Re:Non-profit’s $300 hepatitis C cure as effective as $84k a...
by soVeryTired on Thursday April 12, 2018 @07:47AM
(#16819837)
I once read an article on some of these practices. From memory, one company claimed the opportunity cost of investing in the stock market and gaining an assumed 12% per annum as part of their 'research cost'.
Edit: I think the article referenced Joe DiMasi's work [0], which uses a Capital Asset Pricing Model for cost of capital. Essentially, it says there's only one source of risk in the world, and you get paid 11% per annum for taking that risk. I'm pretty sure this work really informed public policy. Shitty economics strikes again.
Most of the people actually doing the research and the boring (but thorough, and necessary) test studies are paid a pittance, while the company has every incentive to do some hollywood accounting and overstate what they spend on everything. In the end it's mostly profit for execs and shareholders.