For years pharmaceutical companies have featured in the list of the top profit making companies. Even in 2016 they were predicted to have the highest profitable margin. And with the increasing population, a shift towards a sedentary lifestyle has taken place and healthcare becoming more and more accessible to humankind, the scope for sales and need for new medicines is ever increasing. This fact is easily cashed in by the pharmaceutical companies, who generate large revenues by catering to this ever growing disease market.
A higher profit margins allows them to be more flexible with their spending on various important aspects like marketing, branding and distribution etc. Which ultimately results in greater spending on research and development of new therapeutic agents, which is most crucial investment of them. The budget analysis of leading global pharmaceutical companies reveals that out of the billion dollars revenue generated by the companies only a small percentage (around 18% on average) was devoted to their R&D departments.
Key Role Of The Big Pharma
Since the Big Pharma are often profit driven, their research tends to focus on the diseases of the developed nations which can afford to buy their exaggeratedly priced drugs. Thus research invested towards diseases like TB , drug resistant bacterial strains and other communicable diseases, which are major challenges faced by the third world countries, lags behind.
Is Pharmaceutical R&D Proportional To The Profits Earned
Is Pharmaceutical R&D Proportional To The Profits Earned
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