Marketing and Pharmaceutical Development

New pharmaceuticals are developed in response to therapeutic need, scientific feasibility, and market demand. As research and development (R&D) decision processes becomes more sophisticated, marketing input plays a greater role in these decisions. Industry-financed R&D is dependent on basic research financed by government. The political decisions which determine government-financed research are significant determinants of the scientific feasibility of a new drug. Many new drugs offer only minor advantages over existing therapies. The cumulative effect of these minor improvements are significant. In addition, new drugs often increase competition in a market. The Orphan Drug Act has contributed to the marketing of drugs where sufficient market demand may not otherwise exist. While some portion of R&D funds are spent on imitative drugs, the incentive for this use of R&D funds decreases as buyers become more sophisticated and as the cost of marketing a new drug increases.