Pricing Issues Of The Pharmaceutical Industry

1319 WordsDec 9, 20166 Pages
Sarah Brinkley MKT 492 Dr. Kelli King December 12, 2016 Pricing issues in the pharmaceutical industry Pricing issues in the pharmaceutical industry is a huge problem in the world today. There are four main issues that cause the prices to be higher than they need to be. These issues are Cost, Value, Power, and Insurance. Lots of pharmaceutical companies will argue that their R&D costs of manufacturing drugs is what makes them price the pharmaceuticals the way they do. How true is this? We all know that research and technology is expensive, but is that what they are spending the most money on? The answer is no. 9 out of 10 pharmaceutical companies are spending double of the amount they spend on R&D on marketing with the highest being $17.5 Billion. While marketing is a important part of the selling process the pharmaceutical companies would rather blame R&D costs than tell the consumer that it’s because they are spending it on marketing. Big Pharma,which has been a main contributor in innovation, has increasingly de-committed itself from the high-side of R&D and is letting smaller biotech companies and the National Institute of Health do most of the heavy lifting. The National Institute of Health is actually a government funded program that has invested close to $900 billion in research since the 1930s. With that being said, the consumer is essentially paying twice for pharmaceutical research. However, just because they are spending less doesn’t mean that they
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