http://online.wsj.com/article/PR-CO-20090722-903516.html?mod=wsjcrmain

2009 Guidance(12)
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Reported Revenues $45.0 to $46.0 billion
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Adjusted Cost of Sales(1) as a 14.5% to 15.5%
Percentage of Revenues [$7.13 billion]
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Adjusted SI&A* Expenses(1) $13.4 to $13.8 billion
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Adjusted R&D Expenses(1) $7.0 to $7.4 billion
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Adjusted Other (Income)/Deductions(1) ($600 to $700 million)
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Effective Tax Rate on Adjusted Income(1) Approximately 30%
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Reported Diluted EPS(2) $1.30 to $1.45
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Adjusted Diluted EPS(1) $1.90 to $2.00
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[* SI&A means Informational & Administrative: Advertising costs and Executive compensation. These are not broken out separately.]

Comments in square brackets [] are mine.

It is easy to see that actual production costs (cost of sales) is about half what the big enchelata, SI&A. In fact, the sum of BOTH production and R&D costs is barely as large as SI&A.

In short, the combined costs of R&D plus manufacturing costs comes up to about 30% of revenues.

You will also note that the costs listed do not come near to gross revenues. The resulting colossal profits result in a very high EPS=Earning Per Share. This money is NOT spent on R&D.

And Pfizer has the LARGEST R&D budget. One can presume that the story at the rest of the drug companies is just as shameful.

David F Mayer