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Okay, lets just take Pfizer as an example. From their 2015 financial report...

      Research and development expenses: $7,690 million
      Cost of Sales: $9,648 million (Note this has nothing to do with sales in the marketing sense, this is what it costs to make/buy what they sell)
      Selling, informational and administrative expenses: $14,809 million (Note this includes most non-production and non-R&D costs including insurance, rent, shipping and handling, IT, executive compensation, property taxes, legal expenses, et al.)

So, by the traditional sense, the "marketing budget" (which is some fraction of SG&A) isn't an "order of magnitude" greater than R&D expenses since, in common usage, the term "order of magnitude" implies a power of ten - i.e., at least 10x. It's well less than a factor of two.

If someone goes on a rampage killing CxOs when the CxOs are following the law, of course those rampaging people should be put in prison for the rest of their lives or, if the state has the death penalty, executed -- just as if they killed you because they didn't like you. Do you support people who kill abortion doctors just because they perform legal abortions but the killers just don't like that?

It's shocking to hear someone hoping for innocent people to be killed. Have you considered ISIS as a career?

Of course I'm defending "those people" from jail time. They haven't broken any laws. Just as I would defend you from jail time because you exercise your First Amendment rights to speak out against them. Of course, I would not defend your right to incite people to riot and kill -- something you are edging up against -- as that is not protected First Amendment speech.

Questions we are not supposed to ask while we heap praise on them for their high-minded morals:

1. Do they supply the sorts of meds that people get hooked on and ruin their lives using? Why, yes, they do. Do they track where it all goes to make sure eveyone with a legitimate use can get it but it does not flood the streets? Apparently not. Many addicts of such drugs were not violent criminals out abusing innocent people, but rather became addicts after using pain meds in a medical situation before eventually going on to die of overdoses. There's a lot of money made every year, however, by drug companies selling far more narcotics than the legitimate market demands. It's not really in their interests to know where all the excess is going since they make money on every bottle they sell. How many otherwise-innocent people are dying every year from their more-lucrative drugs? Hint: more than were being legitimately executed after being convicted by juries of committing some of the most evil violent crimes.

2. Do they supply drugs for abortion? Why Yes, they do.

Like many "progressives" they are opposed to executing violent convicted murderers who've had their day in court and exhausted all their appeals, but have no problem at all supporting the murder of the only human beings we are all certain are absolutely innocent, unborn children. To oppose abortion AND the death penalty makes rational sense as a total pro-life position. To oppose abortion and support the death penalty makes sense as a pro-innocent-life position and even a position that says "all life is precious, and so much that no murderer can pay for the crime with anything less than his own life". To support abortion (killing the innocent) and oppose the death penalty (preserving the guilty) is a complete inversion of the very idea of morality.

Someone else's mom then. Here's an article on the Pfizer lung cancer treatment that you don't want her to get.

I see no benefit to society in subsidizing a profitable industry. If you look at the financial statements of American drug companies you see they spend very little on R&D. http://www.pfizer.com/files/in... (page 31) These guys spend less than 15% per year on R&D.

And to add to my previous post. Let's just enumerate a list of some of the vitamin brands sold by a couple of the big name pharma companies.

Bayer:

One A Day
Supradyn
Flintstones Vitamins
Pluravit
Elevit
Redoxin

Pfizer:

Centrum
Emergen-CStresstabs
Clusivol
Trihemic

Oh and to throw in, Pfizer even has a web page extolling the virtues of taking vitamins. Funny since you would have us believe they are against them, no?

GlaxoSmithKline:

Cetebe
Rutinoscorbin
Scott's Emulsion

For people who hate vitamin supplements it's amazing how many brands just those 3 companies alone sell, no? And that's not including all the other nutritional supplements they sell which would add at least another 10 or 12 items. So this notion that big pharma hates vitamins, etc. is pure bunk.

http://www.pfizer.com/files/annualreport/2010/financial/financial2010.pdf page 53 says it all. About twice as much on advertising as on R&D. Not counting the sales 'scientific' conferences they fund from the R&D budget...

Many medicines are sold for profit margins that are hard to justify to anyone with a conscience. It's fine for drug companies to make a profit, a handsome profit even. But resources for medical care are finite and just because a drug company is able to charge a lot doesn't always mean they should.

In large businesses, profit is reinvested in the company. A few percent might go to bonuses for executives or dividends to shareholders, but the vast majority will be invested in expanding the business in some way. (E.g., Pfizer pays its CEO around $15 million – under 0.05% of its $50 billion annual revenue.) In the case of a drug research company, much of the profit probably goes into R&D, since that's probably their biggest expense. (Pfizer's Annual Report for 2009 says $7.8 billion in R&D expenses.) So the high drug costs are funding more drug research. Where do they get R&D money from, after all, if not from drug sale profits?

Put another way: if you cut drug company profits, are they going to make up for it by cutting dividends and executive salaries, or by cutting R&D and releasing fewer innovative drugs? Take a guess. If you want to cut drug costs, you have to cut R&D costs – like by making drug approval trials much, much cheaper.

It is very easy to make unsupported grandiose accusations against big corporations. "All the important work is publicly funded"? Completely false. Just look at the list of new drugs coming out from Big Pharm, http://www.drugs.com/newdrugs.html. Some of these are quite significant and not publicly funded.

Take a look at http://media.pfizer.com/files/research/pipeline/2009_0331/pipeline_2009_0331.pdf. Out of 100 clinical trials underway at Pfizer only 22 are "new indications or enhancements"

Could they be spending more on R&D and less on marketing? Probably. Are they spending large amounts of money on new research? definitely

The logic behind only researching improvements is flawed for a couple of reasons:

1. Viagra had to be invented somehow. There had to be R&D money spent to create it in the first place.

2. Diminishing returns; There is only so far one can push a drug. Eventually they will be unable to sustain growth. By creating new drugs they open new markets and therefore ensure the life of the company.

You're delusional if you think that these companies are the most efficient way of getting money spent on the research and development of new drugs.

According to their Financial Report 2008, Pfizer spent $2.6 billion on advertising in 2008. The rest of SIA is used for "shipping and handling, information technology and non-manufacturing employee compensation". I don't know if the G&A expense of FDA trials falls here or in R&D, likely some of it is spread over both depending on the tax laws. The average cost of clinical trials has risen to nearly 60% of total development costs, compared to just over 30% in the 1980s.

I am sure that if Pfizer didn't spend $2.6 billion on advertising that they would not have $48.3 billion in revenue, in which case they most likely would have had less than $8 billion to spend on R&D...

But please, if you think you can run a more efficient company, start one and beat them if it is so simple! I've run my own company, dealt with overhead and marketing costs, and it is tough.

But this generally isnt as you say it. Pharmecuticals only spend 15% of their revenue on research, as reported in their own statements[1]. And then of that the majority goes to evading each others patents, not actual science of any sorts. Most of the money and research is done with public money from the NIH and such, and done on a competitive bidding system with publicly available papers, none of this requires the current type of pharmecutical system, structured only on new drugs, and on patents. If we got rid of that model we would be able to spend more on research, less on health care (of which alot is government money), treat people better, AND get rid of the horrible pharmaceutical advertising that takes most of those companies budgets and disgraces the medical profession.

The US does have a amazing public funding for research, but i dont think that is so heavily linked to the medical system as you make it out to be, at least in the pharmaceutical world.

[1]
http://www.novartis.com/downloads/investors/reports/AR06_E_web.pdf - p 143
http://www.pfizer.com/pfizer/annualreport/2006/financial/p2006fin13.jsp
http://www.astrazeneca.com/article/11183.aspx

I think you're being ignorant. I used to work (okay fine, intern) for one of the largest biotechnology companies, so what's your point? Take Pfizer, for example (or any other pharmaceutical company - I just happened to choose this particular one). If you look at their most recent annual report, you'll see that they made $48 billion in revenue. R&D costs were approximately $7.6 billion, whereas "Selling, informational, and administrative expenses" - i.e., mostly marketing - was $15.6 billion. Generally, marketing costs are about twice that of R&D. And for Pfizer, they apparently spent billions on R&D, yet they still made over $19 billion in income/profit.

And the government has always picked up the tab for drug research, or any sort of research. Here's an article titled "Drug Companies Profit from Research Supported by Taxpayers". There has always been federal funding for research, whether it be academic research or private research (like pharmaceutical and defense companies). It's just a matter of the person's ultimate goal.

Don't get me wrong, I'm very grateful to the company and really enjoyed working there. If you want to learn more about your company, perhaps you should read the annual reports and understand the drug development process and the role of the FDA - or maybe anything else that interests you about the company.

Oh please...it totally is true. Most of the research, especially preliminary research, that goes into the development of a new drug comes from publicly funded universities. The majority of the company's research costs are for clinical trials, which are expensive, but it's hardly the years of research you are talking about. In fact, often phase IV clinical trials (counted as R&D) have a large advertizing component to them because they have to recruit patients. In fact, as an example, take a look at pfizer's financial report for 2005. R&D is lower than the cost of selling, and significantly lower than "selling and administrative" costs http://www.pfizer.com/pfizer/annualreport/2005/fin ancial/p2005fin35.jsp

what do you think the ratio of new drug research is to profits? For a major drug company? Conversely, what do you think the ratio of marketing vs profits? Got a clue? No? Feel free to go do a little googling.

Here are the Financial Highlights from the annual reports of Novartis, Pfizer and AstraZeneca. They all spend around 15% of their revenues on research. The number is typical for the industry. The other 85% go to other things, according to their own figures. More than half their revenues are spent on marketing and profits.

So the standard argument for granting patent monopolies and allowing the pharma companies to charge whatever they want for the patented drugs - that they spend the excess revenues on research for new drugs - is simply not true.

The organization Doctors Without Borders gives an example of how pharmaceutical patents affect prices i a recent press release:

The case of AIDS illustrates the trend. While fierce generic competition has helped prices for first-line AIDS drug regimen to fall by 99% from $10,000 to roughly $130 per patient per year since 2000, prices for second-line drugs - which patients need as resistance develops naturally - remain high due to increased patent barriers in key generics producing countries like India.

To the western world, pharmaceutical patents mean an enormous waste of money. In the third world, it's lives that are wasted instead. It's time to think about an alternative.

And alternatives exist - plenty of them, in fact. Nobel prize winner Joseph E Stiglitz has made one proposal. The Swedish Pirate Party has made another (or essentially the same, actually). Economist Dean Baker has collected four others, that also run along the same lines.

It's time to open up a global discussion about the effects of pharmaceutical patents, and the alternatives. Today's system is not only grossly immoral, it is also expensive and wasteful. It's time for a better way. Pharmaceutical patents kill.

The wonderful thing about statistics is that they can prove anything!

Pfizer R&D budget for 2005 was 7 Billion (USD).
So they must therefore must have spent 70 Billion (USD) on marketing
But in 2005 Pfizer reported revenues of 51 Billions (USD).
So it looks like Pfizer lost 26 Billions (USD) in 2005 before including any other costs like Tax, Manufacturing, Debt etc.

Yet in 2005 Pfizer reported 9 Billion USD profits.

Source : http://www.pfizer.com/pfizer/annualreport/2005/ann ual/review2005.pdf

For example, in a recent press release they write:

The case of AIDS illustrates the trend. While fierce generic competition has helped prices for first-line AIDS drug regimen to fall by 99% from $10,000 to roughly $130 per patient per year since 2000, prices for second-line drugs - which patients need as resistance develops naturally - remain high due to increased patent barriers in key generics producing countries like India.

The standard argument for allowing the pharma companies to charge whatever they want for patented drugs, is that they spend the excess revenues on research for new drugs. But that is not true.

We can look at the numbers for Novartis, Pfizer or AstraZeneca.

They all spend around 15% of their revenues on research. The number is typical for the industry. The other 85% go to other things, according to their own figures. More than half their revenues are spent on marketing an profits.

So there are clearly better ways to finance drug research than to hand out patent monopolies to the big pharma companies, and hope that they will spend the money they make on research. Because clearly, they don't.

The Swedish Pirate Party has one proposal for an alternative system. Many others have suggested other alternatives.

But at least it is time for us to start discussing the problem in earnest. Today's situation is expensive, wasteful and completely immoral. There must be a better way.

Because they'd either go out of business or stop investing in such new drugs. Anyway, if you don't believe me, I found Pfizer's indigent drug assistance program in one google: http://www.pfizer.com/pfizer/subsites/philanthropy /access/index.jsp Here's their page detailing international AIDS/HIV grants: http://www.pfizer.com/pfizer/subsites/philanthropy /caring/global.health.hiv.intl.jsp

Because they'd either go out of business or stop investing in such new drugs. Anyway, if you don't believe me, I found Pfizer's indigent drug assistance program in one google: http://www.pfizer.com/pfizer/subsites/philanthropy /access/index.jsp Here's their page detailing international AIDS/HIV grants: http://www.pfizer.com/pfizer/subsites/philanthropy /caring/global.health.hiv.intl.jsp

I believe there's only one pharma company that still claims to be U.S. based (Merck)

If by "claims to be U.S. based" you mean "has their world headquarters in the U.S.", I believe you're wrong - there are also Eli Lilly, Bristol-Myers Squibb, and Pfizer, for example.

(Your other claims seem a bit bogus as well. Am I just responding to a troll here?)

That's possibly the coldest, worst thing that I've ever heard a company to do.

In 2004 Pfizer withdrew funding from a New Zealand based cancer research centre over a dispute with Pharmac, the government (well, crown) entity that purchases pharmaceuticals for hospitals and health programmes. http://www.auckland.ac.nz/uoa/about/news/articles/ 2004/05/0005.cfm

The people who run America's large corporations are by and large not nice people. (Yeah, that means you Mr. Niblack, and your fucking lawyers.)

What /. universe are you from?

pfizer's annual reports
Depending on what year you look at, you can see how they tell their stockholders about risks from their competitors.

basic scientific research

law enforcement... military defense

development of open protocols like TCP/IP

providing health insurance that doesn't leave you filing for bankruptcy if you get sick

I for one live in Connecticut, and i know that we are a target for terrorists. For we have major plants for kaman areospace http://www.kamanaero.com/ , Pratt & Whitney http://www.pratt-whitney.com/, Sikorsky http://www.sikorsky.com/, a Navel base in New London http://www.subasenlon.navy.mil/, a nuclear sub http://www.allsands.com/History/Places/grotonconne ctic_tz_gn.htm, and finally, the company that makes all your viraga http://www.pfizer.com/

In other news, Philip Morris acquires Pfizer's Nicotrol divison.

Story at eleven.

What does it profit America to gain the whole world, and lose its soul?

I don't think
those are
the type of
profits
they are
worried
about.

Yes, but you can only do this if you are big enough.

If the major insurers in the US for example would get together they could do the same thing (I guess: They do this already, but you don't get any of it) and everybody (well, minus the pharma companies) would profit.

Have a look at Pfizers financial statement, they're still doing rather well.

I also find it notable that I got my Flueshot here in Toronto yesterday without a problem while in the US people are standing in line for hours on end and then still have to go home (or come up to Canada). And there I thought people only stood in line in "commie land".

"Called EcoBot II, the robot is part of a drive to make "release and forget" robots that can be sent into dangerous or inhospitable areas to carry our remote industrial or military monitoring of, say, temperature or toxic gas concentrations," New Scientist magazine said on Wednesday.

If humans and other mammals do not want to or cannot live/work in these environments, why would insects find a locally dangerous or inhospitable habitat inviting? I don't of many common flies that can withstand high temperatures or toxic gas concentrations and be in a local environment in a large enough population to sustain the energy needs of a robot.

What scientists should be doing is finding ways that allow mammals to live/work in these toxic environments. For example, parasitic worms, the adult intestinal cestode, Hymenolepis diminuta, lives in the intestines of its host; it does not have a digestive system or any means of ingesting food from the host. It acquires its nutrients simply by absorbtion through the cellular membranes. More interestingly, these parasitic helminths have mitochondria that utilizes fumurate as the final electron pair acceptor with concommitant generation of succinate as the end product of its energy metabolism. Translation: This worm's mitochondria operate ANAEROBICALLY whereas the mitochondria in humans and other mammals operate aerobically (oxygen is the final electron pair acceptor with carbon dioxide being the end product of our energy metabolism). Scientists could start genetically modifying mammalian mitochondria to operate in both environments (this already happens naturally in clams and other aquatic muscles). This could allow human heart muscle to survive and function in low oxygen tension environments; hence, no or fewer heart attacks. Pfizer http://www.pfizer.com/ is agressively pursuing cardiac and lipid metabolism research for the treatment of artereosclerosis. Combining Lipitor and a research compound, torceptrapib, will likely prevent plaques and cholesterol from ever clogging up arterial pathways, so my argument is almost impractical, but interesting.

Yes, I'm a chemistry geek! Did you see my Slashdot user ID?

Most likely somebody swapped his vaseline with bengay.

Consider then that Pfizer spends $4.7 billion dollars a year getting earthbound objects to 'elevate' into space. Why not just give them licensing rights for a Viagra elevator, stick Bob Dole on it for the maiden voyage and have the whole thing sorted in a year?

Nor are "ideas" patentable. Nowhere in my post did I claim ideas were property. I did use the verb "steal" because it describes a diversion of money from one corporation to another by illegal means.

Over 80% of *all* big-Pharm R&D (top 7 pharmaceutical companies in the US) is funded by the gov't.

Could I get a source on this? I'm curious. I find the point irrelevant, however. The subsidizing governments are not the ones making the decisions.

multinational corporations, many of whom don't pay taxes (or pay very little)

Hmmm. So why does Pfizer's report "provisions for taxes on income" at a rate of 35%? Do I misunderstand the fiscal meaning of this term?

I would also like to address your discussion of rights. I agree that a way should be found to make basic medical care available to everyone. I simply do not feel that the best way to do this is to entirely dismantle this system of patent monopolies.

Another interesting topic is why the same antibiotics sold to humans cost such-and-such/pill, while they are sold at 1-10% of the price when sold to animals

Products for animals are less regulated. Testing and modeling drug interactions is much less expensive. Many animal medications are sold direct in bulk to farmers. The cost of animal care isn't inflated by comprehensive insurance or by as extensive malpractice suits. Many of these factors apply to all aspects of animal medicine. If you look at the prices to do a CBC (complete blood count) for a human vs a dog, you will probably be tempted to send your little red topped tube off with the vet and just look up the reference ranges for humans in a textbook.

CFR 21:11 , the Code of Federal Regulations, goes through this fully. In order to be "validated" as the real person, you must hold at least two of three key pieces of information:

1. Something you have: A keycard, a physcal key, an iButton
2. Something you know: A password, passphrase, memorized key
3. Something you are: Iris scan, fingerprint, voice, some other biometric.

1. Truly that person to which the biometric belongs, or
2. A conspirator, working with that person, since you cannot have obtained the second piece of information without consent from the holder

This is how our Federal Government looks at it anyway.

Biometrics have come a long way, and contrary to popular belief, this fingerprint-style technology does not compare a "picture" of your finger. It measures datapoints (the FingerChip for example, measures many more datapoints than most biometric scanners, and is a fraction of the size).

The "retraining" you have to do is so that your "personality" is measured as one of the datapoints. If this was a signature capture biometric, it would measure whether or not you dot your "i" before your words are finished, or after. That "personality" is set in the equation as part of the measurement. This is why even if you have someone's signature on paper, and can replicate it perfectly freehand, a good biometric will rule it out, since the "personality" (speed to write, dot i's first/last, etc.) will certainly not match.

But other companies manage to make drugs available for free to countries with serious AIDS problems, and still make a tidy profit from sales in developed countries.

So perhaps there is a better balance between capitalism and humanitarianism.

Males blink a certain sequence and hope to see an answering flash from a female.

God knows I could use an emulator for this.

It is just one more example of the prominent role played by NO in biochemistry. In humans, the molecule is crucial to the dilation of blood vessels and the signalling that goes on between neurons in the brain. Its part in assisting men achieve erection has been exploited by the modern impotence drugs like Viagra.

Sweet, so I should expect a drug from Pfizer soon that'll make my ass glow?

I love it how these companies use the "Whe need huge markups to pay for Research and Development" excuse to plea for patent extensions and their warefare against the generic drug makers.

For an example of how little R&D plays in these companies' cashflow, lets take a look at Pfizer's fourth quarter earnings report.

Firstly, they state many times that they are in a merger and the generally stagnent net is due to "Certain Significant Items and Merger-Related Costs" lest we think that the "Certian significant items" is research related, they state that "we invested $4.4 billion in Research and Development". Wow! that's a lot! more money than I'll ever see. Of course, this is from a company "with 2000 revenues approaching $30 billion"

So, wait a minute, pfitzer is saying that the cost R&D was only 15.7% of their gross income. This means that a generic drug manufactor selling a drug discovered by Pfitzer for 75% (a value that I think is very inflated, I heard a story on NPR a while back that said that the price of a drug can fall to a sixth of its original value after its patent expires) of it's original cost is actually making less profit on the drug after the cost of R&D has been removed from the equation.

It gets worse: Pfitzer stated that their "Full-Year Net Income [is] Up 25 Percent to $6,495 Million. That would be 6.495 Billion. So their net profit is 147% their entire R&D expenditures for 2000. Plus, Pfitzer says "while fully supporting our current products, including Lipitor, which had sales exceeding $5 billion, a Pfizer record.". So one drug had more sales than their entire Research and Development expenditures. I would also like to note that lipitor is a diet drug.

I discovered this information about Pfitzer because it was the first name of a pharmaceutical company that I could remember. I got their earnings report right off of their website, it took less than five minutes. Rather than blindly accepting the prophaganda, why not check out the facts?

These companies make massive amounts of money from their government mandated monopolies as they stand now, far more than it cost to research and and develop the drugs.

Many of these patented prescription drugs are themselves based on Government or nonprofit research. Although some noncommercial institutions have secured patents on possible application of their research, the proliferation of patents, cross-licensing, and profit-driven economic departments, is probably, on the whole, not good for scientific progress. (Indeed, the economic barriers associated with the basic research contribute, in small, but appreciable amounts, to the costs inherent in drug design.)

Although pfizer does comment on the cost of libaility lawsuits, they should also point out the legal infrastucture asociated with "intellectual property" defense and infringement. A half dozen interlocking patent disputes can prevent a firm from delivering a product to market in a timely fashion.

The patent system ensures that the technology that remains affordable is 20 years old. Seldane, for instance, was pulled off the market, just as it's successor drug, Allegra entered the market. Now, sure, there were safety issues associated with terfenadine (the drug could interact with othe prescription drugs to cause heart problems), but this decision protected Hoechst Marion Russell from generic competition. Compared with the drugs of twenty years ago, the drugs of today are far safer and more effective. The're also a lot more expensive, mostly due to patent laws.

An interesting link.
I like how Pfizer sidesteps the entire issue of life-saving drugs. The article celebrates the salutory effects of generics but Pfizer of course continues to lobby for the extension and strengthening of patent laws and against generic drugs.
As the NYT article points out, drug companies will use any patent they can to prevent the genericizing of drugs (the example given was that one company got a patent on the coating drug for the pill of an AIDS drug that wasn't protected by patent in Thailand). And generic drugs, which as the Pfizer article effectively admits are the only downward price pressure on drugs, are prevented from entering the US marketplace for at least 20 years, which can mean a lot of lives.