That is to say that's it's not that expensive to R&D it, certainly compared to the eventual sale price, but it's carrying the cost of the hundred potential drugs that never made it to market that's the killer.
And the approval rate is less than 12%.
The crazy pricing is to compensate for the failed projects.
Also, it's not like you can bootstrap yourself or grow organically like Startups.
You have to wait for like 10 - 15 years. To actually start selling it.
[1]: https://www.google.com/amp/s/www.policymed.com/amp/2014/12/a...
So if they have a effectively built monopoly, chopping down the maximum they can charge via regulation would seem sensible wouldn’t it?
There's several factors that impact US drug prices. For instance FDA approvals are significantly more costly than EMA ones and the bargaining power of healthcare providers is worse compared to a single payer system
I have no knowledge of US laws, but I wouldn't be surprised if there's some kind of law preventing government interference with "the free market"
(It’s almost the opposite, in fact, where our courts have expanded the Commerce Clause over time to allow the federal government the ability to regulate close to any economic activity.)
Factor in the failed programs and you’re looking at about $2B of spend in order to bring a drug to market.
Several drug developments are halted before they reach market. Novo for instance lost a lot of money on their bet to develop inhalable insulin 15 years ago
That cost also has to be recouped when finally hitting the jackpot
So the whole "American big pharma needs to make a billion dollars a week in profit to recoup their R&D" is nothing but marketing fluff.
I haven’t seen anyone say American pharma companies in particular need to make a ton of money.
The American-specific topic is that American consumers pay a ton more for drugs. That can be chalked up to lack of single-payer making American consumers incredibly easy to bully/negotiate against + all the rent-seekers who sit at various points along the care delivery system.
I would think any company - regardless of where it’s headquartered - would seek to recoup R&D costs in a huge market like the US where prices aren’t capped by the government.