How to Money · Wednesday, September 23, 2026
Dr. Jordan Grumet debunks the claim that high drug prices are solely due to research and development costs. He states that pharmaceutical companies spend more on marketing and that much of the foundational research is publicly funded by entities like the NIH. The large profits garnered by these companies, coupled with tax breaks, indicate a system where the public effectively pays for research and then overpays for the resulting medications.
“The reason why we get to charge $ 5, 000 or $ 10, 000 for each dose of chemotherapy is because we spend so much on R & D, which is 100% a myth.”
“Actually, studies show that most drug companies spend about $ 1. 8 billion of R & D for each drug, but that they make roughly $ 18 billion. What pharmaceutical companies actually spend on is marketing.”
“Since 1930, the NIH has spent $ 900 billion on research that was completely government and publicly funded. And guess what? They did a study in 2016 and they looked at every drug that came to market from 2010 to 2016. Every single drug that came to market had research that started by being NIH funded.”