Do High Drug Prices Pay For Research Or Advertising ?

If you've had to get a prescription recently, then you know that the prices of those drugs are outrageously high, especially for new drugs that don't yet have a generic equivalent. For many years, the drug companies have told us that this is necessary so they can recoup the costs of expensive research. The people and the government have accepted this as fact without doing much research into the realities.

But now it turns out that we may not just be paying for the companies to recoup research costs. In fact, the drug companies spend less money on research and development than on other things. This became clear recently when Pfizer signed a disclosure agreement with the government after it was accused of promoting their drugs for off-label use (use for things other than what the FDA had approved them for).

Pfizer said it had paid about $20 million to doctors and other medical professionals "for consulting and speaking on its behalf in the last half of 2009." Of course, these are the same people the company is counting on to prescribe their drugs and encouraging others to do the same. This is not a medical or research expense. It is an advertising expense (and that doesn't include the huge amounts spent on TV and other forms of advertising).

Meanwhile, during that same period, the company spent about $15.3 million on actual research and clinical trials. In other words, advertising dollars easily dwarf the amount spent on actual research. While the company (and other drug companies do the same) has been telling us the high prices for new medicines is to recoup research costs, much more of the money goes to recouping advertising costs than research costs.

For many years now, these drug companies have been negotiating discount prices with other countries while soaking Americans with higher prices. It is time for that to stop. It is time for the government to negotiate lower prices for Medicare and Medicaid. It is also time for the government to allow the re-importation of lower-cost medications from other countries.

We must stop feeling sorry for Big Pharma and allowing it to charge exorbitantly high prices for drugs. If they need help in research and development, then the government should give them some help (on the condition they open their books to government accountants), but the American people deserve and should get low-cost drugs.

Given the choice between protecting Big Pharma's windfall profits and letting the people buy drugs at a reasonable price, the U.S. government should be on the side of the people. Why isn't it?