What is your life worth ...

Darat said:
I would think the point is that people don't seem to think it is a good argument as to why drug companies are "justified" charging so much so that the "failed" advertising campaigns can be funded from the results of the successful ones. (However I do not have any figures that support the claim that they do in fact spend more on advertising then they do on R&D.)
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Every advertising campaign by every company in every industry in every country is ultimately used to cover the costs of failed products. Why should the drug companies be any different?
 
The reasons for a company's advertising are a bit more complicated than that.
 
Mycroft said:
Pullback in Avastin drug trial
Sudden deaths cause concern, Genentech shares tumble 2.3%

Swiss drugmaker Roche Holding AG said Monday it has stopped recruiting new subjects with colon cancer into a clinical trial evaluating the Genentech drug Avastin because safety overseers noted a higher death rate in one group of the study.

Seven trial participants in that group died: Four suffered sudden deaths (and three of those were younger patients -- surprising results that heightened the concern). Two in the same group, who were taking Avastin plus a chemotherapy regimen, died of heart failure. However, another group taking Avastin with a different chemotherapy combination showed no increased death rate.
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Hmmm.
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Hmmm, indeed. Will $100,000 per patient per year be enough to cover the lawsuits?
 
The Central Scrutinizer said:
Every advertising campaign by every company in every industry in every country is ultimately used to cover the costs of failed products. Why should the drug companies be any different?
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They shouldn't be.

What I was trying to point out was that there seems to be a popular argument put forward by among others the pharmaceutical companies that implies because they are in an industry that their R&D does not every single time result in a successful product they can sell this is somehow is different to other companies that also require R&D. But this is just not the case. Any company that requires R&D has to factor in that R&D is not always successful in terms of producing a commercially viable product.

The fact that their advertising budgets (may be!) are larger then their R&D budgets just helps to expose this argument's weakness.
 
BPSCG said:
Hmmm, indeed. Will $100,000 per patient per year be enough to cover the lawsuits?
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Clinical trials on cancer treatments and the like tend to be high risk and the patients are made aware of this prior to starting the trail.

As long as they have followed the guidelines of the clinical trial and fully disclosed all the knowledge they had prior to the trials starting regarding the risks I can't see how there could be any grounds for any lawsuit.
 
Darat said:
As long as they have followed the guidelines of the clinical trial and fully disclosed all the knowledge they had prior to the trials starting regarding the risks I can't see how there could be any grounds for any lawsuit.
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Grounds? When did grounds begin to matter?
 
Darat said:
What I was trying to point out was that there seems to be a popular argument put forward by among others the pharmaceutical companies that implies because they are in an industry that their R&D does not every single time result in a successful product they can sell this is somehow is different to other companies that also require R&D. But this is just not the case. Any company that requires R&D has to factor in that R&D is not always successful in terms of producing a commercially viable product.
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You are arguing my position!

Let's say a company has a goal of 20% ROI. They make Product A that costs them $80 to produce (R&D included). They then spend $20 to advertise it. Their goal is to bring in $120 in revenue, to produce a $20 profit. But their product is a failure. They don't sell a single one. Then they make Product B. Same parameters, same failure. Repeat this for 10 products. Their investment as a company is now $1000. But finally, Product 11 comes along. They advertise the hell out of it. Their goal is no longer to make $20, but instead to make $200, to cover the costs of all the previous failed products. Why should drug companies not be afforded this option?
 
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Darat said:
As long as they have followed the guidelines of the clinical trial and fully disclosed all the knowledge they had prior to the trials starting regarding the risks I can't see how there could be any grounds for any lawsuit.
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Oh dear. You are so innocent! :p
 
Darat said:
They shouldn't be.

What I was trying to point out was that there seems to be a popular argument put forward by among others the pharmaceutical companies that implies because they are in an industry that their R&D does not every single time result in a successful product they can sell this is somehow is different to other companies that also require R&D. But this is just not the case. Any company that requires R&D has to factor in that R&D is not always successful in terms of producing a commercially viable product.

The fact that their advertising budgets (may be!) are larger then their R&D budgets just helps to expose this argument's weakness.
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The budgets could very well be independent, that is up to the CEO.
 
Darat said:
The fact that their advertising budgets (may be!) are larger then their R&D budgets just helps to expose this argument's weakness.
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No, it doesn't. Presumably, those companies are advertising because they get a return on those advertising dollars. Lacking such returns, the prices of the drugs would have to be even higher because sales (and the profits on thoise sales) would be down.

For your statement to be true, you would have to show that the advertising has no effect on sales and hurts the financial position of the company in question.

You may also be assuming that the advertising is for new drugs on patent, when in fact the advertising may be being spent on older drugs that are off patent and losing market share to generics or other patented drugs that treat the same disease. I don't think Bayer is doing much R&D on aspirin any more, but they advertise it all the time for example.
 
The Central Scrutinizer said:
You are arguing my position!
...snip... Their goal is no longer to make $20, but instead to make $200, to cover the costs of all the previous failed products. Why should drug companies not be afforded this option?
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Er I've never said they shouldn't. I was pointing out that the pharmaceutical companies (and others) try to imply that their businesses are somehow different to other businesses by using this argument. I was pointing out this was not the case.
 
WildCat said:
No, it doesn't. Presumably, those companies are advertising because they get a return on those advertising dollars. Lacking such returns, the prices of the drugs would have to be even higher because sales (and the profits on thoise sales) would be down.

...snip...
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My posts seem to have been interpreted totally opposite to the point I was trying to make!

I am not arguing that they shouldn't or they should spend more or less on R&D then their advertising budgets or that there is anything inherently wrong in spending more on advertising.

However just last week when I was listening to the CEO of Glaxo-whatever being interview after their impressive profits had been announced hea gain made the point that somehow the pharmaceuticals companies are in a different position to other companies because "not all their research results in commercial drugs". And as I was saying this is nothing special or unique to the pharmaceutical sector. All companies that have to innovate through R&D face the exact same problem.
 
Darat said:
Er I've never said they shouldn't. I was pointing out that the pharmaceutical companies (and others) try to imply that their businesses are somehow different to other businesses by using this argument. I was pointing out this was not the case.
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I've always thought they were pointing out how their businesses are the same as others and should be afforded the same opportunities.

Either way, we are saying the same thing.
 
CaptainManacles said:
That's not your opinion, that's just factually wrong. "Pay me $100k for this drug that will let you live" is quite different then saying "pay me $20k or I break your knees". If the entity who put that drug on the market didn't exist, you'd simply be dead. If the entity breaking your knees didn't exist, you'd simply have good knees. It's a big difference.

If life is so important, shouldn't we reward the people who are protecting life by investing in the resources needed to start these endevors? People who save lives but expect to be paid aren't unethical terrible humans who should be shot, people who clamor for the deaths of those who provide us life saving drugs are terrible unethical humans with no sense or reality or reason.

If you are dying, and someone saves your life, don't you think they deserve everything you can give them? No one is profiting off of other people's imfortune, they're profiting off of saving people from misfortune.
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Great post! It's easy to slam the corporate fatcats..a cheap thrill for a good moral liberal person of high moral fibre. But what good does that do? If it were not for men and women willing to risk fortunes in order to make even bigger ones there would be no new cancer medicines. Techinical innovations come about because those who are making them expect to make big $. If not for this effect we'd be writing letters to each other under a flickering gaslight instead of playing on the internet.

Personally I'd rather live in a world where a real scientific cure to my disease existed at any price. Finding the money somehow would be a far better bet than the final Mexican vacation that Coretta Scott King recently made. These people who gamble on new medicines and technologies are to be applauded not murdered. Their game; whether they personally win or lose; is what has created our modern world.

-z
 
US pharmaceutical companies spend more money on marketing than they spend on research. A lot of the new drugs they develop (75%, if I recall correctly) are "me-too" drugs i.e. copies of drugs that already exist. This is why they spend so much money on marketing. Also, according to one of my links, at least 1/3 of these new drugs were discovered by universities or small biotech companies. The big pharmaceutical companies just acquired them to obtain their research.

http://www.motherjones.com/news/qa/2004/09/09_401.html
http://bernie.house.gov/prescriptions/profits.asp
 
Darat said:
And as I was saying this is nothing special or unique to the pharmaceutical sector. All companies that have to innovate through R&D face the exact same problem.
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Well, not necessarily...

A few years ago, Nestle's rebranded their well-known chocolate milk here in the US. What had been known for decades as "Nestle's Quik" one day became "NesQuik." The new bottles had a blurb on them, bragging, "NEW NAME!! NEW LOOK!! SAME GREAT TASTE!!!"

In English, that means, "It's the same old product."

I somehow think the Nestles people didn't have to put as much R&D into this as GenenTech...
 
BPSCG said:
Well, not necessarily...

A few years ago, Nestle's rebranded their well-known chocolate milk here in the US. What had been known for decades as "Nestle's Quik" one day became "NesQuik." The new bottles had a blurb on them, bragging, "NEW NAME!! NEW LOOK!! SAME GREAT TASTE!!!"

In English, that means, "It's the same old product."

I somehow think the Nestles people didn't have to put as much R&D into this as GenenTech...
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That's marketing not R&D!
 
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