I always thought it was Big Parma’s way of recouping R&D costs. But this says that’s not the case.
How it works: Using publicly available data and common industry assumptions, Pachman built out a rough, simplified sketch of how money changes hands for a “typical” generic drug.
This drug would cost about $3 to make and would sell for about $15.
So, what happens to the other $12? It’s split among the manufacturer (about $3), the pharmacy ($1.50), a wholesaler ($2), and, finally, the largest share goes to the company that manages your insurance plan’s drug benefits ($5.50).
There’s more @ The many reasons why drugs cost so much and it provides these links to more;
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The main issue with prescription drug price transparency