[jyl]

Pharmaceuticals is an HUGE industry.

As the companies grow, to maintain their growth rate and keep their stock price up, they have to increase their sales by ever-larger amount. For example, PFE is a $51BN company, to grow 5% they'd have to add $2.5BN sales in 2006, compare to 5 years ago when it was only a $29BN company.

Some huge blockbuster drugs are coming off patent now and in the coming years. Each big pharma company will see tens of $BNs of sales disappear as these giant cash cow drugs go generic. Since patented drugs carry 90% gross margins, the loss of profits is also huge.

Big pharma has not been as effective in discovering and commercializing new blockbuster drugs, as in decades past. This is partly because the most promising new drugs are being developed by the biotechnology industry, which for various reasons is separate from the pharma industry.

So the big pharma companies are under intense pressure to generate more sales from their existing drugs.

The traditional route of hiring more pharma sales reps to sell to prescribing doctors is becoming less effective. Doctors are busy and have only so many minutes in the day to see sales reps.

So the big pharma companies have increasing resorted to direct-to-consumer (DTC) advertising. The idea is to get you and I interested in a drug so that we ask our doctors to prescribe it. Part of this is by convincing us that a symptom is a disease to be treated, rather than just a part of life to be tolerated.

The practice has generated some backlash, and some big pharma companies have said they'll curtail DTC advertising. But they don't really mean it.

This is all about large companies striving to protect and grow their profits. Going back to PFE, its net income was $8BN last year. To protect that, will buy a lot of cable TV time.