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Falling Profits for Drug Companies

With news media reporting abundant bad news about big drug companies, it’s not surprising to learn that profits are falling.

The FDA is moving more slowly than in recent years and blocking drugs that would likely have been accepted under previous practices. Doctors are prescribing fewer of the drugs that have come under scrutiny, like antidepressants. Insurance companies and some state governments have taken this as an opportunity to encourage patients to use older, generic meds.

Perhaps most damaging is that patients aren’t clamoring for the latest medications. One stock analyst chalks the public’s misgivings up to a lack of trust. Advertising has been key for generating demand for new drugs. But advertising isn’t too effective when the target market doesn’t believe the messages that companies are trying to sell.

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