How pharmaceutical companies increase revenue.

There are two ways pharmaceutical companies can increase revenue:

  1. Invent new drugs
  2. Invent new diseases

The big news in the doctor world in the past few weeks has been the recently released new guidelines for statin medications (Lipitor is an example). Under the new guidelines, millions of more people now meet the criteria to be a statin candidate. Lo and behold, the pharmaceutical companies have expanded the definition of disease to now label more and more people as diseased. Only time will tell if this saves lives vs. increases diabetes and other side effects. Large recommendations like this sometimes backfire (remember hormone replacement therapy?). 

This is also significant from another perspective. This is essentially the first large scale use of an online calculator leveraging “big data” to determine candidacy for a drug. So that’s exciting, especially since only about 10% of what doctors do have any sort of evidence backing those therapies. The other 90% are a combination of speculation, tradition, and hearsay.