Recent analysis shows that the high priced research and development companies which show $1.3 billion cost are not real. The health economists demonstrate that the cost nearly accounts to 5-15 per cent of $1.3 billion. The real costs with all the analysis and results conclude to just $60 million in total. The myth regarding the high costs of pharmaceutical research are now decoded to the world. The initial phases do not account any tax exemptions the companies avail. The industry also does not include the cost of basic research, which often takes decades and is mostly done in public funded universities or labs. There are no credible figures to be in favor of the R & D cost and yet the costs soar high. If they had invested in the stock market instead of R&D, the exaggerated estimates of profits of companies could have been much better. There is also inflation seen in the clinical trials. A pharma company estimated a figure of $802 million to bring a new drug. By 2006, this figure was updated by 64% to $1.32 billion. It is unbelievable to know that the audited cost of all clinical trials submitted by pharmaceutical companies in the late 1990s to the Internal Revenue Service averaged only $22.5 million. There is a strong interest of pharmaceutical companies in R& D costs to generate capital worth in tax concessions and increasing patent terms.
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