The rate of drugs licensed by the EMA doubled over the period, increasing from an average of six per year from 2000-08, to 13.5 per year from 2009-16.
Pick either number there, your choice.
We can annualise the costs and revenues of the industry. That is, say that the 13.5 drugs approved in any year must, over their lifetime revenues (patent lifetime revenues, so perhaps 8 years from actual first prescription or thereabouts) cover the entire R&D costs of the whole industry.
It’s not entirely true that anything licenced in the EU will also be in the US but it’s a reasonable shorthand to assume. Thus all global R&D costs, for the one year, must be covered by the gross margins on those 8 years of sales of those 13 drugs.
It would be interesting to have those numbers really. Because it’s not entirely obvious that the industry as a whole does make a return on capital invested. Sure, the big extant companies do, we can see that in their accounts. But does the industry as a whole? How much is lost on start ups that just fizzle?
No idea where we’d start to try and find those numbers. But would be fun if someone did it…..
Why? Because we’re told that the current private sector and patent protected method of drug development is inefficient. Should be replaced with state development of everything. And, well, that’s only true if the capitalists are indeed laughing all the way to the bank, isn’t it? If the overall returns to capital are modest or even negative then it’s a system which is, in terms of the returns to those engaging in it, efficient.