Originally Posted by Hairyhandedgent
i know I wouldn't want to be involved in the pharmaceutical business .... it costs millions upon millions to develop a single drug .... then it has to be tested and approved by the FDA... then you have the lawsuits if even after years of development and testing there are unforseen problems...then the patent you have is only for a limited time after which it can be sold generically by anyone making your patent worthless so you better have new products coming down the tube at all times to fund the research for the products that may or may not ever get to market ..... if a company is honest and doing the right thing it's a very dicey proposition to say the least. I'm not defending the shady practices of some of the drug companies but they face alot of challenges and if you look at some of the big drug compaies' return on investment it's not out of line with other businesses. you hit a homerun with a prozac and have a good year or two and then a drug you spent tens of millions of dollars on fails to get FDA approval and you're in the crapper...
Drugs cost so much because the R&D overhead on drug development is insanely high. Drug companies have to recoup the R&D losses on drugs that don't work with the drugs that do. The ratio is like 20/1.
Its a similar, but not quite as extreme condition in my field of engineering design. I spend lots of time and money on test equipment and programming, so when I sell a customer a product for $400,000 that has $40,000 worth of electronics in it, I'm trying to recoup my costs of development, and account for the ideas that didn't turn out to be as efficient as necessary. Besides, my customer gets a damn good product from me, so its worth it to him.