DOI: 10.52340/ekonomisti.2025.04.05

Expanded Summary 

Pharmaceutical marketing is a complex and influential component of the global healthcare system. It plays a crucial role in shaping prescribing practices, drug utilization patterns, and public perceptions of medicines. However, its influence raises significant ethical, regulatory, and policy challenges. While promotion aims to disseminate information about pharmaceutical products, its primary purpose is commercial — to expand market share and increase profits. This commercial motive can conflict with public health goals, leading to over-prescription, inappropriate use of medicines, and increased healthcare costs.

One of the most significant issues is the impact of promotion on prescribers. Research shows that pharmaceutical marketing often emphasizes new products regardless of their therapeutic advantage over existing treatments. A French review of 1,038 new drugs and indications (2006–2015) found that only 1.3% were major therapeutic advances, while over half offered no significant innovation. Despite this, aggressive promotion drives their widespread adoption. Physicians frequently underestimate their susceptibility to promotional influence; surveys indicate that while most believe they remain unaffected, they assume their colleagues are influenced. Studies have linked higher exposure to promotional activities with increased prescription volume, greater use of expensive medicines, and lower adherence to evidence-based guidelines.

Pharmaceutical companies employ various promotional strategies. Sales representatives remain a traditional channel, but their numbers have declined significantly in recent decades, particularly in the United States. A more sophisticated and effective strategy involves the use of key opinion leaders (KOLs) — influential clinicians who lend credibility to marketing messages. These experts are often paid to lecture, consult, or participate in clinical trials, shaping prescribing behavior while maintaining an appearance of independence. Evidence shows that doctors attending KOL presentations prescribe significantly more of the promoted drug than those who do not. Companies invest heavily in KOL activities, often spending a third of their marketing budgets on them due to their high return on investment.

The ethical concerns surrounding pharmaceutical promotion are well-documented. Practices such as “disease mongering” — exaggerating or medicalizing normal conditions — and the use of gifts, even small tokens, can create a sense of obligation that subtly influences prescribing. These dynamics highlight the need for robust regulatory frameworks to ensure that promotional practices align with public health interests and ethical standards.

Globally, regulatory approaches vary widely. The World Health Organization’s Ethical Criteria for Medicinal Drug Promotion (1988) remain the foundational standard, emphasizing accuracy, evidence-based claims, and avoidance of misleading information. Yet, many modern promotional practices — including the use of KOLs and industry-sponsored continuing medical education — fall short of these criteria. Some countries adopt direct government regulation, overseeing approval, monitoring, and enforcement. Others rely on self-regulation by industry bodies or adopt co-regulatory models. However, enforcement is often under-resourced, and monitoring mechanisms are weak. For example, Canada did not impose any fines for promotional violations over 25 years, while Brazil fined companies $10 million for 959 violations between 2004 and 2007. In the United States, fines totalled $35.7 billion from 1991 to 2016, yet illicit promotional profits often exceed penalties.

Several legislative initiatives aim to increase transparency and accountability. The U.S. Physician Payments Sunshine Act (2010) requires disclosure of all payments over $10 to physicians, revealing associations between financial ties and increased brand-name prescribing. France introduced stricter regulations following the Mediator scandal, where a drug used off-label for weight loss caused severe cardiac side effects. Portugal and several other EU countries now mandate disclosure of financial relationships between healthcare professionals and the pharmaceutical industry.

Industry self-regulation also plays a role. Codes of ethics by organizations like PhRMA (U.S.), Medicines Australia, EFPIA (EU), and IFPMA (global) set standards for promotional conduct. Some codes prohibit gifts and require transparency in funding relationships, though they are often voluntary and lack enforcement mechanisms. Moreover, self-regulatory systems frequently fail to address critical promotional activities such as sales representative conduct or direct-to-consumer advertising.

In Georgia, the legal framework for pharmaceutical marketing is based on the Law on Pharmaceutical Activities (1997), the Law on Advertising (1998), and government decrees regulating information dissemination. Advertising of prescription drugs to the public is prohibited, and promotional activities must avoid misleading claims. However, enforcement remains inconsistent. Unregistered advertisements, unethical promotional practices, and unofficial marketing channels persist. Transparency is particularly weak: unlike the U.S. or EU, Georgia lacks mechanisms requiring disclosure of financial relationships between companies and healthcare professionals. High market concentration and vertical integration among pharmaceutical companies exacerbate these problems, limiting competition and influencing prescribing behavior. A 2023 investigation revealed cartel agreements in oncology drug pricing, resulting in price increases of up to 3000%.

Georgia’s legislation partially aligns with EU directives, but significant gaps remain, particularly in transparency, enforcement capacity, and conflict-of-interest monitoring. Strengthening regulatory institutions, adopting mandatory disclosure standards (similar to EFPIA or the Sunshine Act), and involving civil society in oversight are essential steps toward aligning national policies with European standards.

In conclusion, pharmaceutical marketing exerts a profound influence on healthcare systems, prescribing practices, and patient outcomes. Effective regulation must balance commercial interests with public health priorities, ensuring promotional activities are transparent, evidence-based, and aligned with ethical standards. While progress has been made through legislative reforms, self-regulatory codes, and transparency initiatives, significant challenges remain — particularly in countries like Georgia, where enforcement is weak and transparency is limited. Addressing these gaps is essential to protect public health, ensure rational use of medicines, and maintain trust in healthcare systems.

Keywords: pharmaceutical marketing, drug advertising, regulation, ethics, patient behavior, EU law, rational use of medicines.