Table: Where the R&D Dollars Go
1. A LONG ROAD
The path from spotting an interesting gene target to getting a drug on the market can take a dozen years. So half of the average estimated $300 million to $500 million R&D "cost" per drug is simply opportunities lost to invest the money elsewhere.
Companies must test thousands of compounds on cells to spot a few with the desired effects--and many of those will be toxic. Speeding this process, however, could dramatically reduce R&D costs by cutting development time.
Only about one in 10 drugs promising enough to test in humans is safe and effective enough to make it to market. Since the failures eat up roughly half of direct R&D expenditures, cutting the failure rate would also slash overall costs.
Many drugs cost just a few cents per pill to make. So in theory, drugmakers should be able to boost production and sell on the cheap to developing nations without threatening future research--and still make marginal profits.