysfunction, dieting, cold and allergy and baldness. Totally unnecessary to advertise these, but direct to consumer advertising is not even in the top ten of problems with drug companies in the US.

 

And as an aside to Unicorn, how good was the food at those dinners sponsered for drugs you werent going to use?

 

I have never seen a purplekow;

I never hope to see one;

I can tell you anyhow;

I'd rather see than be one

 

Help there is a purplekow in my mirror

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I saw a news show about drugs and doctors were saying that patients come in asking for a specific drug. The show mentioned that drug use in the US is up dramatically, and that a lot of it is not needed.

The other thing I have noticed, is the more life threatening the condition the more expensive the drug. One of the guys i worked with was on heart medication, and it was very expensive.

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Guest Merlin

While you decry the fact that drug companis are driven by the pursuit of profits, you fail the consider the alternative: few new drugs, if any, are developed in the absence of the pursuit of profits. While the government subsidy of research is helpful, bureaucrats, lacking the discipline of the profit motive, waste much of their available funds on dead end projects. There are plenty of countries with socialistic health care systems, but in the end, they look to the US and companies dependent upon profits from the US, for new developments. Look at any country where the people like their socialised medicine and wonder how happy they would be without a steady stream of new developments from the US and its horrible, profit motivated, health system. The great weakness of socialism is its inability to innovate.

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Guest ncm2169

< While you decry the fact that drug companis are driven by the pursuit of profits, you fail the consider the alternative: few new drugs, if any, are developed in the absence of the pursuit of profits.

 

Fair enough, but please explain to me why US residents should bear most of the cost?

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>While you decry the fact that drug companis are driven by the

>pursuit of profits, you fail the consider the alternative: few

>new drugs, if any, are developed in the absence of the pursuit

>of profits. While the government subsidy of research is

>helpful, bureaucrats, lacking the discipline of the profit

>motive, waste much of their available funds on dead end

>projects. There are plenty of countries with socialistic

>health care systems, but in the end, they look to the US and

>companies dependent upon profits from the US, for new

>developments. Look at any country where the people like their

>socialised medicine and wonder how happy they would be without

>a steady stream of new developments from the US and its

>horrible, profit motivated, health system. The great weakness

>of socialism is its inability to innovate.

 

 

I do believe that more than a few MAJOR drug companies are European.

Based in countries with some sort of socialized health care.

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Guest Merlin

I absolutely agree that we should not have to bear the entire cost of research and development. The problem is that socialist countries impose price controls and threaten to dishonor our patents if US drug companies do not sell within their price controls. The result is that socialist countries do not pay their share of research and development. But the drug companies have little choice. Selling within the controlled prices usually or always brings down the overall per unit price. In other words, a little profit is better than none at all. And, if they refuse to sell at that price, the company may begin to produce and sell without paying anything for the patent rights. This has happened in South Africa and Brazil. The US Government should be more aggressive in protecting the rights of US companies, but populist politicians are make political points by demonizing the drug companies.

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>I find most TV ads to be very irritating, especially the ones

>that are repeated multiple times during one program.

>

>I would never think of asking my doctor to put me on "brand X"

>just because I saw it advertised on TV. He is the expert and

>it is his call as to which drug(s) I need, if any.

>

>However........ I think I do receive a benefit from TV drug

>advertising. It can alert one to conditions and or symptoms

>that might otherwise be overlooked or disregard. I usually

>make a note and discuss it with my MD on my next visit.

>

>I guess it could lead to increased hypercondria if one was so

>inclined. But then one could say "better safe than sorry".

 

I never thought that I had to bring a new drug to the attention of my MD. As I sit in the waiting room I notice a constant stream of people in suits, pulling little suitcases on wheels in and out of my MD's office. By golly; do you think that these could be sales people?? from drug companies??

Cheerfully leaving samples of their newest products, along with the rebate (kickback) schedule for your MD.

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>Advertising sometimes makes it harder to prescribe drugs.

>How man remember a commercial for Propecia, for baldness, that

>repeatedly stated that it should not be handled by pregnant

>women. Granted Propecia is something one can take or not, but

>the point is that people were scared off by the advertising.

>Those 4 hour erections that Viagra, Levitra and Cialis warn

>about, (where are they when you need them) have also scared

>off people. Most of the drugs advertised on TV direct to

>patient are discretionary drugs for erectile dysfunction,

>dieting, cold and allergy and baldness. Totally unnecessary

>to advertise these, but direct to consumer advertising is not

>even in the top ten of problems with drug companies in the

>US.

>

>And as an aside to Unicorn, how good was the food at those

>dinners sponsered for drugs you werent going to use?

>

>I have never seen a purplekow;

>I never hope to see one;

>I can tell you anyhow;

>I'd rather see than be one

>

>Help there is a purplekow in my mirror

 

I see Lipitor and all my blood pressure medications on tv on a daily basis. Of course my cable system comes from China.

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>The purpose of the advertising is, in part, to bring drug

>prices down: by selling a larger volume they can spread the

>research costs over a larger number of sales. Take a

>simplistic example. If they spend a million dollars on

>research and development, but only sell one pill, they would

>need to sell it for a million just to recover their research

>cost. Sell a million pills, and recover that cost at $1.00 per

>pill. Sell a billion, and recover it at ten cents. But to sell

>a large volume, the public needs to know it is available,

>hence advertising. Yes, of course, they also want to make a

>profit from the larger volume, and liberals hate the idea of

>profits. But remember, much of the "profit" will go toward

>development of new medicines, just as the drug being

>advertised was researched with "profits" from earlier drugs.

>Liberals love the golden eggs, but are so eager to kill the

>goose.

 

No, us liberals don't want to kill the golden goose. But we would like to pay the same prices for those golden eggs as one can buy them for in Canada.

Oh, now I remember, Bush stopped the importation of drugs from Canada because we could not be sure if the drugs were safe.

Now I see on Lou Dobbs 86% of all drugs sold in the US are made in China. I never trusted those sneaky Canadians.

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Guest ncm2169

Your definition of a Socialist country must exist only in your mind. Brazil and South Africa are Socialist? Must be news to them. x( Must be news to most of Europe, also. You obviously thrive living under Fuehrer Bush and his corrupt gang. One wonders what personal interest you have in perpetuating the current highway robbery by the US-based drug lords.

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>>>>Those 4 hour erections that Viagra, Levitra and Cialis warn

>>about, (where are they when you need them) have also scared

>>off people. Most of the drugs advertised on TV direct to

>>patient are discretionary drugs for erectile dysfunction,

>>dieting, cold and allergy and baldness. Totally unnecessary

>>to advertise these, but direct to consumer advertising is

>not >>even in the top ten of problems with drug companies in the

>>US.

>>

>>And as an aside to Unicorn, how good was the food at those

>>dinners sponsered for drugs you werent going to use?

>>

>I see Lipitor and all my blood pressure medications on tv on a

>daily basis. Of course my cable system comes from China.

 

Most is not all and I will bet you see more Viagra, Cialis and Levitra commercials than you do Lipitor and blood pressure medications. And even if people do ask for a particular blood pressure medication, the final determinate for most people is whether their insurance company will pay for it. For people without insurance, the most pressing factor is cost for necessary medications, no matter how much you direct advertise to them. Discretionary drugs, their are advertised so you can get them on the internet and where is the regulation of that leak in the medical care system. Again most is not all.

I have never seen a purplekow;

I never hope to see one;

I can tell you anyhow;

I'd rather see than be one

 

Help there is a purplekow in my mirror

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>While you decry the fact that drug companis <sic> are driven by the

>pursuit of profits,

 

I guess you didn't read my post carefully. I said that not only is there nothing wrong with drug companies pursuing profits, but I added that they MUST do it. Not to pursue profits is a breach of the fiduciary duty to the stockholders. My point was that, while drug companies of course aim to develop drugs which will be profitable, the price they set for their medications is set by the market and cannot really be influenced by how much they spend on R & D. Although patients and insurance companies might empathize with R & D costs (but probably don't), it is patients and insurance companies who will decide "what the market will bear."

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>< While you decry the fact that drug companis are driven by

>the pursuit of profits, you fail the consider the alternative:

>few new drugs, if any, are developed in the absence of the

>pursuit of profits.

>

>Fair enough, but please explain to me why US residents should

>bear most of the cost?

 

You hit a nail with the hammer here. Deej has a good point about silly U.S. lawsuits being a problem (I'm not sure that's the entire explanation, of course). The multimillionaire lawyer who's made a fortune with his 1-800-BAD-DRUG should be shot. As soon as new data shows drug A to be less safe than drug B, he goes back and retrospectively sues the manufacturer of A, even if the effect is tiny. Don't get me started with the Vioxx settlement. The effect of Vioxx on cardiac events was miniscule compared with that of other known cardiac risk factors such as hypertension, family history, smoking, cholesterol, and diabetes. In fact, Vioxx is safer cardiac-wise than ibuprofen (but not as safe as naproxen, and certainly not as safe as aspirin). I haven't seen anyone go after ibuprofen manufacturers.

Of course, I was never a big Vioxx enthusiast myself. Yet it is a terrible testament to the U.S. legal system that these lawsuits even got past the starting gate. Merck was forced to settle due to their sheer number (gee, how many people a day get heart attacks--the most common cause of death by far in the U.S.?).

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> By golly; do you think

>that these could be sales people?? from drug companies??

>Cheerfully leaving samples of their newest products, along

>with the rebate (kickback) schedule for your MD.

 

Just to set the record straight. Yes, these people are pharmaceutical company sales people, and no they do not give kickbacks to MDs, if by that you mean money. The most they can do is to offer medical textbooks or software, or invite the physician to a promotional dinner lecture at a nice restaurant (admittedly of dubious educational value). I remember a nurse practitioner once asking me if she could obtain continuing education credits for attending these lectures. I told her that should be thankful they don't remove her existing educational credits for attending these lectures!

:D

Just to make you feel better, physicians are also under pressure to keep costs down (from insurance companies, of course), as well as the other way around from the pharmaceutical industry. Hopefully, your physician is smart enough to do the right thing for his patients (admittedly very difficult if not impossible for a patient to tell).

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Guest zipperzone

>I never thought that I had to bring a new drug to the

>attention of my MD.

 

I never said I would bring the DRUG to the attention of my MD. I meant that if I thought I had a sympton that could possibly indicate a problem, I would mention the SYMPTON to him. Big differance there.

 

As I sit in the waiting room I notice a

>constant stream of people in suits, pulling little suitcases

>on wheels in and out of my MD's office. By golly; do you think

>that these could be sales people?? from drug companies??

>Cheerfully leaving samples of their newest products, along

>with the rebate (kickback) schedule for your MD.

 

Another conspiracy theory? The MD only prescribes, it's the pharmacy that sells. Do you really think the pharmacy keeps a record of which doctor prescribes which drugs and reports that info back to the drug maker so as the doctor can collect a few bucks? Get real!

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