Cost Factors - Prescription Drugs

Technology plays a key role in the research and development of new drugs. While technology adds to the costs of these drugs, experts point to advertising as a leading reason prescription drug costs are skyrocketing.

Advertising Dollars spent
Click image to enlarge

Drug makers spend billions of dollars a year on advertising, including television commercials. Would it surprise you to know that Pfizer, the makers of Viagra, spent more money advertising this one drug in 2002 than DaimlerChrylser spent promoting Chrysler Group or Mars spent advertising the popular M&M's candy during the same year?

Advertising has two side effects on drug costs that are ultimately paid by consumers and insurers. First, it adds to the cost of the drug. Second, it increases consumer demand by encouraging people to ask their doctors for a specific brand-name drug. They often do so without knowing whether it is the best treatment for their condition.

Also, advertising keeps many consumers from asking about generic drugs, those unadvertised drugs that provide the same effectiveness at a fraction of the cost.

See the Prescription Drug section for more information on this important subject.

- Back -