It’s tempting to view Big Pharma as Dr Evil in the medical value chain, but the resources that are ploughed into developing "blockbuster medicines", without certainty of success, are colossal. According to PhRMA, which represents pharmaceutical research companies in the US, it takes on average 10 years and US$2.6bn to develop a new medicine, with only 12% of candidates in clinical testing ever making it to the market. PhRMA says in the past 16 years "there were more than 120 unsuccessful attempts to develop medicines to treat Alzheimer’s disease, 96 for melanoma and 167 for lung cancer. Only four were approved to treat Alzheimer’s, seven for melanoma and 10 for lung cancer". Of course, if your firm does successfully develop a cure for the conditions that are increasingly set to befall ageing high-income nations, then you are in the pound seats. Lipitor, the anticholesterol wonder drug, for example, raked in sales of over $9bn/year for parent Pfizer before going off patent.
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