Stanford University Home

Stanford News Archive

Stanford Report, May 21, 2003

Study calculates outlay of pharmaceutical marketing Drug companies promote through multiple channels


Few would dispute that the U.S. pharmaceutical industry devotes considerable resources to promoting its products. But exactly how much money is spent on drug promotion efforts, and how is that money spent?

A study by researchers at the Stanford Center for Research in Disease Prevention provides the first detailed, comprehensive picture of the pharmaceutical industry’s drug promotion efforts in advertising and marketing, estimating that the industry spent $12.7 billion promoting its products in 1998.

Based on their findings, the researchers say physicians and consumers should be aware of the magnitude and influence of drug promotion efforts and should seek out multiple sources of objective information instead of relying on pharmaceutical advertising or pitches by drug-industry reps.

"We doubt that many physicians and consumers realize how extensive these promotion efforts are and how big an influence they can have" on which drugs are sought by and prescribed to patients, said Jun Ma, MD, PhD, a researcher at the center and first author of the paper, which appears in the May issue of Clinical Therapeutics.

In a first-of-its-kind study, Stanford researchers pinpointed the amount of money spent on pharmaceutical promotion activities in 1998. The bulk of the $12.7 billion outlay went toward distributing free samples to doctors’ offices. Direct-to-consumer ads, however, have grown in popularity in recent years.Illustration: Amy Feldman

"Knowing that drug promotion is done primarily for marketing — not education — physicians and the public need to analyze this information more objectively and be more proactive in seeking out information" about the products being promoted, explained Ma.

The study is based on 1998 data from IMS Health, an independent pharmaceutical market-research company, on drug promotion expenditures for the 250 most promoted medications in the United States. Researchers analyzed the data to determine the amount of money spent marketing these products and the principal strategies used to promote them.

The resulting estimate of $12.7 billion is high not only in absolute terms but in relative terms, Ma noted, as the pharmaceutical industry ranks 34th among the 200 U.S. industries with the largest expenditures devoted to advertising.

The study also found that drug promotion efforts by pharmaceutical companies were concentrated on a relatively small number of medications rather than on all products across the board. Promotion of the top 50 drugs, for example, accounted for 51.6 percent of total drug-promotion spending in 1998.

The study found that the most dominant drug-promotion strategies in 1998 were traditional, time-tested methods. Free samples given to physicians totaled $6.6 billion of retail value, representing 51.9 percent of the drug promotion expenditures.

Pitches by drug-industry representatives to in-office physicians — a practice known as detailing — totaled $3.5 billion, accounting for 27.8 percent of corporate marketing outlay. Ads in medical journals totaled $540 million, representing a modest 4.3 percent of total drug-promotion expenditures.

The study also found that direct-to-consumer advertising techniques have become an important component of the pharmaceutical industry’s promotional efforts for several drug classes.

Consumer-targeted drug ads totaled $1.3 billion in 1998, representing 10.5 percent of all drug promotion expenditures.

Unlike free samples and detailing, which are widely used to promote all types of medications, direct-to-consumer advertising was used to promote only a few types of medications, including those for smoking-cessation, allergies, urinary tract symptoms and menopause symptoms.

Given the prevalence and influence of direct-to-consumer advertising, senior author Randall S. Stafford, MD, PhD, explained that physicians should be aware of which drugs are being promoted this way so they can anticipate patients’ inquiries and be prepared to respond.

Physicians, for example, could seek evidence-based information about which of their patients are most appropriate to take the medications being marketed. Stafford, an assistant professor of medicine at the Stanford Center for Research in Disease Prevention, noted that consumer-targeted ads tend to be brief and general and that patients may lack the knowledge to properly assess their need for the medications.

The study’s authors explained that "pharmaceutical marketing has been criticized as excessive and for contributing to the overuse and misuse of drugs." But they also acknowledged that drug promotion efforts can play a role in helping to educate physicians and consumers about certain medications and increasing awareness of some medical conditions.

The Stanford study did not examine whether these efforts have an overall positive or negative impact on patient outcomes or physicians’ prescribing behavior; that question is being addressed in another Stanford study currently under way.

While the media and health-care industry groups have published reports on drug promotion expenditures, the Stanford study is one of the first academic research efforts to explore the topic in depth.

The research was funded by the Agency for Healthcare Research and Quality and was conducted in collaboration with colleagues at Boston University and the Massachusetts Institute of Technology.

Studies focus on popular health remedies (5/14/03)