From Rockman59@comcast.net Thu Jul 15 09:46:18 2004
Subject:Re: The rights or wrongs of recovering R&D costs. Was: Musings on the XK-3 brouh

I guess the pharmaceutical industry would be the same way. Production
> is one thing (it probably doesnt cost $100 per pill for some drugs'
> raw materials)
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The pill business is kinda like the record business....that first
pill or CD can cost millions....that includes the raw materials,
R&D, labor, recording studio time, promotion and marketing,
whatever. When the product if finally released and the sales
hopefully start coming in, the cost of each unit drops...the more
you sell, the cheaper it gets to the company for each unit. The
retail price stays the same but the company makes a bigger net
profit on each unit sold. Microsoft is a good example of this with
their Windows operating system. They just keep cranking it out and
every time a new system goes on a new computer the money rolls in.
MSFT has around an 80% net profit on each OS sold...which is
incredible in the world of business.