Almost all new drugs are developed for the U.S. market, no matter where the company’s headquarters are. Why? America is a large, rich country with an advanced medical system. America’s gross domestic product per capita is 65% higher than Britain’s, 57% higher than Germany’s and 87% higher than France’s. There are four Americans for every German and nine Americans for every Canadian. We have many wealthy people. The Food and Drug Administration, which moves slowly, is still often faster at approving new drugs than regulatory bodies in other countries. While far from a free market, our medical system is freer than in many other nations. Countries with single-payer systems often take one to two years to negotiate the price of a new drug. If a patent is granted for 20 years but the first 13 years are dedicated to development and approval, then only seven years of patent-protected sales remain. If two years are added to that timeline for reimbursement negotiations, the interval drops to five years.
If new drugs can make it in America, they are developed. If they can’t, they aren’t. Other countries are considered secondarily. They are the cherry on top; we’re the sundae.
This is from David R. Henderson and Charles L. Hooper, “Be Thankful for High Drug Prices,” Wall Street Journal, February 4, 2024 (February 5 print edition.) We closed the op/ed with a WSJ editor on Sunday, something I’ve never done before.
I’ll post the whole thing in early March.
I haven’t been posting as much in the last few days because once again, our electric power is out. We had huge winds that blew over big trees. Our electric power went out Sunday morning while we were closing the piece–thank goodness for modern technology in the form of a hot spot on my phone–and it won’t be back until Thursday evening. This time, though, we have a generator and it’s saving the food in our fridge–and providing some light.
Around the time we were closing the op/ed I saw a talk by Deirdre McCloskey that she gave in D.C. on Saturday. It contradicted what we wrote. I’ll post on her reasoning in the next few days.
UDPATE: Robyn Pennacchia, at The Wonkette, replies. YMMV.
