The majority of money spent in R&D is public money. When they say "It cost $10 million to develop" it doesn't mean that's what they paid out of pocket. Most of it is research done at universities through grants.
My wife was treated for MS using a cancer drug developed in the 50s. If you have cancer, the drug costs about $20. If you have MS, the drug costs $450,000+ (that was my bill). The only difference is FDA approval.
> The majority of money spent in R&D is public money. When they say "It cost $10 million to develop" it doesn't mean that's what they paid out of pocket. Most of it is research done at universities through grants.
Do you have some citations for that?
Public grant money may pay for some early-stage basic research, but clinical trials (especially the later ones) are almost always run and paid for by pharma companies, aren't they? And those are the really expensive part.
> My wife was treated for MS using a cancer drug developed in the 50s. If you have cancer, the drug costs about $20. If you have MS, the drug costs $450,000+ (that was my bill). The only difference is FDA approval.
No, the difference is that someone actually went and spent years researching MS, figuring out that this cancer drug could potentially treat it, ran multiple phases of clinical trials to show that it was effective and THEN got FDA approval. Why would any company go through all this trouble if you could just buy the generic cancer drug from a competitor at the end?
> The majority of money spent in R&D is public money.
No, most of the money spent on R&D in the entire world is funded though pharmaceutical sales in the US. The amount that comes from truly exogenous sources is vanishingly small.
> My wife was treated for MS using a cancer drug developed in the 50s. If you have cancer, the drug costs about $20. If you have MS, the drug costs $450,000+ (that was my bill). The only difference is FDA approval.
You're proving the point. It's more expensive because they have to go through the research and approval process all over again for the new usage of the drug. The marginal cost of producing the medicine isn't the issue.
> This is not true, and I've already told you this.
And as I've already told you, those statistics aren't remotely relevant to this discussion. That tells you the amount of money that's spent on research inside each region, not where the money actually comes from.
You've used that statistic in the past to "prove" that European drug sales could cover the R&D expenditures in the US, because $190B > $47B, but that's not a mathematically valid analysis. The profit margins in the industry are nowhere near large enough to absorb a $400B hit, which is what it would be if the US drug market had the same price levels as Europe.
Based on previous discussions, I can predict where you're trying to to lead this next, which is to claim that they could absorb that massive loss, because they could just take it away from excessive compensation and marketing expenses. Except, the numbers don't add up there either. SG&A is the largest expense in pretty much every industry, and pharmaceuticals are naturally reliant on personnel. Executive compensation is a drop in the bucket.
And, as you've already been told by others, pharmaceutical companies spend much less on marketing or SG&A expenses than most comparable tech companies do. Even if you assumed that marketing has zero impact on revenue (hint: it doesn't), or that pharmaceutical companies have a lower return on investment for marketing expenses than Google does (hint: they don't), cutting all marketing expenses would still not account for the difference, and that's before the massive drop in sales that would result.
Of course, once again, this set of statistics all entirely irrelevant to the original point at hand: regardless of where the R&D physically takes place, and regardless of the headquarters of the company that's conducting the R&D, the underlying flow of funds is disproportionately and predominantly reliant on the US market.
The majority of money spent in R&D is public money. When they say "It cost $10 million to develop" it doesn't mean that's what they paid out of pocket. Most of it is research done at universities through grants.
My wife was treated for MS using a cancer drug developed in the 50s. If you have cancer, the drug costs about $20. If you have MS, the drug costs $450,000+ (that was my bill). The only difference is FDA approval.