Cut Drug Pricing Secrets Big Pharma Doesn’t Share

Understanding the Cost Structure

The price of a drug is not solely determined by its production costs. Various elements contribute to the final cost, including research and development, marketing, distribution, and the profit margins set by pharmaceutical companies. According to a study by the American Medical Association, research and development account for approximately 17% of a drug's price, while marketing and administration costs can make up to 30%¹.