this post was submitted on 07 Sep 2025
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Isn't the production of medicine a miniscule part of its cost? My understanding is that ads and profit are the two biggest costs
What you say is partly correct.
Most of the cost of a medicine is research, so when new patented medicines come to market, they are usually very expensive because they have to generate profits.
Then, when the patents expire, generic drugs become available, which are very cheap because they are cheap to produce.
"when patents expire", lol
https://time.com/6336840/patent-manipulation-insulin-prices/
Research isn't the really the expensive part. Or rather most of research is paid by governments. The expensive part is clinical trials. They are paid by the companies that later sell the drugs. Vast majority of clinical trials fails at various stages, but still has to be paid. So any drug that makes the cut has to pay for tens of other very promising compounds that turned out to be toxic, not effective in humans, or just not worth it (also including buying and shutting down competitors or discontinuing tests on drugs that might work, but would hurt company's other business).
That being said, there's something very wrong with drug prices in the US.
7 of the 10 largest pharma companies spent more on marketing than r&d during the height of the covid 19 pandemic. In aggregate, the 10 companies spent 37% more on marketing than r&d.
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