Perceptions that the pace of new-drug development has slowed and
that the pharmaceutical industry is highly profitable have sparked
concerns that significant problems loom for future drug
development. This Congressional Budget Office (CBO) study --
prepared at the request of the Senate Majority Leader -- reviews
basic facts about the drug industry's recent spending on research
and development (R&D) and its output of new drugs. The study
also examines issues relating to the costs of R&D, the federal
government's role in pharmaceutical research, the performance of
the pharmaceutical industry in developing innovative drugs, and the
role of expected profits in private firms' decisions about
investing in drug R&D.
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