About half of that research cost is paid for by you and I as taxpayers.
Most of the research takes place on university campuses with university paid for equipment.
These companies share 0% of the profit they make from your funding. I think they owe a few discounts for humanitarian purposes, such as this.
I get that it's not that simple. But the American medical system is fucked up badly, both in research and application.
Just like medical treatment, most of the cash gets absorbed at the top and never makes it to 'research'. Dollar for dollar, Cuba outperforms the US in medical research.
That ain't right.
Most of the research takes place on university campuses with university paid for equipment.
Most "published" research takes place in public institutions on public equipment however pharma companies generally do private research in private facilities that they do not publish publicly because it is considered a trade secret (in fact most pharma companies only do research, they never produce a drug that goes to market). Also a great deal of the funding grants received by universities for specific research is funded by private companies interested in exploring an area but not so interested they would put their own people on it (also this helps with recruiting talent, if you have some college kids trained and already doing your work for free when they graduate you have someone primed to work for you)
For most pharma the funding comes from venture capital and contracts with larger established pharma companies (Roche, GSK, Novartis, etc..). Generally a group of industry professionals interested in a specific area will come together and form a start up that is backed by a VC/Pharma which usually also allows them to use their equipment. If the start up fails it stays off the funding company's balance sheet, if it succeeds generally the funding pharma has a contract in place that may let them market the drug or gain licensing fees. It's a very cannibalistic landscape of buyouts and spin outs.
I agree that the American medical system is badly twisted and there a definitely some very sketchy pharma companies out there (generally the ones that make the news) but overall the intention of most of these companies is to cure/treat/prevent illness and then move on to something new.
overall the intention of most of these companies is to cure/treat/prevent illness and then move on to something new.
I'm not sure I would agree with that part.
I believe the intent of the company is to generate profit. It's method is to cure/treat illness, not their goal.
If their goal was to help people, reduced prices would be available to poor markets, without the use of legal or contractual force to compel them.
That is why I believe the for-profit model fails when applied to human health care. Human health is not an area that we are willing to accept 'efficiency'. It is efficient to let poor/old/disabled people die. There is no profit to be had in saving them, only further financial burden. So expecting a for profit mechanism to work well would be optimistic.
They're relying more on government programs/insurers to pick up the bill. While the figure sounds high this is a 1 time cure so it makes sense to compare this price to the compounded cost of the current treatments over a lifetime (which is likely what they did when pricing their treatment). Also being a cure for a rare disease means a very limited customer base so to recoup the hundreds of millions paid to develop such a treatment they don't have a whole lot of options that won't put them out of business (which is why most companies do not specifically target rare diseases but try to get current treatments approved as orphan drugs for these diseases as an FDA fast track to move on to larger target groups). Of course this is all very dependent on the pricing/efficacy of current treatments.