I have been in small molecule pharma and bio-pharma for 37 years, both in generic and proprietary product development.
It costs us 100’s of millions of dollars for product development before going into clinical trials. Those trials also cost millions.
Just bringing a product to first in human testing is incredibly difficult and takes years of $$$.
After clinical approvals, then there is the process development for the actual large scale manufacturing, new equipment, qualifications of the mixing, filling and stability programs...etc.
It costs big $$$ to bring these life saving drugs to market, comply with US and GLOBAL regulatory testing requirements and the maintenance of the product over time.
The real costs of healthcare are caused more by the regulations we have to comply with than the actual cost of the active pharmaceutical ingredients too.
G
Through preclinical and clinical trials into final approval the cost seems to average about 800 million dollars and the timeline to fruition is lengthy. The vast majority of drugs never make it to market (about one in five compounds that make it to Phase 1) and the financial drain on a company to develop it's pipeline is enormous. So the question is, if we start price mandating in the US like Canada does, who is going to capitalize the engine that produces new drugs?
The reality is that the US market is the single largest profit source for global pharma and a great deal of funding for bio-techs is private sector investment. Investing in these companies is a high risk undertaking and if the products that are born out will never produce significant revenue why the heck would I throw money at it?