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Pharmaceutical Marketing Crossroads - Wising-Up to the US System

Prescription drug spending in both the US and UK has dramatically increased over the past five years, reflecting an increasingly ageing population. Praeto's law prevails here as in many areas of marketing, with approximately 20 per cent of the drugs accounting for 80 per cent of the gross spending. The reasons are twofold. First, the ageing population across the US and Western Europe demands higher levels of care and spending on a variety of ailments, many associated with age. These include high cholesterol, cancer, angina, diabetes, arthritis, pain control and hypertension.

The second reason for the increases in spend is somewhat harder to fathom, but rests on the issue that more prescriptions are being written for newer, more costly drugs. One argument claims that as the costs of developing and marketing a new blockbuster drug increase, so the number of drugs destined for market decrease and the pressure to squeeze more revenue from existing products becomes more intense. In light of this, it is interesting to note that in today's increasingly competitive world of drug sales, most pharmaceutical companies reinvest between 20 and 40 per cent of turnover in sales and marketing activities. The magnitude of this spend can be gauged when one contemplates the fact that the biggest pharma companies return revenues larger than the GDP of some countries.

Over the past 10 years, the sales of pharmaceuticals in the US have overtaken Europe, despite the similar sizes in population. The reasons are of course many and varied; the US is a single coherent market whilst Europe is a collection of cultures, languages, regulations and boundaries, which makes for greater hurdles and costs in every aspect of drug manufacture and marketing.


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By Stephen Foster, VP European Marketing at Dendrite UK

Stephen Foster is the General Manager of Dendrite's UK Operations and Vice President of Sales, Europe. Stephen joined Dendrite from his position as Vice President of European Sales for Synavant, which Dendrite acquired in June 2003. Prior to joining Synavant, he was European Vice President for Clickmarks Inc. Stephen holds a BSc from Birmingham University and is a member of the Institute for the Management of Information Systems.
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Stephen Foster
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