Belmont Club

By Richard Fernandez

Bio

Get Updates From Richard Fernandez
A Comment About

Getting better

July 25, 2009 - 4:37 pm - by Richard Fernandez
Cowboy
2009-07-25 22:06:12

My take on why the big drug companies drop so much into marketing is that they feel they have to.

I blame the FDA for this. Correct me if I misunderstand the situation, but it goes like this:

Many drugs are being developed, few of which wind up panning out. This is an expensive process. Once one does look promising, a request for approval is submitted to FDA, and right then the clock starts ticking. Working with data from trials conducted at the drug companies’ own expense approval or disapproval is given after a review process that takes years.

Then, the drug company can sell its drug to the American public. Note that the clock started ticking years before, and what this clock is ticking down is the number of years that the drug can be sold as an exclusive product before the generics arise to drive down its profitablity.

This eroded window of time in which the drug companies have to recoup their wide costs has two effects. First, the drugs are much more expensive than they would be if the window was bigger. Secondly, heavier marketing blitzes become more justified. Get the word out, boys, time’s a-wastin’!

A solution might be to lenghten the window, or at least start the clock ticking upon approval rather than submission. Also, maybe something can be done to help the original patent holder’s profitability against the generics competition, like maybe a minimal leasing fee like ones that exist in other industries (i.e, Honda, GM and Ford’s leasing of some hybrid technology from Toyota).