Friday, November 26, 2004

Vioxx recall and direct to consumer advertising

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If you are sick of television and print media full of ads for prescription drugs, you are not alone. According to Cutting Edge Information, the pharmaceutical industry's direct-to-consumer spending rose steadily by 61% from $1.1 billion in 1997 to $2.8 billion in 2002 (latest year for which data is available). The research found that DTC spending accounted for more than 13% of the industry's overall marketing spend for prescription drugs last year. Some of the most highly promoted prescription drugs have been Vioxx, Prilosec, Claritin, Paxil, Zocor, Viagra, etc.

The reason that a typical pharmaceutical firm spends more on advertising than on research and development (R&D) is that it works. The cost of drug development has continued to soar and is estimated to be approximately one billion dollars from concept stage to commercialization. What that means is that blockbuster drugs have to be advertised heavily to get the maximum return on investment (ROI), some of which goes back into R&D while the rest is given to shareholders. Investments in drug stocks have generally been very lucrative.

But tens of thousands of people who have died in the United States alone from taking Vioxx raises some serious questions about the ethics of direct-to-consumer advertising by pharmaceutical firms. At this time, US is the only country that allows this. There are reports that Merck knew as early as 2000 that there were problems with Vioxx and people were dying or having heart attacks but instead of withdrawing it, it increased its advertising budget.

If you are a consumer then you have to be extremely careful when believing what a pharmaceutical company tells you in its advertising. It is best not to discuss specific drug names with your doctor because these decisions should be left to the doctor. Little knowledge is always dangerous and when you are falling into the trap laid by the drugmaker, you are putting your life at risk, as has been clearly shown by the Vioxx case.

Recommended article: Vioxx recall leads to doubts about overall drug safety