1. It is justifiable for pharmaceutical companies to drastically increase drug prices due to research and development costs..

• A significant amount of Research and Development work goes on outside the United States in countries without captive consumer bases. (July 6, 2005 - The Washington Times)
• But large profit margins and marketing budgets indicate that drug companies could reduce prices without cutting into research and development money. (June 9, 2005 - Mediamatters.org)
• Pharmaceutical companies devote nearly as much money to marketing as to research and development. (June 9, 2005 - Mediamatters.org)
• While drug companies spent $33.2 billion on research and development in 2003, they spent three-fourths of that amount -- $25.3 billion -- on advertising (June 9, 2005 - Mediamatters.org)
• The pharmaceutical industry's claim that outrageous profits are necessary to cover the high costs of R&D does not hold up for a number of reasons; the industry giants spend much more money on marketing and advertising than on R&D, a large part of research is publicly funded, by way of creative accounting, R&D costs are made to appear higher than they actually are; and it is the artificially high drug prices and strict patent laws that protect the industry's profits. (Independent Media TV - January 31, 2005)
• According to the Center for Responsive Politics, the drug industry paid out more than $26 million in 1999-2000 to U.S. congressional candidates. Money-hungry politicians both Republican and Democrat alike will never be willing to take on the pharmaceutical industry. (American Daily - December 16, 2004)
• AstraZeneca spent nearly $260 million on television and other mass–media advertising aimed at Nexium users last year. (New York Times – October 12, 2004)
• Drug companies are now so obsessed with profits that they are no longer willing to pay for the innovative research that they claim justifies the high cost of their products. The numbers do not support the contention that without high prices there would be no money for the next generation of miracle drugs. (American Scientist Online - December 22, 2004)
• Pharmaceutical and biotech companies have spent in excess of $1 million lobbying against numerous bills in the Legislature that would favorably affect the way Californians get their prescriptions filled. (L.A. Times – August 4, 2004)
• In 2000, America’s top 10 pharmaceutical companies spent only 14% of sales on Research & Development compared to 36% on marketing, advertising and administration. (The Charleston Gazette – July 15, 2004)
• Last year Abbott Laboratories more than quadrupled the price of the drug that is used in some quantity by most AIDS patients. (Courier Post Online – August 8, 2004)
• Drug makers raised prescription prices by nearly triple the rate of inflation in the first three months of this year – just before Medicare began its pharmacy discount card program – negating much of the savings promised to seniors, according to an AARP survey. (Santa Maria Times – July 6, 2004)
• Pfizer Inc., Bristol-Myers Squibb Co. and other drug makers raised prices in the first quarter almost seven times as fast as producers of all U.S. goods,according to the consumer group AARP and government statistics. (Chicago Tribune – July 1, 2004)
• According to an article in the March 2004 issue of Advertising Age, four of the top 25 American advertisers, in terms of spending, were drug companies. The fourth largest spender on the overall list and the top pharmaceutical advertiser was Pfizer, which paid a total of $2.57 billion for advertising in 2002. Pfizer manufactures Lipitor (atorvastatin), a popular cholesterol-reducing drug and the highest-selling drug in the world. Johnson & Johnson, at number eight, spent $1.8 billion on advertising. GlaxoSmithKline, number 12, spent $1.55 billion. Merck at number 19, spent $1.16 billion. The total dollars spent on advertising each of these drugs does not include “seminars”, free trips for doctors, free samples, questionable consulting positions for physicians, free gifts, and free trips, all of which are known marketing techniques used by drug companies for an extra edge. (Nutrition Health Review – August 5, 2004)
• Drug manufacturers spent $3 billion a year on direct-to-consumer advertising – much of that advertising on newer, more expensive drugs that have little increased value over previous drugs. That cost is passed on to consumers.
• Drug companies defend their high prices as necessary to support the millions they spend on developing new drugs. Yet their bottom line profit margins are among the highest of any industry. Adding to their costs and ours are the millions they spend to advertise prescription drugs to the general public. Since these drugs require prescriptions from physicians who presumably review the appropriateness of their use in the context of the medical history and current condition to their patients, why do these drugs need to be advertised to the general public? (Buffalo News – July 12, 2004)
• About 36 percent of all U.S. medical research is federally funded by tax payers, not the drug companies. (Savvy Senior – August 7, 2004)
• In 2001, the pharmaceutical industry spent more than $2.5 billion on TV, radio and print ads, and spent an additional $9.4 billion on its pharmaceutical sales representatives who give out some $10.5 billion worth of free samples and perks to doctors, all of which contributes to increased drug prices. (Savvy Senior – August 7, 2004)
• Drug manufacturers claim huge revenues are needed to fund the research and development of new medicines. What the industry fails to mention is that the federal government’s National Institutes of Health (NIH) funds most core research and clinical trials for drugs. NIH and other federal agencies sponsor 55% of current clinical trials, while the drug industry sponsors just 13%. (Alliance for Retired Americans)
• Pharmaceutical companies spent $16 billion for promotional efforts in the first nine months of 2002, up 14% from the previous year. In 2001, 27% of drug company revenues went to marketing and administration, compared with 11% for research and development. (Alliance for Retired Americans)
• Spending on advertising and marketing by pharmaceutical companies more than doubled form 1996-2001 rising far faster than spending on research and development. (U.S. Newswire – August 16, 2004)
• A 2000 report found that pharmaceutical companies had overstated their Research and Development costs by as much as five times the actual costs. Data also shows that up to half of the R&D costs for some of the most expensive drugs are paid for by taxpayer dollars. (U.S. Newswire - August 26, 2004)
• The drug industry boasts the second-best margin in business, after the oil-drilling sector – and that’s after subtracting R&D costs. (September 2, 2004 – Los Angeles Times)
• In 2003, Merck & Co. recorded revenue of $22.5 billion. Of this, it spent $3.2 billion on R & D. A lot less than its “marketing and administrative” costs ($6.4 billion). After other charges and taxes, the company still recorded profit of $6.8 billion, for a margin of 30%. (September 2, 2004 – Los Angeles Times)
• Pharmaceutical and biotech companies have spent in excess of $1 million lobbying against numerous bills in the Legislature that would favorably affect the way Californians get their prescriptions filled. (L.A. Times – August 4, 2004)
• In 2000, America’s top 10 pharmaceutical companies spent only 14% of sales on Research & Development compared to 36% on marketing, advertising and administration. (The Charleston Gazette – July 15, 2004)