According to a report by the Tufts Center for the Study of Drug Development.

The Drug industry has profit margins between 20%-25%. This is higher than any other industry of comparable size. The industry spends far more on advertising and administration than on developing new drugs. Most of the "new" drugs introduced to the market are simply new dosage amounts of existing drugs.

Additionally, we have the phenomenon of the drug companies inventing new applications for existing proprietary drugs. In essense, inventing new diseases.

And the tax code allows R & D as a deductible business expense instead of being capitalized over the usefull life of the patent protected drug. Neat deal, kinda makes you wish this largess was available to farmers too.

The Drug industry claims a cost of $ 897 million to develop a new drug. Public Citizen divided the number of new drugs on the market by the industry's total R & D budgets. They reduced this figure to only$ 71 million after deducting the tax benefits.

The figures you site encompass this 1000% error.

Publius