Today, I became a big beneficiary of the enormous marketing budgets of pharmaceutical companies. I know many of y’all suspected it all along. But sadly, there was no massive check waiting for me in the mail today. No, what happened is, I went to the pulmonologist for a lung function test, because my asthma has been steadily getting worse for months.
The bad news is what I already knew–I am no longer well controlled
enough with Singulair and a rescue inhaler, and I need to go on inhaled
steroids. The good news is that I left with an armful of free samples,
so that I can figure out which inhaled steroid works for me most
cost-effectively. That’s courtesy of those bloated marketing budgets
you hear so many complaints about, more than half of which go to free samples.
This isn’t such a great deal for the pharmaceutical industry, since
otherwise I’d be paying full freight for one of their products. All it
does for the pharma firms is buy them a seat at the table–a chance to
win my business. But it’s a great deal for me, and millions of
consumers like me who get a chance to try multiple products before we
commit to one.
One of the things that bugs activists about this practice is that the
pharmaceutical companies record the cost of the marketing as the full
price of the product, not the cost of producing it. But this is
actually the right accounting rule, precisely because of what I
outlined above: the samples cost them a full price sale. One could
argue that it should be slightly lower, because I might have insurance
which would pay a discounted rate for the product. But whatever the
exact right price is, it’s closer to the market price of the product
than to the production cost. Keep that in mind the next time you hear
someone complaining that pharma spends more on marketing than
development; if it weren’t for all those free samples, and the reps who
bring them to the doctors, they’d spend considerably less.
