Second Opinion: Boosted Ad Budgets Undercut Big Pharma’s R&D Rhetoric

New Report Finds Drug Makers Spent Whopping $6.46 Billion On Advertising In 2018

Big Pharma frequently claims high drug prices are necessary to fund research and development (R&D) for new cures.  A new report from Kantar Media underscores what we already know – that Big Pharma’s R&D excuse holds little water and that rising prices are used to pad advertising budgets and line drug makers’ pockets.

The report finds that while pharmaceutical companies continue to hike the prices of life-saving drugs, the industry’s spending on advertising is growing and reached a whopping $6.46 billion in 2018.

The two largest spenders were Big Pharma giants AbbVie and Pfizer.  Let’s take a look at their R&D rhetoric versus reality to see where the dollars garnered from price-gouging their drugs really end up:

AbbVie’s Rhetoric vs. Reality

R&D Rhetoric: Abbvie CEO Richard Gonzalez has claimed that their “system is built around a variety of pricing, around the world, but that overall [our] system supports our R&D model.”

Price-Gouging Practices: While hiding behind R&D rhetoric, AbbVie doubled the list price of Humira from 2012 to 2018 – raising the price of America’s best-selling drug from $19,000 to a whopping $38,000.  Sales of Humira reached a record breaking $20 billion in 2018.

Ad-Budget Bonanza: The new report found that AbbVie increased advertising spending on its top-selling drug Humira by 13 percent last year – bringing total ad spending on the drug to a staggering $487 million.

Profit-Padding Payoff: The price-gouging cash cow also helped AbbVie pocket a massive $25.04 billion in gross profits in 2018 –  a nearly $4 billion increase from 2017.


Pfizer’s Rhetoric vs. Reality

R&D Rhetoric: Pfizer CEO Albert Bourla has made similar claims about needing more money for R&D.  In fact, their former CEO Ian Read even said, “the industry needs a return that allows it to continue to do its research.”

Price-Gouging Practices: Using R&D rhetoric as cover, Pfizer has continued to hike the list prices of drugs at rapid rates.  Since 2012, Pfizer has increased the price of its blockbuster pain management drug Lyrica by 163 percent.  And just this past January, Pfizer increased the list prices of Xeljanz and Chantix by 9.4 and five percent respectively.

Ad-Budget Bonanza: Kantor Media found that Pfizer’s top advertising spending for three drugs – Lyrica, Xeljanz and Chantix – has reached an eye-popping nearly $750 million dollars.

Profit-Padding Payoff: Hiking the price of its brand name prescription drugs helped lift Pfizer to a massive $42.4 billion in gross profits in 2018 – up from $41.3 billion in 2017.


When one in four American patients can’t afford their prescription medications, the price-gouging of life-savings drugs to boost ad budgets and profits is unacceptable.  It’s time for policymakers in Washington to hold Big Pharma accountable with market-based solutions to crack down on its anti-competitive tactics and price-gouging.

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