Just a decade ago, Europe conducted more than two-thirds of all drug research, whereas now the United States accounts for two-thirds, says Grace-Marie Turner of Galen Institute.
Europe’s deliberate government policy, in the form of price controls imposed by national health care systems, slowly choked a once-thriving economic sector. After all, Europe’s government buys most drugs and therefore sets drug prices 40 to 60 per cent lower than the free-market prices in the United States. However, these controls seriously hurt innovation, says Turner.
Consider the impact of Europe’s price controls:
Ironically, says Turner, the U.S. Congress added a new prescription drug benefit to Medicare, and to deliver the benefit, the government encourages negotiation for the best prices among private, competing pharmaceutical companies essentially setting prices for all 40 million Medicare recipients.
If this happens, research-based pharmaceutical companies will move on to Asia, where technology and education continually improve, says Turner.
Source: Grace-Marie Turner, Europe’s Drug Industry is Model for U.S. to Avoid, Heartland Institute, February 2006.
For text: http://www.heartland.org/Article.cfm?artId=18489
For more on Health: http://www.ncpa.org/iss/hea/
FMF Policy Bulletin/ 28 March 2006
