April 01, 2006
PR View by Beth Herskovits
PhRMA recently launched an advertising campaign to tout the “value of innovation” and to direct audiences to its Innovation.org Web site. Both the site and the messages contained on it
attempt to address what has been a tricky PR proposition —explaining drug costs.
The drug industry has employed many arguments to address pricing issues. Chief among them is that drugs are expensive because R&D costs are expensive. But that line of argument hasn't gotten very far. It hasn't convinced people who see drug companies' healthy profit margins and their flashy marketing campaigns.
And so PhRMA—and some of its member companies—has diverged from that track. The value message is an attempt to communicate how drugs have increased life expectancies and improved quality of life. The problem is that PhRMA uses the term value differently from how consumer industries use it.
In consumer markets, a “good value” is when the benefit, or utility, of the product exceeds the price point. But it's hard to quantify this sort of value for drugs. The value message makes sense when it refers to products like dermal fillers or contraceptives, regardless of whether they're covered by insurance. Patients can readily quantify the pros and cons against the out-of-pocket costs. But when a drug fights cancer or slows macular degeneration, it's much harder for patients to put a price on something as basic as their survival or as intangible as their quality of life.
PhRMA wants patients to marvel at the science and innovation behind new drugs. But patients still believe they have a right to good health and longevity, which is distinct from how they feel about other innovative technologies or gadgets. And until the industry addresses that difference, the value message will fail to resonate.
Beth Herskovits covers healthcare for PRWeek magazine