Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

The Google Health Problem...And The Quest For Pharma Gold

Posted by Tom Foremski - May 13, 2008

Google has asked all hacks to assemble at the Googleplex Monday 19th to hear about the state of search and also Google Health. That sounds like hearing about the health of Google and also its new service Google Health.

Health is a tricky area for Google. I remember chatting about this subject with Wayne Rosing in 2005, at the time he was head of all Google engineering.

We talked about the problem that Google has to do things by machine. That's the secret to understanding Google. Google uses machines and software to produce its results. This is what protects it from any liability that it directly or deliberately produced anything that was a decision by an employee, or an agent of the company, which could trigger a lawsuit or violate a law.

That's what Wayne Rosing spoke about: how do we provide medical information that can make a difference to people and save lives while at the same time avoid the information that is BS and avoid the legal liability of directly advocating a particular medical course of action? Mr Rosing was speaking from personal experience.

Judging by Google's invite it has figured out this problem. It's taken more than 3 years to do it and I'm going to be very interested in seeing how it solved this problem.

And since it has, Google can reap a lot of pharma gold. Just look at the huge amount of money that pharma pumps into TV advertising. I've no idea what "the purple pill" is but plenty of people respond to those ads and they generate a lot of revenue for the pharma companies.

Imagine those advertising dollars used in Google Health, targeted much more precisely at those people that do know what the purple pill is...Pharma advertising via GOOG can potentially result in more sales at a sharply lower cost of marketing. That's a very compelling message.

Take a look at this from Science Daily January 2008:

A new study by two York University researchers estimates the U.S. pharmaceutical industry spends almost twice as much on promotion as it does on research and development, contrary to the industry’s claim.

. . . the U.S. pharmaceutical industry spent 24.4% of the sales dollar on promotion, versus 13.4% for research and development, as a percentage of US domestic sales of US$235.4 billion.

Big Pharma Spends More On Advertising Than Research And Development, Study Finds

My quick calculation shows $57 billion for promotion... GOOG's revs in most recent quarter were $5.19 billion. Clearly there is lots of pharma gold for the picking. Even just the low fruit would substantially boost GOOG's overall business.

But it'll be interesting to see how Google manages to avoid some of the legal issues and just how useful the GOOG virtual MD proves to be.

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Please see: Healthline: The search for pharma online gold - drug makers seeking drug takers.

Google Health Login Page

Official Google Blog: A pilot with the Cleveland Clinic for health information access

Official Google Blog: Google Health, a first look

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