The blockbuster hepatitis C drug will cost about $900 (around Rs 54,000) in India for a 12-week course of treatment. That would be a fraction of the $84,000 (over Rs 50 lakh) price tag for the same treatment in US.

I'm sure that they wouldn't be that profitable if USA paid $900 for that drug, especially the first few years.

https://www.nytimes.com/2015/02/04/business/sales-of-sovaldi... 140,000 patients in USA and going to 250,000

But the answer is still, yes, there is profitability. Just not as much as with the hyper inflated prices in the US.

In short: Does the extreme cost for drugs in the US cause groundbreaking research to benefit the whole world?

No, same results could be had with way less profit. Money to fund moonshot research is still important though.

Reagents are getting cheaper and better as well.

Yesteryears low hanging fruit costs the same as today's low hanging fruit. They are harder to solve though.

And no, I'm not saying everyone single biotech startup is like this or every single researcher does this. And yes many fail, but that's the cost of doing business and it's something that makes things progress.

That's survivorship bias. Yes, the successful pharma companies are quite profitable, but there are 10 failed companies for every successful one.

I remember reading a paper that said the overall returns for the industry are either single digit or negative.

The big ones buy up the small generic producers and single new drug companies and get slightly bigger.

The ones who can't pass trials fail. That's business, especially in R&D.