We already know the cost of buying pharmaceuticals is very high, seemingly climbing higher and higher. Well, says the industry, they cost a lot to discover. The number that was always quoted was $1 billion. Which is quite a lot, but according to Bernard Munos (posted by Matthew Herper at Forbes), the actual figure is much higher, from $4 billion all the way up to $11 billion.
The difference comes from taking into account the failures as well as the cost of taking on a project from start to finish. That process is not cheap (with a large chunk of money going into the clinical trials prior to approval), but the ones that make it all the way to the end are really the exception. If you look at the research budget for the company as a whole and look at how many drugs came out from that spending, it is jaw-dropping how much money has been spent in the pursuit of an approved drug.
And you can see why the pharmaceutical industry wants to try and get some of that investment back, even as that course of treatment spirals up and up in cost.