Big Pharma's Marketing Tactics Essay example
Understanding Big Pharma:
The US Pharmaceutical industry is the 2nd most profitable industry in the country. The nature of the industry follows an oligopoly form; with the big players yield much influence, hence lending to its name, “Big Pharma”. By 2010, Big Pharma has a staggering 526 lobbyists and gives an estimated $19 billion worth of gifts to physicians annually.
Understanding Business ethics:
The definition of ethics is given by as follows, “Ethics are moral principles that govern a person’s behavior or the conducting of an activity.” (Lawrence & Webber, 2008) Basically, they are the issues of identifying right and wrong in our daily life, serving as a moral compass. …show more content…
Ethical issue #1: Direct to consumer (DTC) marketing: “Salesmanship v Science?”
As with any business organization, the primary objective of Big Pharma is to maximize profits based on their product offerings. However, here lies an ethical question, “To what extent should Big Pharma achieve their business objectives at the expense of its consumers?” The answers to this question are definitely debatable, however an answer is certain, that various business models in different industries would have opposing measurement scales in this regard.
In the case of pharmaceutical industry, it is very costly to produce an approved drug for sale. Firstly, much of R&D expenditure dollars will be wasted in the early stages of research, as it is not easy to find the cure for medical ailments immediately. Secondly, the formulated drug has to go through clinical trials before the regulatory agencies (i.e.: FDA) decide to approve it, which can be a lengthy process. Hence, the only way for companies to recoup their expenditure is through an aggressive brand of marketing of the approved drugs, with Big Pharma leading the way.
Then, what are acceptable marketing practices by Big Pharma that