Excellent links, thanks. http://emoglen.law.columbia.edu/twiki/pub/LawNetSoc/BahradSokhansanjFirstPaper/10NatRevDrugDisc428_pharma_productivity_crisis_2011.pdf

Excellent links, thanks. http://emoglen.law.columbia.edu/twiki/pub/LawNetSoc/BahradSokhansanjFirstPaper/10NatRevDrugDisc428_pharma_productivity_crisis_2011.pdf http://emoglen.law.columbia.edu/twiki/pub/LawNetSoc/BahradSo... seems to expound on a criticism of the first paper, which asserts that it muddles the data by classifying drug origin by company headquarters, rather than the market in which the research is done and the drug is first patented in. With that reclassification, their data seems to show that US-based research (though not necessarily US-headquartered companies) substantially outperforms EU-based research both in quantity of NMEs and sales. > At first glance, the organizations with their headquarters based in European countries are characterized by a higher probability of market launch for compounds entering clinical development. However, when the composition of research portfolios is taken into account, the apparent comparative advantage of European organizations vanishes. Your second link seems to reinforce this: > The European Federation of Pharmaceutical Industries and Associations reported that, between 1990 and 2003, its members increased their research and development investments in Europe by 2.6-fold and in the US by fourfold It's obviously silly to claim that all research has fled Europe (it clearly has not), but it does seem evident that European-based pharma countries are electing to research and bring to market first in the US. I think the question then is "why?" - is it the US's higher effective ceiling on drug prices? Higher per-capita drug spending? Higher probability of success through the FDA versus the EMA? What are the causes, and what are the effects? Economic wisdom tells us that long-term price controls reliably cause shortages, either by underpricing demand and/or by disincentivizing supply; I don't think it's unreasonable to presume that the same effect would be in play to some degree here. The pharma industry is obviously extremely distorted by regulatory intervention, both in barriers to entry for a new product and barriers to entry for competition on existing products, so conventional wisdom can't be applied across the board, but I can't imagine that the effects of price controls are negligible.