Health Care Innovation
By Arnold Kling
Tyler Cowen reminds us that the U.S. is the leader.
In real terms, spending on American biomedical research has doubled since 1994. By 2003, spending was up to $94.3 billion (there is no comparable number for Europe), with 57 percent of that coming from private industry. The National Institutes of Health’s current annual research budget is $28 billion, All European Union governments, in contrast, spent $3.7 billion in 2000, and since that time, Europe has not narrowed the research and development gap. America spends more on research and development over all and on drugs in particular, even though the United States has a smaller population than the core European Union countries. From 1989 to 2002, four times as much money was invested in private biotechnology companies in America than in Europe.
Of course, my view is that some of this research money would be better spent determining which treatments are cost-effective. Or, as Tyler puts it, “the lack of good measures of health care quality makes it hard to identify and eliminate waste.”