Final answer:
The majority of the money spent on new drug development goes into research and development, costly synthesis processes, and safety testing. Substantial investments are also made in exploring natural compounds, which account for a significant portion of newly approved drugs. The expensive and lengthy process is necessary to ensure that new, high-purity pharmaceuticals are safe and effective.
Step-by-step explanation:
The majority of the money spent on making a new drug is not just due to the cost of raw materials, but also encompasses complex research and development (R&D) processes. It involves several costly steps in synthesis and the use of expensive chemicals. Furthermore, about one-third of pharmaceutical R&D spending is directed towards natural compounds, out of which approximately 35 percent of new drugs brought to market are derived. Additionally, the high costs can be attributed to the sheer amount of material lost to achieve a high-purity pharmaceutical product, as indicated by the fact that only about one-fourteenth of the original material might be turned into the final drug. This highlights the significant investment needed in not just the production but in the entire drug discovery and development pipeline.
Consequently, pharmaceutical companies invest billions into the discovery of novel compounds, often derived from natural sources, to bring new medication to market. The glaring expenses are also a result of stringent safety testing and the long timeframe required, sometimes exceeding a decade and costing around $800 million on average for a single drug. This cycle of high investment and potential losses or competition often leads to discussions around whether profit should be the driving motivation for these companies versus the ethical obligation to develop high-utility drugs that may save lives. Government subsidies can sometimes aid in aligning these motivations with the public interest. However, the challenge of cost recovery is constant due to the competitive nature of the industry and the risks of failure or the easy replication of successful drugs by competitors.