U.S. Demand Drives the Drug Market
Except in rare cases, pharmaceutical companies develop drugs for the U.S. market. For drugs that make it in America, potential sales in Europe, Japan, Canada, China and elsewhere are gravy. Drugs that can’t make it in the U.S. are scuttled. Probable success in America is a necessary and sufficient condition for the development of new drugs. There are four main reasons for this:
This is from Charles L. Hooper and David R. Henderson, “Expensive Prescription Drugs are a Bargain,” Wall Street Journal, September 13, 2022 (September 14 print edition.)
Why did the Journal give it the title it did? It’s accurate. Here’s another excerpt:
Research by Columbia University economist Frank Lichtenberg suggests that 73% of the increase in life expectancy that high-income countries experienced between 2006 and 2016 was due solely to the adoption of modern drugs. He also found that the pharmaceutical expenditure per life-year saved was $13,904 across 26 high-income countries and $35,817 in the U.S. Most Americans would pay $36,000 to live an extra year.
We also address the fact that governments around the world free ride on Pharma’s R&D that we Americans pay disproportionately for. In short, it sucks to be us. But we still get a good deal, as the paragraph above shows.