Drug Companies' R&D Spending Lags Behind Promotion

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The pharmaceutical industry often uses the need for research and development funds as an excuse for exorbitant drug prices. But a new study by Marc-Andre Gagnon and Dr. Joel Lexchin out of York University (Canada), titled "The Cost of Pushing Pills: A New Estimate of Pharmaceutical Promotion Expenditures in the United States," shows that publicity, not R&D, eat up the biggest percentage of U.S. drug price tags. "The researchers' estimate is based on the systematic collection of data directly from the industry and doctors during 2004, which shows the U.S. pharmaceutical industry spent 24.4% of the sales dollar on promotion, versus 13.4% for research and development, as a percentage of US domestic sales of US$235.4 billion." Gagnon estimates that the pharmaceutical industry "spent approximately US$61,000 in promotion per physician during 2004." 2004 is the latest year for which complete data is available. "The study's findings supports (sic) the position that the U.S. pharmaceutical industry is marketing-driven and challenges the perception of a research-driven, life-saving, pharmaceutical industry, while arguing in favour of a change in the industry's priorities in the direction of less promotion."