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Blog & Resources Camargo Blog February 23rd, 2010

Spending on DTC Advertisements

At GPhA last week, one of the CEO’s on an industry panel said that big pharma spent more on DTC (direct-to-consumer) advertising than on R&D. Clearly, generic companies don’t like this promotional activity, but I was skeptical of the facts. A quick Google of DTC costs brought an article in the New England Journal of Medicine with the following table:

dtc-spending

N Engl J Med. 2007 Aug 16;357(7):673-81. A decade of direct-to-consumer advertising of prescription drugs. Donohue JM, Cevasco M, Rosenthal MB. Department of Health Policy and Management, University of Pittsburgh Graduate School of Public Health, Pittsburgh, PA 15261, USA.

Okay, we’re sure it has gone up since 2005, but you’ll notice that spending on DTC advertising is a small fraction (14.2% in 2005) of the total cost of promotion.

Turning to R&D expenditures, I went to the PhRMA site and found this report, showing a total of $50.3 billion was spent in 2008 on R&D.

Thus, the CEO misstated her facts. But I clearly hear the sentiment – that DTC hurts adoption of generics. Maybe that fact should be checked too?



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