“Pharmaceutical companies spend 19 times more on advertising than on research. Just a friendly reminder that they never cared about your health,” claims a post circulated on the social network Facebook.
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The number mentioned – 19 times – is not fabricated, but its meaning is distorted. This ratio comes from a 2012 article published in the medical journal British Medical Journal (BMJ) by Donald W. Light and Joel R. Lexchin titled “Pharmaceutical research and development: what do we get for all that money?”.
However, the authors compared marketing expenses not with all pharmaceutical companies’ spending on scientific research and experimental development (R&D), as the Facebook post suggests, but only with funds allocated to basic research. According to the authors’ calculations, these accounted for about 1.3% of the companies’ sales revenue.
Basic research refers to scientific studies primarily aimed at gaining new knowledge and understanding the fundamental principles of phenomena, not necessarily immediately creating a specific product or practical solution.
In the pharmaceutical field, this could be, for example, research investigating how a certain disease develops, how a specific biological mechanism works, or what effect a particular molecule has on cells. This differs from later stages of drug development – creating specific drug candidates, preclinical and clinical trials, and other R&D activities.
Therefore, basic research should not be equated with the evaluation of a specific drug’s safety and efficacy. Those are later stages of drug development, including preclinical and clinical trials.
Before a drug reaches the market, its quality, safety, and efficacy must be assessed according to legal requirements, and safety continues to be monitored after registration.
Thus, the 1.3% figure mentioned in the 2012 article, referring to basic research, does not show how much pharmaceutical companies spend on all drug development, clinical trials, or safety evaluation stages.
What was the scientific article about?
In the 2012 British Medical Journal (BMJ) article, Donald W. Light and Joel R. Lexchin examined a much broader issue than just pharmaceutical companies’ advertising expenses.
The authors questioned the then-common claim by industry representatives and politicians that the pharmaceutical sector is experiencing an “innovation crisis,” where developing new drugs becomes increasingly expensive, and fewer new drugs reach the market.
According to their assessment, data from the U.S. Food and Drug Administration (FDA) did not show such a long-term declining trend: the number of newly approved drugs, excluding fluctuations in individual years, remained fairly stable.
However, the authors saw another problem – a large portion of newly approved drugs, in their view, do not provide significant therapeutic advantages over drugs already on the market.
Based on previous analyses, the scientists indicated that about 85–90% of new drugs provided patients with little additional clinical benefit or none at all.
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The authors linked this to the pharmaceutical industry’s business model, which encourages creating many variations of already existing drugs and heavily marketing them, rather than focusing on fundamentally new treatment methods.
It is in this context that the article discusses pharmaceutical industry expenses. According to the authors’ calculations, after deducting taxpayer subsidies, companies allocated about 1.3% of sales revenue to basic research aimed at discovering new molecules.
At the same time, marketing, based on their cited independent assessment, accounted for about 25% of revenue. Comparing these two figures yields the 1:19 ratio – the share allocated to marketing was about 19 times greater than the share allocated to basic research. This is not a comparison of marketing and all scientific research and experimental development (R&D) expenses.
What is the reality?
When considering all pharmaceutical industry expenses on scientific research and experimental development (R&D), not just basic research, the picture changes fundamentally.
According to the U.S. Congressional Budget Office (CBO) data, in 2019 pharmaceutical companies spent about 83 billion U.S. dollars on R&D. And a study published in JAMA calculated that total medical marketing in the U.S. in 2016 cost 29.9 billion dollars.
Of this, 9.6 billion dollars went to direct-to-consumer advertising, and about 6 billion dollars to prescription drug advertising. Although these figures are from different years and calculated according to different categories, they show one clear thing: total pharmaceutical industry R&D expenses are much higher than advertising expenses.
Therefore, the claim that advertising spending is 19 times higher than research spending arises only when advertising expenses are compared not with all R&D, but only with a narrow part of it – basic research.
Peer-reviewed scientific research data show that developing and approving a new drug is a long and expensive process. From initial concept to market entry, it can take on average about 12 years, and total costs often exceed 1 billion U.S. dollars.
One of the most frequently cited modern assessments, published in JAMA and covering drugs approved by the U.S. Food and Drug Administration (FDA) from 2009 to 2018, found that the median cost of developing one drug was about 985 million U.S. dollars, with an average of about 1.3 billion U.S. dollars.
The U.S. Congressional Budget Office (CBO) also notes that these estimates vary widely across studies – from less than 1 billion to more than 2 billion U.S. dollars per drug, depending on the methodology used and the costs included in the calculations.
15min verdict: lacking context. The claim that the pharmaceutical industry spends 19 times more on advertising than on scientific research distorts the meaning of the original source. In the 2012 article, marketing expenses were compared not with all scientific research and experimental development (R&D) expenses, but only with the portion allocated to basic research. Considering all R&D expenses, they are much higher than the amounts allocated to advertising. Therefore, the claim circulating on social networks is based on a real number but presents it without essential context and creates a misleading impression.
Publication prepared by 15min in cooperation with Meta, aiming to stop the spread of misleading news on the social network. More about the program and its rules – here.
