Pharmaceuticals and Drug Commercialization

Prescription drugs are healthcare's most profitable product and its most politically exposed. A new medicine can take more than a decade and a reported ~$1–2.6B (capitalized, failures included; estimates vary widely) to reach the market. It then earns most of its lifetime revenue during a short window of patent and regulatory exclusivity, before generics or biosimilars cut its price by 80–90%. US net spending on medicines was ~$606B in 2025 (IQVIA), against ~$1.36T at list prices; the gap between the two is the rebate and discount system that the next section (Pharmacy, Distribution and PBMs) explains. This section covers how drugs are developed and protected, how they are priced and launched, the loss-of-exclusivity cliff, the GLP-1 obesity drugs that made Eli Lilly the first drugmaker valued at a reported ~$1T (November 2025), and the Inflation Reduction Act's Medicare price negotiation, the biggest change to US drug pricing in decades.