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Edwards Blames Soaring Drug Prices On Ad Costs

While introducing components of a broad healthcare plan at a stump speech in Laconia, N.H., on Sunday, Democratic presidential hopeful John Edwards proposed to ban direct-to-consumer advertising of new pharmaceuticals until after the drugs have been on the market for two years.

"You've seen these ads. You know who's paying for them, right? You are," Edwards also reportedly told the gathering. He went on to claim that medicine makers spend "twice as much" on marketing and administration as they do on research. That's not true.

U.S. drug makers shelled out more than $55 billion on medical research in 2006, according to market research firm IMS Health. That compares to just $12 billion companies spent on sales, promotion to doctors and ads targeting patients. Edwards' speech writers lumped "marketing" and "administrative" costs together. In most Fortune 500 financial reports, "administrative costs" are often catchall categories for anything that isn't related to the direct costs of manufacturing or sales.



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