The true cost to Europeans of their "free ride" on US pharma R&D: study

The conventional wisdom that underlies US government and business leaders' complaint that the USA shoulders the lion's share of global pharmaceutical R&D costs, from which Europeans profit by paying 25%-35% less for their medicines than Americans, is wrong, says a new report.

In fact, says the Bain & Co study, the social and economic costs to Europe make the situation anything but a "free ride" for Europe.

Europe spends 60% less per capita on medicines than the USA, a gap that has roughly doubled since 1992. If such spending had risen at the US rate, Europe would have spent an extra $160 billion in 2002 and $840 billion cumulatively, over the decade, the study estimates. Cost differences resulting from marketplace interventions, eg, fixed reimbursement prices in France, reference prices in Germany and profit limits in the UK, have helped the free rider model create direct, visible benefits for Europe in terms of lower per capita drug spending. However, it says, the costs to Europe are equally real. They include: