Plus stock buybacks and dividends are being criticized? Returning money to investors is “bad”? Who do you think provides capital for drug development? The Grenadier Guards?
That's incorrect; promotional spend on prescription drugs is the globally suboptimal result of a prisoner's dilemma where the prosecutors are going around saying "hey, that guy over there snitched, so should you". There is absolutely no guarantee that ROI is positive.
> Who do you think provides capital for drug development? The Grenadier Guards?
Most of basic drug development happens in labs e.g. at universities that are funded mainly by public sources.
Per the latest PhRMA member survey, drug companies spent about $13 billion per year on preclinical R&D, which was about 15% of their total R&D spend. Meanwhile the NIH alone provides about $40 billion per year for preclinical research. So funding for actually finding new drugs and therapies is dominated by other funding sources than drug companies.
If you look at e.g. Pfizer and J&J, more than 85% of their revenue comes from drugs that were invented elsewhere. Just to clarify, I'm not saying clinical trials isn't a necessary and expensive thing. But in large part it's not developing drugs, it's checking that there are no big side effects and that efficacy remains what you saw at small sample sizes.
For instance mRNA vaccines were invented in publically funded laboratories. Monoclonal antibodies that work against inflammation is another example. And of course CRISPR, which is very promising.
In the example you bring up. Moderna raised and spent billions over a decade since it was founded on the 'academic invention', and didn't have a product until their vaccine. The same is true for BioNTech. There was a large chance these companies could have folded, and before the pandemic, most were deeply skeptical.
“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” – James W. Frick
If you can produce a drug for 1$ a dose and you can sell it for 100$ at most without losing customers, you do that.
If your product costs are too high, you don't advertise. You sell the drug to the government as an "orphan drug".
Suppose you can sell 1 million sandwiches at 5$ or 1/2 a million at 6$ which you price depends on your cost of production. If it’s costing you less than 4$ you pick the first option if it’s more than 4$ and less than 6$ you pick the second. Though in the real world costs aren’t independent of sales so it’s even more complicated.
It’s only when you get extreme markups from a guaranteed monopoly that you can approximate things as revenue maximization. Also, drug R&D numbers are extremely inflated as among other things it’s got tax advantages.
My whole post is the exception you mention in your third paragraph. Your first paragraph is what happens when you have generics, and they start treating the drug more like a sandwich that a treatment. (No bioequivalence tests, safety concerns, etc)
That should scare everyone and I’m not sure why it doesn’t. They wouldn’t be advertising them if it didn’t increase sales, which probably means oncologists aren’t always prescribing what’s best.
As far as other medications, most people don’t go to the doctor regularly. Even if they did, they would probably need to inquire about their condition to have the doctor think of updating anything.
I remember having to personally call a doctor and ask them to stop prescribing a drug because it was pretty much malpractice to not use the newer approved drug from another company.