Should Investors Be Angry With Big Pharma?

Some of the most prominent pharmaceutical companies -- including Dow Jones Industrial Average components Johnson & Johnson, Pfizer, and Merck -- heavily invest in marketing. In fact, the sales, marketing, and administrative expenses at many pharma companies exceed the R&D budget. As blockbuster drugs continue to lose patent exclusivity, is this really the best way for big pharma players to spend money? Should investors be upset, or is this a strategy that will build shareholder wealth over the long term?

In the following video, analyst Max Macaluso examines how large marketing budgets affect consumer behavior in the health-care sector and urges shareholders to think about this issue as they make investing decisions.

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Max Macaluso has no positions in the stocks mentioned above. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services recommend Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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