In debating whether drug companies have high rates of return or moderate rates of return, economists favoring the drug industry's point of view are that those opposing it overlook one key factor that, if you ignore, leads to an overstated rate of return. It is the

Question

Quizplus · Accepted Answer

Economists favoring the drug industry's point of view argue that those opposing it overlook the opportunity cost of the money invested in the invention and testing of the drug. This cost should be considered as it represents the returns that could have been earned had the money been invested elsewhere. Ignoring this cost can lead to an overstated rate of return for the drug companies.

In Debating Whether Drug Companies Have High Rates of Return