text: Severin Schwan, the CEO of the Swiss company Roche, reported that Roche's research and development costs amounted to $12.3 billion in 2018, a quarter of the entire National Institutes of Health budget.  Given the profit-driven nature of pharmaceutical companies and their research and development expenses, companies use their research and development expenses as a starting point to determine appropriate yet profitable prices.
  Pharmaceutical companies spend a large amount on research and development before a drug is released to the market and costs can be further divided into three major fields:  the discovery into the drug’s specific medical field, clinical trials, and failed drugs.