Government impact on medicine


Did regulation throttle the once thriving German pharmaceutical industry?
This one is about Germany, but it also applies to the United States with the Medicare drug benefit about to kick in. Add the desire of Congress to regulate everything under the sun, and we may be facing the same problem.

A range of shortsighted government policies did much of the damage: Reference-pricing policies, in which the government will pay only for a certain amount of low-cost medicines in a class of drugs, have become one more disincentive to develop improvements in any category of drugs. Price and access controls make private R&D too expensive, even forcing some labs to shut down. And by steadily scaling back the government resources available to support research, Germany has put its drug-makers at a severe disadvantage.

In fact, early drafts of a forthcoming study indicate that Germany’s share of global pharmaceutical R&D spending fell from 13 percent in 1973 to a mere 7 percent in 2000. Looked at another way, if Germany simply invested the same share of global R&D resources in bio-pharmaceuticals it invested in 1973, it could create 35,000 more jobs in the field.

Unfortunately for Europe, Germany’s decline is just part of a Europe-wide problem. Media on both sides of the Atlantic have reported the piecemeal relocation of Europe’s biopharmaceutical industry to America. Upon moving its global research headquarters to the U.S., Switzerland’s Novartis created a cutting-edge biomedical research campus in Cambridge, Massachusetts, in 2002. Likewise, after transplanting its international headquarters to New Jersey in 2002, Dutch drug giant Organon launched a new biotechnology research facility in Cambridge in mid-2005. Organon officials call the region “the perfect breeding ground for medical biotechnology.” The Anglo-Swedish AstraZeneca is investing hundreds of millions of dollars in new labs in the U.S., and almost 30 per cent of its employees are now based in the Americas. The UK’s GlaxoSmithKline has manufacturing and research facilities across the U.S., and almost one-quarter of its workforce is now based here.

At the moment, the United States has a competitive advantage because we are relatively easier to do pharmaceutical business in. However, that is not an absolute. Government interference has caused more than a dozen American companies to stop producing flu vaccine, so that the only source for the government to buy vaccine is located in the UK.

More than a dozen companies to zero, all in about 15 years.

— NeoWayland

Posted: Thu - January 12, 2006 at 04:41 AM  Tag


 ◊  ◊   ◊  ◊ 

Random selections from NeoWayland's library


Pagan Vigil "Because LIBERTY demands more than just black or white"
© 2005 - 2009 All Rights Reserved