Earlier quoted context omitted.
But most of those R&D costs are for getting "FDA" approval. I don't see why India (or anyone, really) should pay for lining the pockets of the USA's inefficient and corrupt bureaucratic machinery. Or I could be wrong and those $12B really goes into equipment and lab workers wages, but you won't blame me for finding it real hard to believe until I see at least a rough breakdown of how those costs are summed up. From t…
The majority of the money goes into Phase III clinical trials. Don't bash the FDA - they're the most evidence based, scientifically minded regulatory body in our government. Preclinical and Phase I - II trials aren't too expensive, in the order of millions of dollars. But also remember, for every ~10,000 candidates that enter preclinical trials, about 1-2 will actually pass FDA approval. The billion number isn't just…
That is exactly where so much of the inefficiency comes from! How rigorous does an evidentiary requirement have to be before it costs more than it's worth? If getting FDA approval for a new drug cost, say, $100 billion, would the added safety be worth holding back all the drugs that wouldn't be profitable enough to offset that huge up-front cost? A truly efficient FDA would take into account not just the harm of being too lax, but also the harm of being too strict.
(There's an even starker example of this in the Nuclear Regulatory Commission. Their regulations are so strict and red-tapey that the economics of nuclear energy in the US are inferior to those of coal, which is much more dirty and dangerous. Caution has costs.)