[snippyhollow]

US firms are investing less in R&D relatively to their rank http://en.wikipedia.org/wiki/Pharmaceutical_industry#Market_... than their French/UK (publicly-funded healthcare) counterparts. The US are not "subsidizing it for poor countries" more than other rich countries.

The truth in the case you're making is not specific to healthcare and is that "research (private and public) of rich countries that can afford it" benefits poorer countries. So what, let's stop advancing science? We're all better off this way!

[forrestthewoods]

From that list 48.17% of all health care R&D spend is by US based companies. Sounds like the US is subsidizing the world to me.

[belorn]

It should also be mentioned (since we are talking about statistics here), that 1/3 of the total US medical research spending is from taxes (congress) and has been consistently been so for 20-30 years. That money has no connections with the current health care system, or insurance companies and is just pure tax money sent into research.

From those 1/3, about 95% of all core research is supported, and around 80% of all research into medical conditions that are life threatening.

Health care system, insurance companies and patents are for everything else...

*The 95% and 80% is number from a talk, and for the moment I can't find references. What I could find is statements about majority funding is used on basic research (http://jama.jamanetwork.com/article.aspx?articleid=205216 and http://www.nsf.gov/statistics/seind12/c5/c5s1.htm). In the future I will hold off on those number in comments until I got direct sources to use with them.

[kingkawn]

If true these stat provide a compelling point of argument for expanded government research funding and less protection for the private insurance system. Do you have a source for it?

[belorn]

Mostly those was taken from a talk, but here is the data I could find: (https://en.wikipedia.org/wiki/Nih): for the total % of funding and where that money come from. (http://report.nih.gov/categorical_spending.aspx): For different Categorization.

I would also add a bit old paper about cancer research (http://www.iom.edu/~/media/Files/Activity%20Files/Disease/NC...), through they include all various stages of development. They attribute a 31% to industry.

[criley]

I'd be interested as well, because if he's trying to label all NIH-bound funds as imperative to this process, I think he's overstating his case.

Yes, academic institutions do a lot of low level work that pharma companies build on top of, but you'd be surprised how often potential new molecular entities (truly new drugs) do not originate from government sponsored academic sources.

(However, the tools, understanding and/or methodologies that made that new NME possible did likely come from those labs!)

[belorn]

One can read the data in different ways, and I don't think anyone doubt that pharma companies do contribute to the investments into new medical innovations. One interpretation that I listen/read about is that NiH and pharma operate on different levels, and thus sadly, NiH's contribution tend to be forgotten because they aren't the people with that pop out the pills bought in the store, even if the pills would not have existed if it hadn't been for the NiH funded research that made the new innovation possible.

Then we add patents and insurance companies into the mix, and some people want to paint a picture how innovation gets created. My comment was thus mostly to inform that the largest single funder to medical research is not some for-profit company like Pfizer, but rather tax supported NiH.

[kingkawn]

"I don't think anyone doubt that pharma companies do contribute to the investments into new medical innovations."

Every aspect of this system has to be questioned relentlessly, because each of them requires huge investments of social and financial capital. I am happy to doubt the value of the private drug companies' contributions. Many of their discoveries are reformulations of older drugs meant to allow a repatenting and re-marketing of old ideas. Many of the new supposedly breakthrough drugs do not provide significant improvements in mortality, but do cost huge amounts of money so that they can recoup their investment.

There are of course important developments that come from everywhere, but the question is about signal to noise. If, as these statistics imply, you can show that the drugs and other changes in medical care that provide positive changes to quality of life and mortality are coming from government research significantly more so than other sources then why subsidize private research, why protect the private drug development system that results in outrageously priced drugs, why waste 2/3rds of research money to produce such a disproportionately small portion of the advancements in medical knowledge?

Again, I would like to see sources for the numbers, but regardless, there should be no assumptions made about the value of private or public investment because that's the way it has been.

[anoncow]

Would love a source on the 95% figure.

[alive-or-not]

Health care R&D is extremely expensive in US (insanely high executive salaries, "lobbing" expenses, etc.). US companies may spend as much as the rest of the world, but deliver a lot less innovation.

[adventured]

I don't see any evidence to support your very dramatic claim.

Quite the opposite. From early chemotherapy on to the human genome, stem cells, the Allen Brain Atlas, The Gates Foundation, modern biotechnology, organ regrowth, medical devices like the CT scanner (half invented in the US) or the da Vinci system of robotic surgery, etc etc etc the modern healthcare / pharma / biotech world owes a spectacularly massive debt to the US. To say nothing of the surrounding infrastructure everything requires related to technology from the microprocessor to the Internet. How much did that tech speed up R&D, try quantifying that little contribution.

[ewoodrich]

"The Human Genome Project (HGP) is an international scientific research project with a primary goal of determining the sequence of chemical base pairs which make up DNA, and of identifying and mapping the approximately 20,000–25,000 genes of the human genome from both a physical and functional standpoint.[1] The first official funding for the Project originated with the Department of Energy’s Office of Health and Environmental Research, headed by Charles DeLisi, and was in the Reagan Administration’s 1987 budget submission to the Congress.[2] It subsequently passed both Houses. The Project was planned for 15 years.[3] "

I don't see how the HGP was unrelated to government investment...

[streptomycin]

He didn't say it was unrelated to government involvement, he said it's one of many examples of how the US private sector has delivered innovation. See Celera's role in sequencing the human genome. http://en.wikipedia.org/wiki/Celera_Corporation "Celera's use of the shotgun strategy spurred the public HGP to change its own strategy, leading to a rapid acceleration of the public effort."

[omd]

Such a useless comment. Everything you mentioned was arrived at by research which everyone shared when the vast majority of the research was happening...

[analog]

And all of that surrounding infrastructure is reliant on Mathematics which didn't originate in the US.

[fredsanford]

Such a useless comment. Mathematics was arrived at by research which everyone shared when the vast majority of the research was happening...

[analog]

I'm not sure why it's useless. If you're going to account for value provided by external sources then account for all sources, not just the ones that support your argument.

[coldtea]

Or that US health research produces far less bang for the buck, because the companies can charge whatever they want, and the suckers (citizens) have to bend over and cough up the money.

[bergheim]

By that logic, you should add the population for the other countries and compare to the US, which is about 345m compared to the US, 315m - which doesn't sound like the US is "subsidizing the world" to me.. Although I guess a big chunk of that revenue probably comes from the US.

[forrestthewoods]

No you shouldn't. Your 345m is heavily weighted by Japan's 127m population which accounts for 2.3% of the research spend from the chart in question.

If you want to play that game then Japan is incredibly subsidized by the US and Europe, but that's not the question at hand. :)

[baldfat]

Only profitable drugs. Pediatric Cancer is not one of them so no new Chemotherapy in the US for over 20 years now and counting.

Also manufacturing is stupid also. Only one company makes Oxycodone (Pain Killer) there use to be two companies. Now the price has sky rocked and can be in short supply. So my son suffered for a few days due to not getting all the pills he needed. Great system.

[ofacup]

keep on believing. you're the defender of freedoms after all

[adventured]

That's embarrassing. What does your glib, mostly obnoxious comment have to do with anything factual? You hate America so much you can't even give it credit for positive things that are factually accurate?

[jezfromfuture]

Sorry but america does not subsidise the health systems of the world , it just sad to see you argue so much when in all actuality your being fleeced tax payer wise & health insurance wise . Your health service doesn't really seem like its there to help most just the rich people.

[ofacup]

i'm sorry, but i'm not embarrassed. please show me where your "mostly obnoxious comment" has anything to do with anyone. the usa does not subsidise world healthcare. get over yourself

[omd]

I knew it was just a matter of time before American xenophobia came to HN.

[geebee]

I believe that the thesis was that health care companies make heavy investments in R&D that are only profitable because of very high prices in the US, and that these innovations probably wouldn't be available at the lower cost in other other countries without this profit center.

That's just a thesis. It's an interesting one, I'd be interested in reading some discussion of it, especially insightful comments backed with data.

[joelthelion]

The French/UK/Swiss pharmas also count on the US market as a large part of their revenue. The incorporation country of these multinationals is irrelevant.

[hexagonc]

Whether the US is subsidizing healthcare for other countries is not a function of the amount of research US companies or the government produces. Instead, it depends on the amount of revenue that those companies derive from the US health consumers. I don't have any numbers in front of me but if it turns out that the vast majority of profits for these companies comes from the US, due to our clusterfuck of a healthcare system, and if those extra profits offset the lower revenue from charging other countries less, then that looks like an indirect US subsidy to me (sorry for the unwieldy sentence).

If you're not American, I don't see what there is to take offense at. That's just the shitty (for us) way that it is. Due to structural problems, greed, boondoggles, lack of political will, lobbying/corruption, the US simply can't have low drug prices compared to other rich and poor countries. On the other hand, the US enjoys relatively low prices for electronics and other consumer goods (as our Australian friends can attest to). You win some and you lose some.