Pharma spent $12.7 billion on Rx promotions in 1998

August 1, 2003

Pharmaceutical Representative

The pharmaceutical industry spent an estimated $12.7 billion promoting its products in 1998.

The pharmaceutical industry spent an estimated $12.7 billion promoting its products in 1998, according to a study by researchers at the Stanford Center for Research in Disease Prevention, Palo Alto, CA.

The study is based on data from Fairfield, CT-based market research company IMS Health on promotion expenditures for the 250 most promoted medications in the United States. Researchers analyzed the data to determine the amount of money spent marketing these products and the principal strategies used to promote them. The resulting estimate of $12.7 billion ranks the pharmaceutical industry 34th among the 200 U.S. industries with the largest advertising expenditures.

The study, the first comprehensive look at the pharmaceutical industry's promotional efforts, also found that drug promotion efforts were concentrated on a relatively small number of medications. Promotion of the top 50 drugs accounted for 51.6% of total drug-promotion spending in 1998.

Time-tested methods

The study found that the most dominant drug-promotion strategies in 1998 were traditional, time-tested methods. Free samples given to physicians totaled $6.6 billion of retail value, representing 51.9% of the drug promotion expenditures; sales representative details to in-office physicians totaled $3.5 billion, accounting for 27.8% of the total; and ads in medical journals totaled $540 million, representing 4.3% of total drug promotion expenditures.

The study also found that direct-to-consumer advertising has become an important component of the pharmaceutical industry's promotional efforts for several drug classes. Consumer-targeted drug ads totaled $1.3 billion in 1998, representing 10.5% of all drug promotion expenditures.

The study's authors explained that "pharmaceutical marketing has been criticized as excessive and for contributing to the overuse and misuse of drugs." But they also acknowledged that drug promotion efforts can help educate physicians and consumers about certain medications and increase awareness of some medical conditions. PR

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