4 ms·
Right. Because exorbitant profit is the only motivation for research.
by _emacsomancer_ 8y ago
Right. Because exorbitant profit is the only motivation for research.
- darawk 8y agoSomeone has to buy the lab equipment and pay the scientists. If you think their profit is 'exorbitant', then you should be investing in pharma. But historically and as a whole, they generate returns comparable to the rest of industry.
- _emacsomancer_ 8y agoReturns comparable. That doesn't mean the rest of the money is all lab equipment. Pharma ends up poaching work developed at Universities.
- tzs 8y agoFor all but one of the specific drugs mentioned in the article, the lab equipment and scientists were paid for a long long time ago. One is a common hormone produced in the human body that was isolated over 120 years ago and has been used for medicinal purposes almost as long. Another was discovered in 1952 and has been used in medicine since 1953. Another was patented in 1961 and approved by the FDA in 1971. The two related to abortion were developed in 1973 and 1980, respectively.
- darawk 8y agoYou make a good point here. I think the article should have discussed this a bit, I made the assumption that they were cavalierly trying to copy drugs currently under patent. If that is not the case, I mostly retract my criticism of them. Thanks for pointing this out.
- gowld 8y ago> If you think their profit is 'exorbitant', then you should be investing in pharma. is not necessarily true. Expected future returns are already priced into stock of incumbents.
- darawk 8y agoYou're correct. But look at their PE multiples and their margins. They're not wildly out of line with other companies.