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Pros & Cons: Investing in Drug Development for the Health and Pharmaceutical Industries

When it comes to the development of innovative pharmaceutical drugs, one of the integral keys to success is a high standard of research and development (R&D). Most of the time, the R&D process in drug development can be a daunting task. Essentially, this overarching need for comprehensive R&D is the reason why it can be challenging to produce groundbreaking drugs—aside from the high costs, the whole development cycle can be time-consuming and highly vulnerable to risks. With all these challenges combined, the chances of successfully producing a successful drug that meets stringent standards can be quite low.

While pharmaceutical companies work hard to develop new treatments for medical conditions, one should understand that some drugs fail to successfully treat a patient even after a rigorous R&D cycle. Hence, there are cases when pharmaceutical drugs can cause severe side effects that may lead to permanent disabilities or even death. For instance, in an Elmiron claim that was recently filed, there have been reports of side effects from people who used the drug to treat overactive bladder syndrome. Several people have filed a lawsuit against Elmiron’s manufacturer due to side effects such as permanent vision damage and other incurable eye diseases. 

These cases result from the failure to deliver the right conduct in the R&D process. This is why investing vigorously in drug development is important. It takes billions of dollars to create a safe and effective drug, and as such, the results should be as perfect as possible. Investors’ money is also at risk, particularly when the venture fails.

If you are interested in becoming a stakeholder, it’s vital to understand what it takes for a successful drug to become successful—from development to mass production. That said, here are some of the pros and cons of investing in the R&D of drugs in support of the health and pharmaceutical industries. 


Apart from providing the general public with trailblazing cures, launching successful pharmaceutical drugs also has positive implications for stakeholders. Chiefly, investing in R&D is beneficial because it:

Ensures Safety and Effectivity for Public Use

All medicines and treatment options need to undergo proper R&D cycles before they go to market. This is to ensure their safety and efficacy, especially in relation to the physiology of the people who need to take them. This is also why drug manufacturers conduct clinical trials in various phases. 

Clinical trials are safety monitoring procedures intended to discover not just efficacy, but also potential side effects and possible lethality. The final phase of clinical trials, Phase III, is considered a late-stage trial and typically involves up to 3,000 people. Surpassing Phase III generally means that a drug is reliable enough to treat illnesses. That said, the FDA may opt for accelerated approval or the authorization of a drug before Phase III completion. However, this case often applies to cancer drugs only.

Strengthens Product Credibility

Generally, pharmaceutical drugs and treatment options developed in the US must complete the first three phases of clinical trials to be considered for approval by the Food and Drug Administration (FDA). Of course, products that have received FDA approval are highly credible and can be trusted for public use. 

Promises Industry Recognition

Even though the FDA generally requires drug companies to complete only three phases of clinical trials to be approved, some manufacturers want to go beyond regulatory mandates and proceed to Phase IV. If successful, the last trial will prove the superiority of the drug, which the manufacturer can include in the messaging of their marketing campaigns. The success of a certain drug may lead to global recognition—for the people involved in R&D as well as the stakeholders.

Delivers Big Profits to Stakeholders

Yes, it’s possible to win big when you invest in the R&D of pharmaceutical drugs. In a 2020 study, researchers found that the median net income or earnings of big pharmaceutical companies were 13.8 percent greater than non-pharma firms. Once the drugs are distributed to the market and have been proven successful, sales could translate to a high profit margin, leading to high returns on the investors’ end.


Despite these benefits, there are also a few reasons why investing in drug development and research can be risky. This is because drug R&D:

Involves Substantial Costs

The R&D side of drug development can cost a hefty fee. Before a drug enters the market, manufacturers may need to earmark a large budget—one that factors in out-of-pocket expenditure, capital costs, R&D times, and failure/success rates in clinical trials. The overall cost is often debated, but one study posits that it may require up to $2.8 billion in funding just to get drugs approved and mass-distributed. 

Has a High Risk of Failure 

Starting the development of a new drug invites all sorts of risks, especially the risk of failure. As mentioned earlier, newly developed drugs must undergo clinical trials to thoroughly test their safety and efficacy. Prior research has found that only 60 out of 100 drugs can be cleared to conduct Phase II trials, and of that number, only 20 may move forward to Phase III. That number is narrowed down further with only 12 achieving FDA approval. These figures are enough to slightly dampen the spirits of stakeholders aiming for their products to reach the finish line.

Is Still Vulnerable to Oversights

Even though the FDA approval process is already quite comprehensive, there are cases when side effects have been discovered after the fact. One should not rule out the possibility that side effects may occur years after achieving FDA approval. These side effects can be severe, as in the case of Elmiron, and result in various lawsuits. If you have experienced similar side effects involving pharmaceutical drugs, you can contact Schmidt & Clark for expert advice and legal defense for your claims.

As with any investment, funneling money into the creation of new drugs is a “high risk, high reward” scenario. There are big payoffs that come with investing in R&D: large profits, worldwide recognition, and significant contributions to public health. On the other hand, stakeholders could potentially be wasting money on drugs that are bound to fail. Investing in drug R&D is highly profitable, but it’s not without risks—and the risks can be insurmountable. Nevertheless, becoming a stakeholder in the creation of a safe, reliable, and efficient drug is a noble cause considering the thousands of people who would benefit from the results.