Virtually every progressive recommendation about health policy for the last 20 or 30 years that the drug industry felt might harm its bottom line has been met by the threat that if they don't make as much money before, innovation will cease and there will be no cures for new diseases. ... There are a couple reasons that this is a specious argument. One is that according to their filings with the SEC, the drug companies only spend about 15 cents of every dollar on research and development.
--Jerry Avorn, chief of the division of pharmacoepidemiology and pharmacoeconomics at Brigham and Women's Hospital and author of Powerful Medicines: The Benefits, Risks, and Costs of Prescription Drugs, on medical innovation
This makes about as much sense as saying that Dr. Jerry Avorn cannot be that smart because his brain only weighs about three pounds. Presumably, you can't be really smart--really innovative--unless your brain is at least 30 percent of your body weight! ...
So how big should a "brain" be? Hard to say. But let's look at some companies that are generally recognized as pretty innovative, and their R&D as a percentage of revenue:
Apple: three cents out of every dollar
Google: ten cents out of every dollar
Intel: fifteen cents out of every dollar
Genzyme (innovative biotech startup!): sixteen cents of every dollar
US Government: three cents out of every dollar
I can assure Dr. Avorn that any venture capitalist would be happy to invest in these hidebound laggards who haven't had a new idea in centuries. The first few, anyway.
--Megan McArdle, Atlantic Monthly, laying the smackdown