It Costs an Average of About a Billion Dollars to Develop

question 122

True/False

It costs an average of about a billion dollars to develop one new drug and clear all FDA rules. If a drug is not approved for marketing, the FDA pays the company for the costs of the tests.

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Definitions:

Depreciation

The systematic allocation of the cost of a tangible or physical asset over its useful life, recognizing it as an expense.

Tax Rate

The fiscal percentage deducted as tax from an individual's or corporation's income.

CCA Class

Capital Cost Allowance Classes are categories in tax systems that determine the depreciation rate for tax purposes on assets.

Depreciation Tax Shield

The reduction in taxable income for businesses due to the allowance for depreciation, thereby lowering tax liabilities.