The company typically outsources the actual manufacturing of the pill, as well as the packaging and shipping. Those are real costs. The largest expenses are ma

The company typically outsources the actual manufacturing of the pill, as well as the packaging and shipping. Those are real costs. The largest expenses are marketing and sales. Doctors won't prescribe drugs they don't know exist, so "educating" doctors about the benefits of a drug is a paramount. Contracts have to be negotiated with all insurance companies, and that's expensive too. How profitable the business of generics actually is, we don't know for sure. The pharmaceutical industry is notoriously vague about how much profit they make, and the numbers they report are questionable. For instance they'll call market research into which drug to buy next "R&D".