High health care spending is yet another way the US subsidizes other countries. From the article:
"This is a good deal for residents of other countries, as our high spending makes medical innovations more profitable. “We end up with the benefits of your investment,” Sackville says. “You’re subsidizing the rest of the world by doing the front-end research.”
In the past 30 years have you heard of any medical innovation or drugs coming from anywhere other than the US?
"In the past 30 years have you heard of any medical innovation or drugs coming from anywhere other than the US?"
Of course there is plenty of good medical stuff coming from many countries other than the USA. The market for medical care world wide is way larger outside the USA too. Finally, much medical research is multi national and collaborative.
A fact I find distressing is that the poster is largely correct. Somewhere around 70% of biomedical R&D is done in the US, the utter dominance of the US in this market is not controversial. Most of the rest is done in Asia. The biomedical R&D done in Europe is rapidly approaching a rounding error. I, for one, do not like the fact that the entire world is dependent on the biomedical R&D of US companies. Yet that is the current state of affairs. And the private companies in the US spend money on this research that dwarfs what all but a few countries spend.
I wish more people would acknowledge this reality. I like biomedical technology advancement. Most of it is developed in the US because it is the one of the few countries that can absorb the cost of the R&D. If the US stops doing it, who is going to pick it up? There is ample evidence that the answer is "a little bit in Asia and nowhere else". That should be frightening to people. Biomedical R&D is important.
Ignore for the moment that the US healthcare system is a wreck. The fact remains that the majority of biomedical advances come out of the US because it is the only country where people absorb the R&D cost. If Europe was pulling its weight with biomedical R&D it would be one thing but in practice it is producing so little in that regard that it is kind of shameful. If we eliminate US biomedical R&D by eliminating their ability to recover costs, who picks up the slack? There are no easy answers.
Bullshit. Show me where you get this 70% figure from? Are you talking about spending or results? I think you pulled it out of your arse, but would love to know. What I found was, European r&d spending is close to what the USA spends. Individual countries spend more as a percentage of GDP than USA. World wide, USA does not appear to be spending anywhere close to 70% of the total on medical r&d.
* 2011 Nobel prize for medicine went to an international crew (2 from europe, 1 USA)
* 2010 Nobel prize for medicine went to a British man.
* 2009 2 women from the USA, and one man from UK.
* 2008 1 german man, 1 french woman, 1 french man.
Anyway, medical care isn't just about what drugs multi national companies produce (with much funding from Asia and actual research done in Asia and sales done in USA+worldwide). It includes things like reducing obesity, stopping people smoking in bars, and providing good medical care for all people - which reduces sickness spreading. It does take research, and development to figure these things out and implement them on a social level successfully. Many of these things are classed as social science, and not included in R&D in many places. They can't even get R&D funding for this stuff in some places because it is not real science apparently.
Tax credits for r&d also distort the real costs. The UK gives 225% r&d tax credits, and Australia gives 175% tax credits of the cost now(USA has them too, but lower). This means you make money purely from just doing the R&D without worrying about the results.
btw, the USA is massively in debt, and over 22% of US companies being foreign controlled. So even if the US companies were contributing that much R&D, shouldn't that proportion be attributed somewhat to other countries? With all the funding into the USA also coming from other countries, shouldn't some of that be counted towards the other countries? Shouldn't the fact that lots of the workers in R&D labs for US companies have been outsourced to other countries count towards those countries?
The Nobel Prize is for basic research. Once you've done the basic research, you're still looking at spending huge amounts of money, on the order of a billion dollars, and spending 15 years bringing it to market. The drug industry is in trouble even as it is, and obviously they would be in worse trouble if they had to sell as cheaply in the US as they do in the rest of the world.
>So even if the US companies were contributing that much R&D, shouldn't that proportion be attributed somewhat to other countries?
No, at least not for that reason. The important thing is not where the innovator is located, but what market they target.
the entire world is dependent on the biomedical R&D of US companies
Inasmuch as it is possible for companies of this size to be from any one particularly country, large American pharmaceutical companies spent $27bn on R&D in 2009, while European ones spent €28.5bn (i.e. 40% more at today's exchange rate.)
That list does not show where the money is being spent by each organization. Instead it only maps the expenditure to the lcoation of a corporations headquarters.
Better statistics are provided elsewhere in wiki, for instance US R&D expenditure dwarfs that of any other country. It is also about 33% higher than that of the combined total of EU countries.
That list does not show where the money is being spent by each organization.
This is irrelevant to the claim I was debunking.
True, the great grand-parent post appears to be conflating where the research was done with the nationality of the company funding the research, and I admit that I only responded to one half of the argument, but that was purely because it was the easiest to fact-check. That doesn't make the other half of the argument true.
Specifically, consider Bayer. This is listed as a German pharmaceutical company.
"American" pharmaceutical companies also have employees in Europe, Asia, and elsewhere.
Better statistics are provided elsewhere in wiki, for instance US R&D expenditure dwarfs that of any other country.
Including, say, military and aerospace R&D with healthcare R&D to try and make a point about just healthcare is clearly ridiculous.
In the past 30 years have you heard of any medical innovation or drugs coming from anywhere other than the US?
Of course the MRI machine was itself invented in the US
I have no way of judging the value of their respective contributions to the field, but I do know that the Nobel prize for magnetic resonance imaging didn't even go to Damadian, but was instead shared by a different American and a Brit. http://en.wikipedia.org/wiki/List_of_Nobel_laureates_in_Phys... (2003)
The development of the MRI machine falls a little outside this 30 year window, but at almost exactly the same time that IVF was being developed in the UK. http://en.wikipedia.org/wiki/Louise_Brown
> High health care spending is yet another way the US subsidizes other countries.
Look at the US's trade deficit and dollar devaluations of the past 50 years to see who is subsidizing who. But that's beside the point.
Look at it less nationalistic and rather as corporations vs. consumers. American consumers are "subsidizing" large corporations in an oligopolic market.
Your 50 years is a radical exaggeration. America had a budget surplus and stable dollar 12 / 13 years ago. Which is why gold was $270x / ounce, and oil was $12 to $20 and gasoline was still $1.
Trade deficits are mostly irrelevant so long as you aren't accumulating debt, and your domestic economy is highly productive.
I run a huge trade deficit with Amazon.com for example, as do all of their customers. That's ok because I'm being productive elsewhere, and the profits I'm generating through work make it possible to run that deficit. The same concept works at a macro economic level.
America ran trade deficits during almost the entire 19th century. There was more money (eg British investment) and goods flowing in, than out. The huge profits being generated domestically by the productivity gains, made it possible to finance that deficit without debt accumulation.
Gov't budget and import/export of currency has nothing to do with each other.
Current account deficit is what I wanted to type, not only trade. It works like this since Bretton Woods (okay, 40 years ago): US has current account deficit, that means that US dolars (or bonds in USD) are collected by other countries, and the US receives physical values (traded goods, raw materials, etc.) in return. When the USD loses value vs other currencies, the other countries posess now less value, because the USD they own is worth less physical stuff/other currencies.
The US is trying hard to do the same thing with China currently, since China has bunkered some 3 trillion USD. Devalue the USD a few percent vs the Renminbi and the US has saved a lot of value it would otherwise have to "pay back" to China some day.
Its a good thing to run the leading international currency (ie the USD) because of the implicit value transfer to your own country.
Medical research spending in the US is approximately $500/person/year. The medical cost gap between the US and other countries is approximately $3,500/person/year. R&D spending simply does not account for for anything close to the huge discrepancy in costs.
You're missing the point. High prices for drugs, procedures, and medical devices in the United States are what makes their development financially feasible. Without the American market, the expected payoff to new medical technologies would be much lower, so it's reasonable to believe that fewer would be commercialized.
Americans bear the bulk of these costs, which are passed along in the price of their treatments, because much of the rest of the world has instituted price caps that are too low to cover the full cost of R&D, from basic science to a product approved for sale. (These treatments are nevertheless available in other countries because the marginal cost of synthesizing a pill or building a device that's already been developed is low.) It's a classic free-rider problem.
Gotta love the level of idiocy in this entire thread. Americans are being really (and irrationally) delusional here, without any data to back up anything being said.
It really amazes me how there are controversial topics where one side never presents any actual facts or figures to back up their stance. I would think that, in the absence of any hard evidence, the controversy would disappear. Yet it seems that anecdote and rhetoric alone are enough to sustain extreme controversy. Both health care and climate change in the US are excellent examples of this.
Edit: the statement about R&D costs is one excellent example of this. This thread is not the first place I've heard it, by any means. It's inevitably framed as the US subsidizing the rest of the world but without any quantitative analysis of it. The assertion evaporates when you actually look at the numbers, of course. Another excellent example was when my father claimed, no doubt prompted by right-wing talk radio, that the life expectancy gap was driven by the much higher murder rate in the US compared to European countries. Upon plugging in the numbers, I found that, assuming an absolute worst case (every murdered American is an infant, losing all ~80 years of life), dropping the US murder rate to zero would increase American life expectancy by six months.
I get how people can be wrong sometimes, but the way it spreads, the way people hear things and never check them or even apply a basic smell test, and the way these complete falsehoods manage to shape national debate is just crazy.
Medical R&D in the US amounts to about $100 billion/year. (I misremembered a slightly higher number previously, but the ballpark is the same.) Meanwhile, the US is spending in the neighborhood of $1 trillion/year more on health care than if spending were on the same level as a typical European country. Yes, I understand that those R&D costs get baked into medical costs, but they simply don't account for the vast majority of the discrepancy.
If the US system cost the same as a typical European system with the exception of US R&D spending on top, the discrepancy would only be around 10% of what it actually is.
> In the past 30 years have you heard of any medical innovation or drugs coming from anywhere other than the US?
Er, yes, _many_. See some of the recent work in HIV and cancer drugs, for instance, along with many more conventional drugs. It _is_ true that pharmaceutical companies (most of which are, these days, highly multinational) derive a lot of their profit from the US market, but they spend a lot there too; the industry spends more on marketing than research, and this is disproportionately targeted at the US, as it's one of the few countries where one may advertise prescription drugs directly at the general public.
> Of course the MRI machine was itself invented in the US
Hmm? Very arguable, that one. While its medical application seems to have been the product of an American academic (note, academic, not medical device company employee), NMR imaging (renamed MRI for medical purposes, presumably due to the unpopular word 'nuclear' in the original), was previously made feasible through work at the University of Nottingham, in the UK.
Like many inventions which came as a series of parts, it's rather hard to point and say 'Mr X invented this'; there are at least two American contenders, one British, and one Soviet.
"In the past 30 years have you heard of any medical innovation or drugs coming from anywhere other than the US?"
I know I'm falling for a troll, but even if that number was right, what would be the number removing drugs for mostly purely American issues (drugs for dubious illness like ADHD), drugs for American lifestyle issues like obesity and its consequences (diabete, impotence...)
If your are looking at cure for e.g. pandemics the picture is very different, with Europe very present and emergent economies tackling problems deemed non-economically viable by American companies (e.g. various mosquitoes born disease).
"This is a good deal for residents of other countries, as our high spending makes medical innovations more profitable. “We end up with the benefits of your investment,” Sackville says. “You’re subsidizing the rest of the world by doing the front-end research.”
In the past 30 years have you heard of any medical innovation or drugs coming from anywhere other than the US?
Of course the MRI machine was itself invented in the US: http://web.mit.edu/invent/a-winners/a-damadian.html
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