Tuesday, May 5, 2009

PhRMA on IOM; When Will They Come Clean on Costs?

By way of reminding me that the Pharmaceutical Research and Manufacturers of America keep an eye on this blog, soon after I did my last post on the new IOM report on conflicts of interest, a very polite person there e-mailed me to be sure that I had seen their news release and comment on IOM:


The statement is what we have come to expect from PhRMA: they are wonderful people who discover lifesaving new drugs; conflict of interest is a serious matter but let's not go overboard and jettison information-sharing that can enhance patient care; the new PhRMA Code of Conduct is really what is needed to eliminate worrisome practices, anyway.

In passing, however, the following paragraph appears in the comment (specifically quoting PhRMA senior VP Ken Johnson):

"Additionally, it is important to clarify that America’s pharmaceutical research companies spend far more on research and development (R&D) than on marketing. In 2007, pharmaceutical companies invested $63.2 billion on R&D of new medicines, while spending around $11.5 billion on promotional activity directed to physicians, journal advertising and consumer advertising, according to IMS Health. Last year, pharmaceutical companies spent a record $65.2 billion on R&D. "

Now, as I go to lengths to explain in HOOKED, these figures are (as best as one can tell) bogus. PhRMA continues to trot out these figures, but economists and investigators not tied to the industry continue to refute them. Even IMS Health pegs the total promotional expenditures at nearly $30B annually, not $11.5B. And the best independent study I know of has put the actual numbers at around $57B (see: http://brodyhooked.blogspot.com/2008/01/what-are-true-costs-of-drug-marketing.html). Anyone who has analyzed the data the drug firms file with the SEC has concluded that on average a big company spends about 3 times as much on marketing as it does on R&D. We also know the companies pad the R&D figures like crazy and shift as many costs as they can out of the marketing column and into the R&D column.

In my years of doing research on the industry, I have read the various published studies that call the PhRMA figures into question, but I have yet to see a straight-out reply or rebuttal from PhRMA of its minions. Instead they baldly repeat their own figures over and over. They never explain how it is that independent analysis have come up with completely different numbers.

One has to wonder--when they won't come clean on something as basic as this, just what is it that they say that we can credit as trustworthy?

1 comment:

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