> I did a quick Google search on this and the R&D annual budget  for the
> NIH (US government health research) is 28 billion and Novartis spent 4.8
> billion in 2005 on R&D.

One has to be pretty careful about throwing around these numbers.  The
US spends considerably more than $28B.  There are substantial
contributions to medical research made by other agencies such as the
military thru the VA, DARPA, etc.  Some states also appropriate money
for medical research.  California, New York and Massachusetts spend
several billions each every year.  Then there are the quasi-public
charities such as the National Cancer Society, foundations like Ford,
Gates, etc.  Direct non-grant funding at many universities, etc.

Much of the money spent by drug companies on R&D goes into the "D"
rather than the "R."

I think the system is overly weighted to the drug companies' favor, but
nobody in power seems overly anxious to challenge it, although once in
a while, a University will try and cut a better royalty deal for
itself..

The US and Japan are the only advanced countries without universal
health care, and those governments do not negotiate drug prices.  Thus,
there is a two-tier pricing system in the developed world for most
drugs.  US and Japanese residents pay much more than other developed
countries.  As someone pointed out, the marketing and sales expenses of
drug companies are at least double the R&D.  The distribution system is
partly to blame for that.  In any event, the issues are purely
political in the US, and the politicians have no interest in changing
the system.

I personally think the only chance to lower drug costs will come when
the majority of baby boomers are on Medicare and the system will no
longer be able to bear the cost.


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