There's a lot going on there, but part of the expense is that they have to rush to develop the drug first, otherwise they get nothing for their investment. 

Economically speaking, the patent system creates an all-pay auction. I recall from some of my undergrad coursework that this type of auction often generates enormous losses when put in practice.



Undisciplined

libertarian

Strong arguments against patents

r3drun3

Idk, I don’t want to advocate for pharma companies, but the fact is that they (some) do spend a ton of money on R&D. Assuming, newly made drugs are not patent protected and every other company can benefit from producing drugs right after the drugs are discovered, I can’t really imagine who would do that. Another thing is whether the drugs, once in the market, need to be expensive as hell. And I guess, this is true for many other industries.