Healthy Skepticism Library item: 3334

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Journal Article

Comanor WS.
The political economy of the pharmaceutical industry.
J Econ Lit 1986; 24:(3):1178-1217

Abstract:

(Limited to parts of article dealing with promotion.) There is little doubt that industry selling efforts have a substantial effect on the prescribng behaviour of physicians, buy it is unclear if much advertising is deceptive and misleading. Various reports have estimated outlays on promotion from 10-15% of sales up to 20-25%, but the lower figures did not include all forms of promotion. Early research suggested that the main purpose of promotion is to place small firms and new entrants at a competitive disadvantage however this hypothesis is not readily subject to empirical testing and the supporting evidence is largely impressionistic. Another hypothesis is that more innovative firms spend larger sums on promoton than others so that advertising is used generally for procompetitive ends. One study found that the relationship between promotion and sales is brand-specific and depends critically on both the product’s position in the innovative race as well as the therapeutic characteristics of the product. There is also a question about whether the level of expenditure on promoiton is optimal for informational gains.

Keywords:
*nonsystematic review/promotion costs and volume/value of promotion/competitive consequences of promotion/ market share/INFLUENCE OF PROMOTION: MARKET SHARE/VOLUME OF AND EXPENDITURE ON PROMOTION Economics, Medical/history* History, Modern 1601- Legislation, Pharmacy/history* United States