Many pharma critics argue that drug companies skimp on research while earning outsized revenues – but a new analysis my colleague and I just published tells a more nuanced story.
First, some background. Journalists and academics often point to the fraction of revenues that drug companies spend on research versus “sales, general and administrative” (SG&A) expenses as evidence that pharma under-funds research. But as Derek Lowe (here, here) and others have noted, these analyses provide zero insight into whether spending in each category is too high, too low or just right.
