A reason to love the U.S.A….drug innovation

Via Carpe Diem

Most all the world pays a marginal cost for drugs, medical devices, and procedures that does not come close to repaying the development effort that went into those products. Further, most of the world has regimented medical systems that have very strong immune systems against any sort of innovation. As a result, almost all medical innovation occurs and is paid for in the United States, with the rest of the world acting as a free rider. Sure, some Swiss or Japanese firms still develop a few drugs, but most of those efforts are still justified by profits in the US market.

~Coyote Blog


The U.S. is still driving quite a bit of product innovation. Our messy, organic, wasteful, unfair, irrational system allows experimentation, and Europe cherry picks the best results. If we stopped doing this, their system would stop looking so good.

~Megan Mcardle

BM: I never thought of this at all, but this is so true.  What a great example of a free rider problem.

I am completely uninformed on health care in the U.S., but I believe currently it is private.  If Obama makes health care public, will this innovation slow due to a lack of monetary incentive?  Then the rest of the world suffers as the newest innovations in medicine will dramatically slow as no one wants to sink a bunch of money into R&D and not even cover the cost.  I never thought I would be somewhat happy about privatization in health care, but now I am a little more supportive although I still firmly believe everyone should have access to healthcare.