Andrew Sullivan Washington, D.C. Continued on page

Some critics also contend that advertising makes drugs more expensive. But such concerns reveal a lack of understanding about the effect of advertising. In a competitive market, advertising can – and should – lower costs by expanding consumer awareness and increasing sales, lowering the fixed costs per consumer.

The drug industry is very competitive; no drug company has more than 5 to 6 percent of the worldwide pharmaceutical market. The fact is that in a competitive market, drug companies cannot just add the cost of advertising to the price of their products because they could lose market share.

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Some critics also contend that advertising makes drugs more expensive. But such concerns reveal a lack of understanding about the effect of advertising. In a competitive market, advertising can – and should – lower costs by expanding consumer awareness and increasing sales, lowering the fixed costs per consumer.

The drug industry is very competitive; no drug company has more than 5 to 6 percent of the worldwide pharmaceutical market. The fact is that in a competitive market, drug companies cannot just add the cost of advertising to the price of their products because they could lose market share.