Consider Hepatitis C. Chronic infection puts the patient at risk for cirrhosis and eventual liver failure, and the treatment for that is a liver transplant.
A couple of years ago Telepravir (Schering/Merck) and Boceprevir (Vertex/J&J) came to market. The price for a course of treatment has nothing to do with the cost of development and everything with the cost of a liver transplant, it's slightly less than that.
Even before prices for HCV drugs went down due to competition, they offered a cure for a life threatening disease for less than $100K in the US with minimal side effects, typically in 8 weeks, and with 95% effectiveness. The agent is a small pill taken twice a day. Price is scaled to personal income in country of treatment.
That's more like 1/10 of the monetary cost of a transplant, which is a scarce and rationed treatment.
You didn't make it, but you hear far too often that drugs for management of chronic conditions are more profitable than cures for acute conditions, and that's what determines what goes into the development pipeline.
The truth is more complex than that. The reason that you don't see investment in antibiotics is that the low-hanging fruit is picked and you cannot use the new compounds unless as a treatment of last resort, and sales would be far too low to be profitable. They will be needed, though, in the medium term. The financing model in pharma is broken and there is no change on the horizon in that department.
A couple of years ago Telepravir (Schering/Merck) and Boceprevir (Vertex/J&J) came to market. The price for a course of treatment has nothing to do with the cost of development and everything with the cost of a liver transplant, it's slightly less than that.