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My understanding is that the FDA trial is a trivial expense[1][2] in the whole drug development cycle. What I usually hear is that R&D that spans years to deca

My understanding is that the FDA trial is a trivial expense[1][2] in the whole drug development cycle. What I usually hear is that R&D that spans years to decades is what the pharma company wants to recoup during the patent phase. https://www.jhsph.edu/news/news-releases/2018/cost-of-clinical-trials-for-new-drug-FDA-approval-are-fraction-of-total-tab.html https://www.jhsph.edu/news/news-releases/2018/cost-of-clinic... https://www.outsourcing-pharma.com/Article/2018/09/26/Clinical-trial-cost-is-a-fraction-of-the-drug-development-bill https://www.outsourcing-pharma.com/Article/2018/09/26/Clinic...

AnthonyMouse 8y ago
You're comparing the wrong numbers. The trial costs are small compared to R&D costs, but that's only because R&D costs are very large. So it's millions of dollars compared to billions of dollars. But generics don't have R&D costs, they already exist and are out of patent. Which correspondingly makes them much less profitable -- that's the whole point -- and then "millions of dollars" becomes a significant cost. Moreover, it's a free rider problem, because once you pay for it for a generic drug, anyone can make it, but they didn't have to pay the millions of dollars for the trials so now they can undercut your price. As a result everybody sits around waiting for somebody else to spend several million dollars for a trial instead of doing it themselves, which means that nobody does it.