[Ip-health] Andrew Sullivan: Europe's Beleaguered Drug Companies

[Mike Palmedo]

http://andrewsullivan.theatlantic.com/the_daily_dish/2007/06/europes-drug-co.html

Europe's Beleaguered Drug Companies

Andrew Sullivan
28 Jun 2007

I'm sorry to burst Kevin Drum's bubble, but the pharmaceutical companies
in Europe have been in difficulties for quite a while now, under the
burden of the socialism he favors for the U.S. healthcare industry.
According to the industry's own website, as long ago as 1994, the
European Commission Report on Europe's ailing drug industry said the
following:

    "Europe as a whole is lagging behind in its ability to generate,
organise, and sustain innovation processes that are increasingly
expensive and organisationally complex". The report underlines that the
pharmaceutical market in Europe has been negatively affected by
significant, excessive and uncoordinated government intervention that
stifles competition and discourages innovation. This also creates
significant inequity among European patients' rights to access of medicines.

Socialism fails. Always has. Always will. And the toll in Europe in so
many areas is clear. Here's what socialized medical systems have done to
European pharmaceutical research:

    # For over 100 years, Europe has been a powerhouse of pharmaceutical
progress and innovation. Over the last decade, however, Europe has
gradually lost its leadership in the pharmaceutical sector, with a
steady transfer of its R&D to the US - where policies and market
conditions are more favourable to pharmaceutical innovation.

    # Key benchmarking indicators show that between 1990 and 2002, R&D
investment in United States rose more than fivefold, while in Europe it
only grew 2.5 times.

    # In 1990, major European research-based companies spent 73% of
their worldwide R&D expenditure on the EU territory. In 1999, they spent
only 59% on the EU territory. The USA was the main beneficiary of this
transfer of R&D activity.

America is the last refuge for pharmaceutical innovation. And the left
wants to kill that off. There's more evidence of what socialism does to
healthcare R&D in Europe:

    # The latest data on new molecular entities (period 2001-2005) show
the predominance of the US which has now become the leading inventor of
new molecules in the world (61 against 51 for Europe)

    # The top 20 companies worldwide shows the leadership of US
companies. In 2005, nine (9) of the top 20 pharmaceutical companies in
the world are of American origin (against 8 for Europe).

    # US companies significantly increased their share in the world's
top selling medicines. On the top 30 worldwide products in 2005, 21
originate from the US against 8 from Europe.

    # US companies are more successful in disseminating their new
medicines at international level: 70% of the sales of new medicines
launched on the world markets during the period 1998-2002 were made in
the US, compared to only 18 % in Europe.

    # Whereas the European pharmaceutical market was still the world's
largest market in 1990 (representing 37.8% of the world market), it now
only represents 30% of the world market (compared to 47 % for the North
American market).

This is what the left wants to do to pharmaceutical research in the US
as well. There's a case for it: the usual leftist case for nominal
equality over quality and progress. They're not being honest about it.
They need to be.

--
Mike Palmedo
Research Coordinator
Program on Information Justice and Intellectual Property
American University, Washington College of Law
4910 Massachutsetts Ave., NW Washington, DC 20016
T - 202-274-4442 | F 202-274-0659
mpalmedo@wcl.american.edu