I’m not trying to defend pharma companies… they’re generally pretty scummy. But I’m guessing most companies spend more on marketing than R&D. Beyond that, the theory that they need to recoup costs still holds true with this. In fact, a big marketing budget indicates that they’re aggressively trying to sell the drug (maybe to recoup costs?).
Generally in business marketing budgets should generate more sales than they cost (in ideal case), so big budgets doesn’t mean that they’re “wasting” that money that could go elsewhere. If the sale wouldn’t happen without an ad, then that’s a necessary ad.
> If the sale wouldn’t happen without an ad, then that’s a necessary ad
I think that's the core issue here, healthcare and pharmaceuticals have basically inelastic demand. The US is one of only two countries where it's even legal for pharma companies to advertise directly to consumers.
I know in practice they can create demand for products, but that doesn't necessarily seem like a good thing, so I think you could argue that it's still a waste of money even if it does create profit for the company.
https://www.ahip.org/news/articles/new-study-in-the-midst-of...