Pharmaceutical companies have become vilified by the American public and politicians, on par with “big oil” and companies like Wal-Mart. Although they sell products that literally save lives and have enabled humans to live to ripe old ages, they are thought of as the bad guys.
This reputation comes, presumably, because drugs are expensive to create and manufacture, and those costs are passed along to the consumer – costs that can be prohibitively expensive if a patient is under-insured. However, getting a new drug to market costs nearly a billion dollars. The approval process almost requires every new product to be a blockbuster before it goes generic, and for every Viagra there are more products like Exubera (inhaled insulin) that fail to catch on and end up as major losses.
Pharma companies are also criticized for their marketing tactics, including employing reps that interact with physicians. Of course, politicians are getting in on the act by seeking to regulate these interactions between companies and physicians. As Paul H. Rubin points out, the authors of this proposed legislation seem to assume that there is something wrong with pharma companies marketing their products to the individuals charged with prescribing them. They also seem to think very little of physicians, who of course realize reps are selling a product, but also know they are an important resource:
Drug company reps offer overworked doctors useful, lifesaving information in an efficient manner. The drug companies are of course motivated by profit, but economists have known since Adam Smith that the profit motive is the best way to induce someone to do something useful.
I should offer a disclaimer: I currently do work for pharmaceutical companies. In the past I’ve worked at a non-profit organization dedicated to advocacy and education, and sponsorships from pharma companies enabled us to provide important health education and programs to individuals at no charge. I’ve worked at a hospital where physicians and educators relied on pharma reps to inform them about developments in the treatment of diseases.
No industry is completely free of problems, and the pharmaceutical industry has them. However, for an industry that has done as much to improve the human condition as pharma, the amount and scope of criticism they have received of late is undeserved.
0 Responses to “In defense of “big pharma””