Big Pharma's Marketing Tactics

Topics: Ethics, Pharmaceutical industry, Business ethics Pages: 9 (2596 words) Published: January 20, 2013
Case analysis of Big Pharma’s Marketing Tactics

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. Then what are business ethics? Business ethics is the application of general ethical ideas towards business behavior (Lawrence & Webber, 2008). Due to the diversity in the modern world, different organizations and industries have different perspectives towards business ethics. Hence, with respect to business ethics, this report will review the application and implication in Big Pharma’s marketing tactics.

Understanding the stakeholders of Pharmaceutical industry:

1. Consumers.
They will be directly affected by the marketing practices by Big Pharma, as the immediate users of its products. Usually, consumers have a strong voice in determining the companies’ profits. However, it is different in the pharmaceutical landscape, due to their expertise in its product knowledge. As such, consumers are often at the losing end.

2. Community
With the pharmaceutical being a burgeoning industry in the society, concerns from public will naturally grow. Based on a recent poll, public perceptions towards Big Pharma are largely negative, indicating their low level of trustworthiness. Consumers, which form part of the community, can also be represented through interest groups or watchdogs.

3. Industry representatives
In the case of Big Pharma, it is common to find lobbyists working on their behalf to safeguard their business interests, specifically towards the government. By gathering a huge lobbying force, Big Pharma has consolidated their influence within and beyond the industry. A testament of their effectiveness would be their repeated ability to defeat attempts to restrict drug marketing.

4. Government & Regulators
The pharmaceutical industry is one that can potentially affect the lives of general public, thus the government has taken a heightened interest in it. Therefore, they have tried to balance the interest of the society by having an agency, Food and Drug Administration (FDA), which regulates the legality of drugs produced. On a legislative level, the government also attempts to tighten the business conducts by Big Pharma by passing bills and laws.

5. Media
The range of media tools in today’s world can serve as a double-edged sword for Big Pharma. At one end, the controversial marketing practices by Big Pharma provides fodder for magazines and newspaper for reporting purposes, contributing to a negative public image. On the other end, Big Pharma has regularly tapped into media to advertise their products such as the TV advertisements by Novartis to market Lamisil, an overrated drug.

6. Intermediaries
This consists of medical students and physicians, which is seen as the “middleman” in the pharmaceutical industry. Hence, they form a crucial link between Big Pharma and its consumers. It is no surprise that Big Pharma would spend a great deal of time and money on them. In other words, getting a tight grip on them would mean business to Big Pharma indirectly.

7. Stockholders & Investors
The primary concern of stockholders is the profitability of their respective companies. At times, they are also concerned with its’ reputation. Since the marketing practices by Big Pharma have been a contentious issue, this is an aspect that...

References: 1. Lawrence & Webber (2008), Business & Society (12th edition), McGraw Hill International Edition,
Page 27 (Stakeholders), 90 (Ethics & Business Ethics), 107 (Whistle-blowing), 117-119 (Marketing Ethics), 130-131 (Ethics & Laws)
2. SAPI code of marketing practices,, accessed from Feb 6 2012.
3. “Drugs: Why drugs costs so much?” MedicineNet,, accessed from Feb 6 2012.
4. “Big Pharma Spends More on Advertising Than Research and Development, Study Finds.” Science Daily (January 2008),, accessed from Feb 6 2012.
5. “Pharmaceutical Fraud: How Big Pharma’s Marketing and Profits Come before Consumer Safety and Wellness.” Naturalnews., accessed from Feb 7 2012.
6. “Pfizer Broke the Law by Promoting Dugs for Unapproved Uses,” Bloomberg (November 2009),, accessed from Feb 7 2012
7. Pharmaceutical industry,, accessed from Feb 8 2012.
8. Pharmaceutical marketing,, accessed from Feb 8 2012.
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