A pharmaceutical company spends large amounts of money in developing new prescription drugs. Once the new drug is approved for use,it frequently can be produced and marketed for considerably less money than it took to develop,so the profit margins are large if one considers only the money spent during production and marketing. This situation represents the idea of

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The situation described represents a scalable business model, where the initial investment in research and development can be recouped through the production and marketing of the drug at a lower cost, resulting in high profit margins.

A Pharmaceutical Company Spends Large Amounts of Money in Developing