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U.S. drug companies spend twice as much on marketing as research

Marketing and research spending of nine U.S. drug companies

Company

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Percent of

revenues

spent on

marketing

(2001)

Percent of revenues

spent on research

(2001)

Abbott Laboratories

23 percent

10 percent

Allergan

42 percent 15 percent

Bristol-

Myers Squibb

 

27 percent

 

12 percent

Eli Lilly

30 percent

19 percent

Merck

13 percent

5 percent

Pfizer

35 percent

15 percent

Pharmacia

44 percent

16 percent

Schering-Plough

36 percent

13 percent

Wyeth

37 percent

13 percent

U.S. drug companies that market the 50 most-often prescribed drugs to seniors spent more than twice as much on advertising, marketing, and administration in 2001 as they spent on research and development, according to a report by Families USA, a nonprofit national health care organization.

Saying the report "debunks President Bush's recent assertion, and the drug companies' claims that high and fast-rising drug prices are needed to support R&D," the Families USA report shows that nine U.S. pharmaceutical companies spent a total of $45.4 billion on marketing and administration in 2001, while they spent only $19.1 billion on the research and development of new drugs. The report also says that the companies generated a total of $30.6 billion in profits in 2001, more than 60 percent higher than their research expenditures.

Families USA's figures are incorrect because it lumps administrative costs in with advertising, according to the Pharmaceutical Research and Manufacturers of America (PhRMA).

"Last year, PhRMA member companies spent $30.3 billion on new drug research and development," says PhRMA. "In contrast, the industry spent about $9 billion on promotion to consumers and doctors and about $10 billion on free drug samples. When Families USA attacks our promotional spending, they are really attacking the $10 billion in free drug samples that we give away each year to doctors who often use these free medicines to help needy patients. Thats not very family-friendly."

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