Understanding Risk and Reward shares some pharmaceutical research costs:
It costs over $800 million to bring a new drug to market. Indeed, Sir Tom McKillop CEO of AstraZeneca said yesterday that it costs as much as $1.2 billion from inception to first sale. The cost is so high because the vast majority of compounds discovered and tested don’t do anything useful, the ones that do might be toxic or have side-effects significant enough to make them unworkable. These defects won’t be realized until after many years of trials, costing millions of dollars for each failure — most compounds that make trials fail. The few that survive can make a fortune, but even then may have to be withdrawn, with lost revenue and potential litigation costs escalating.But since the returns can be high, the U.S. research-based (non-generic) pharmaceutical industry currently spends upwards of $33 billion annually on R&D.