Chemotherapy drugs cost a ton of money. Avastin, for example, is super expensive.
But how much does it actually cost the company to make? What is the markup on chemotherapy drugs?
Manufacturing costs are a pretty small part, though biologics like Avastin are harder to make than many “traditional” drugs. By far the biggest cost is research and development, which costs in the ballpark of $1 billion. That includes the cost of tens or hundreds of drug candidates that failed at some stage of testing. So it doesn’t make much sense to talk about “markup”. Rather, the drug company has to set its price so that it earns back its R&D costs. If you’ve got to make $1 billion over the 15 remaining years of patent life, and there are only a few thousand patients that can benefit from your drug (each year), then you have to charge five figures to each patient.
I know that R&D is enormously expensive, which is one of the reasons they charge so much. They have to recoup their money somehow.
But I’m not asking about. I just want to know how much the actual drug costs to produce.
Fair enough. My google-fu isn’t giving me anything specific on the manufacturing costs of biologics. Here, too, the manufacturing process alone has a lot of associated R&D costs. And this class of drugs doesn’t even have generic alternatives yet; the FDA only just recently figured out how they would regulate “biosimilars”.