> I believed this until very recently. I had a long discussion on Facebook with some friends in medical research and public policy. I learned that only a fracti

> I believed this until very recently. I had a long discussion on Facebook with some friends in medical research and public policy. I learned that only a fraction of drug costs are due to this issue. Literally 50% of medical research in the world happens in the US, and even more is funded (indirectly) by the US market. In the last two years, that number has dropped slightly below 50%, but only because of rapid growth in China and India. This is all medical research, not just pharmaceutical research. But yes, it is actually responsible for the bulk of drug prices in the US, through a combination of both direct and indirect effects. Even pharmaceutical companies based in Europe still use the US as the primary source of funding their research. Pharmaceutical companies reap their profits from the US because that's where it's easiest to do so, and because the US is the largest non-developing country. If, overnight, the US capped drug costs[0], a combination of two things would happen: pharmaceutical research would drop dramatically (some would move to China and India, but some would just exit the industry) and drug costs in other developing countries would skyrocket. Or in other words, for the US to pay less in drug costs, other developed countries have to be ready to pay more, and the world has to be ready to accept a decrease in medical research. > Furthermore, slightly less than 10% of all health-care spending in the US is on drugs. That doesn't contradict the original point; that's just looking at a different denominator. And again, this is all medical research, not just pharmaceuticals. [0] ignoring for the moment the mechanism of doing so