Is Marketing the Enemy of Pharmaceutical Innovation?
Applbaum, Kalman, The Hastings Center Report
Clinical trials are the most credible and powerful form of marketing in the prelaunch period.
--Francoise Simon and Philip Kotler (1)
Two alarming trends have surfaced in the pharmaceutical industry these past two decades. The first is a surge in ethics violations. Despite journalists, researchers, bloggers, and lately lawmakers who have been working to shame the industry into self-reform, the pace at which new scandals are born appears, if anything, to be accelerating. (2) There is wrongdoing in every stage of drug development and promotion. The list includes campaigns to "ghost manage" the conduct of basic science, to rig clinical trials, to run trials in poor countries where ethical oversight is weak, to market medical conditions far beyond their natural incidence ("condition branding," as the marketers term it), to sway public health criteria for the threshold of disease risk, and to lure some of the nation's most respected doctors into risky off-label pro motion schemes. (3) All of these problems can be traced back to marketing-inspired ruses.
The second, less apparent trend is a decline in new drug applications marking breakthrough discoveries. In the words of a 2006 Government Accountability Office report to Congress, "Innovation in the pharmaceutical industry has become stagnant." (4) Merrill Goozner, head of the Center for Science in the Public Interest, explains, "Three out of every four drug applications involve drugs that either replicated the action of medicines already on the market or were new formulations that at best added minor conveniences for patients and doctors." (5)
Some have had the intuition that these two trends are connected, but the dots have not been empirically or even notionally linked in a way that would light a path to reform. The two appear to be effects of a different order. I will argue that they are joined because they reflect the ascendancy of marketing throughout the pharmaceutical industry and in particular because they result from the integration of pharmaceutical firms' marketing efforts with their formerly semiautonomous research and development (R&D) divisions.
My goal in this essay is to connect some of the dots--to show that the decline of innovation is also linked to the rise of marketing. Discovery of medical cures relies on honestly pursued scientific outcomes and a clear separation of influence over scientific practices and goals. I specify the rise in the early 1990s of blockbuster drugs--the handful of brands that account for nearly half the industry's profit--as the catalyst for yoking R&D to marketing, a development that would have been unfamiliar and unnatural to most pharmaceutical executives of prior generations. I draw on industry sources to depict managerial principles at work in defining the relationship, the most telling of which is referred to as "precommercial planning and marketing."
Precommercial planning and marketing demonstrates how the marketing-driven outlook in pharmaceutical companies today pushes these enterprises toward an escalation in the adoption of marketing rationales at the expense of public health. What emerges is a system in which the scientific search for cures and the marketing-led pursuit of meeting unmet medical needs stand not in cooperative tandem, one with the other, but in direct competition. Precommercial planning and marketing, in short, is a legal but unethical practice when applied to humanly vital industries such as the pursuit of medical cures.
Marketing and R&D
What is precommercial planning and marketing? A recent podcast at Pharmavoice, "a Website for life-sciences executives and other healthcare-service related professionals," was entitled "Pharmaceutical Marketing and Planning: Securing Future Success through Meaningful Differentiation." The guest speaker was Laurie Lucas, founder of L3 Healthcare Marketing, LLC, which explains its objective this way: "The pharmaceutical market is evolving rapidly, growing in complexity, and there is less time to maximize a product's potential. …