US pharmaceutical innovation in an international context

Abstract

Objectives: We explored whether the United States, which does not regulate pharmaceutical prices, is responsible for the development of a disproportionate share of the new molecular entities (NMEs; a drug that does not contain an active moiety previously approved by the Food and Drug Administration) produced worldwide.

Methods: We collected data on NMEs approved between 1992 and 2004 and assigned each NME to an inventor country. We examined the relation between the proportion of total NMEs developed in each country and the proportion of total prescription drug spending and gross domestic product (GDP) of each country represented.

Results: The United States accounted for 42% of prescription drug spending and 40% of the total GDP among innovator countries and was responsible for the development of 43.7% of the NMEs. The United Kingdom, Switzerland, and a few other countries innovated proportionally more than their contribution to GDP or prescription drug spending, whereas Japan, South Korea, and a few other countries innovated less.

Conclusions: Higher prescription drug spending in the United States does not disproportionately privilege domestic innovation, and many countries with drug price regulation were significant contributors to pharmaceutical innovation.

FIGURE 1

Source of pharmaceutical innovation classified by location of the company headquarters by (a) country of the inventor and (b) patent assignees: 1992–2004. Note. Data based on drugs approved between 1992 and 2004. The sample size was N = 346. Other includes Denmark, Spain, Norway, Austria, Korea, Czechoslovakia, and Australia. Percentages do not add up to 100% because of rounding,

FIGURE 2

Pharmaceutical patent assignees, by type of company: 1992–2004. Note. Data based on drugs approved between 1992 and 2004. The sample size was N = 346.

FIGURE 3

Pharmaceutical innovation as a function of gross domestic product (N = 288): 2000. Note. GDP = gross domestic product; NME = new molecular entity. Axes are on a log scale. The United States almost falls on the 45 degree line where contribution to GDP and NME development is roughly proportional. Countries above the line develop a higher percentage of drugs compared with their percentage contribution to GDP. For example, the United States accounted for 40% of the GDP among NME innovator countries and was responsible for the development of 43.7% of the NMEs. The UK contributed proportionally more NMEs than its national income would indicate, and Australia and Japan proportionally less.

FIGURE 4

Pharmaceutical innovation (development of NMEs) as a function of prescription drug spending (N = 288): 2000. Note. NME = new molecular entity. Axes are on a log scale. Countries above the line develop a higher percentage of drugs compared with their percentage contribution to prescription drug spending.