Originally Posted by Money4Nothing
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.
Not quite the same.
The cost of advertising in the Pharmaceuticals industry is far more than that spent on R&D.
At the end of the day, the preceding post states all the terrible pitfalls besetting the industry but in the end their returns are no less than firms in other industries. Based on the volume of sales, these are humongous companies. No sympathy for them.