{"id":5929,"date":"2015-02-12T15:06:00","date_gmt":"2015-02-12T15:06:00","guid":{"rendered":"http:\/\/www.pharma-mkting.com\/pharma-profits-driven-more-by-marketing\/"},"modified":"2019-02-21T01:16:07","modified_gmt":"2019-02-21T01:16:07","slug":"pharma-profits-driven-more-by-marketing","status":"publish","type":"post","link":"http:\/\/ec2-54-175-84-28.compute-1.amazonaws.com\/pharma-mkting.com\/blog\/pharma-profits-driven-more-by-marketing\/","title":{"rendered":"Pharma Profits are Driven More by Marketing Spend Than by R&D Spend"},"content":{"rendered":"
\n<\/a><\/div>\n

Data from Forbes for 2013 document that the profit margins of banks and pharmaceutical companies ranked the highest (see here<\/a>). Both industries have outlying margins (around 20%) and also outlying settlements with governments for violating marketing and other business-related laws (see chart on left).<\/p>\n

In November, 2014, BBC reported that in 2013, US giant Pfizer, the world’s largest drug company by pharmaceutical revenue, made an “eye-watering 42% profit margin.”<\/p>\n

The BBC article also included a table showing the total revenue, R&D spend, Sales and marketing spend, Profit, and Profit margin of the top 10 pharma companies.<\/p>\n

The evidence shows that many drug companies spend far more on marketing drugs – in some cases twice as much – than on developing them. It’s deja vu all over again in the ongoing debate of R&D spending vs. promotional spending. See a critique of the numbers here<\/a>.<\/p>\n

In any case, I was more interested in seeing if there was a positive correlation between pharma profits and marketing and\/or research and development spending. So I prepared the following chart from the data.<\/p>\n

<\/a><\/p>\n

\n<\/a><\/div>\n

\nIn this chart, the companies are arranged with the highest profits ($bn) on top and the lowest on the bottom.<\/p>\n

I’m thinking there is a better correlation between marketing spend and profits than between R&D spend and profits. What do you think?<\/p>\n","protected":false},"excerpt":{"rendered":"

Data from Forbes for 2013 document that the profit margins of banks and pharmaceutical companies ranked the highest (see here). Both industries have outlying margins (around 20%) and also outlying settlements with governments for violating marketing and other business-related laws (see chart on left). In November, 2014, BBC reported that in 2013, US giant Pfizer, […]<\/p>\n","protected":false},"author":2,"featured_media":11787,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[12],"tags":[115,418],"topic":[],"acf":[],"yoast_head":"\nPharma Profits are Driven More by Marketing Spend Than by R&D Spend - Pharma Marketing Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/ec2-54-175-84-28.compute-1.amazonaws.com\/pharma-mkting.com\/blog\/pharma-profits-driven-more-by-marketing\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Pharma Profits are Driven More by Marketing Spend Than by R&D Spend - Pharma Marketing Network\" \/>\n<meta property=\"og:description\" content=\"Data from Forbes for 2013 document that the profit margins of banks and pharmaceutical companies ranked the highest (see here). 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