[Ip-health] Andrew Sullivan: Europe's Beleaguered Drug Companies
Dudley, David D.
dudleydd@doj.state.wi.us
Fri Jul 13 13:28:30 2007
Alec--your crude, either/or policy choice is simply out of place here. I see
no reason why we can't have a universal payer on the demand side, and still
have a well-funded, competitive research sector. The burden is on you to
demonstrate why these two are linked, because it's certainly not obvious or
intuitive.
--David
-----Original Message-----
From: Alec van Gelder [mailto:alec@policynetwork.net]
Sent: Friday, July 13, 2007 10:22 AM
To: Dudley, David D.; ip-health@lists.essential.org
Subject: RE: [Ip-health] Andrew Sullivan: Europe's Beleaguered Drug Companies
You inadvertently just proved yourself wrong. His point is to illustrate
how an increasing amount of government intervention in all aspects of
European healthcare is having an effect (negative) on pharmaceutical
research in Europe. Your point is to say companies will invest in research
regardless of the policies the host government decides to implement. But
the fact is that the policies governments implement have a significant
impact on the quality of domestic research as well.
Increased meddling by European governments has yielded price controls on
medicines, as Dean was alluding to, but also many other daft policies - the
insistence on funding European universities with taxpayers money, for
instance. Others include over-precautious regulations, crippling tax rates
and inflexible labour markets.
The cumulative effect of all these self-defeating policies has undermined
the incentives to perform commercial R&D in Europe AND has also reduced the
supply of those willing or capable of performing quality research - rather
in the same way the best French software programmers are in Silicon Valley,
not France.
-----Original Message-----
From: ip-health-admin@lists.essential.org
[mailto:ip-health-admin@lists.essential.org] On Behalf Of Dudley, David D.
Sent: 12 July 2007 21:54
To: ip-health@lists.essential.org
Subject: RE: [Ip-health] Andrew Sullivan: Europe's Beleaguered Drug
Companies
Dean's absolutely correct: Andrew Sullivan mistakes differences on the
demand side (market based vs. universal payer) for phenomena that are almost
certainly associated with the supply side (availability of top research
scientists).
You better believe that if the top research scientists were all located in a
"socialist" economy, that the pharma companies would hold their collective
noses and still locate their research facilities there. To do otherwise
would be giving your competitors a critical advantage.
Sullivan's either mistaken about basic economics or disingenuously
attempting to confuse the issues just to confirm his near religious faith in
free markets. Either way, he's wrong.
--David
-----Original Message-----
From: ip-health-admin@lists.essential.org
[mailto:ip-health-admin@lists.essential.org] On Behalf Of Dean Baker
Sent: Thursday, July 12, 2007 1:42 PM
To: Mike Palmedo
Cc: ip-health@lists.essential.org
Subject: Re: [Ip-health] Andrew Sullivan: Europe's Beleaguered Drug
Companies
Since pharmaceutical companies get the exact same patent protection for
their products in every country in the world, regardless of where the
research was done, how could a relative decline in R&D in Europe possibly be
explained by lower drug prices there -- except insofar as drug companies
made a political decision to punish European countries for their pricing
policies?
Mike Palmedo wrote:
>
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
>
>
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--
Dean Baker (baker@cepr.net)
Co-Director
Center for Economic and Policy Research
1611 Connecticut Ave., NW
Washington, DC 20009
202-293-5380 (ext 114)
202-332-5218 (H)
www.cepr.net
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