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Congrats to them to for curing a major disease but some bits of the economics seem a bit odd - initial research cost about $14m paid partly by tax payers. Gilead spends "tens of millions" to put it through trials and then it gets sold, partly back to the same tax payers, for about $84k * 3 million = ~ $200bn.

( http://www.bostonglobe.com/business/2014/05/31/costly-new-he... )



Did you read that whole article, or just skim it?

The piece where I am assuming you got your numbers from...

"Federal grants and Pharmasset’s research outlays on Sovaldi totaled more than $14 million, but Gilead spent tens of millions more to shepherd the drug through clinical trials."

That is only a tiny fraction of the cost invested by Gilead on this drug. If you read the whole article you would see that Gilead took a big risk and paid $11B to purchase Pharmasset before this drug had been approved so they could bring it to market. Their total cost is well over that by now.

Now add to this the fact that when a pharmaceutical company makes a new "wonder drug", the other big pharma companies get right to work on make workable variants so they can get a piece of that pie.

Take a look at GILD on Yahoo Finance sometime and you will notice they are remarkably flat lately despite great profit margins, P/E, etc... This is because investors are worried long term. A variant product could destroy the profitability; now add to that the government wants to get involved and start regulating the prices on this thing. PFFH




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