Funding Health Care Innovation

Three posts have addressed challenges faced by the pharmaceutical industry (global intellectual property rights, drug development and management). While difficult, "big pharma" has always been resourceful. Rather than focus on efficiency by delivering a higher volume of old drugs at lower costs, "big pharma" has concentrated on higher impact through new discoveries. But, inequities have developed.

While benefitting from U.S.-funded pharmaceutical gains, the rest of the globe has not paid its fair share of the economic costs. Canada not only receives drugs from the U.S. at a lower cost than U.S. citizens, but has not invented one major drug since the government started providing health care in 1971. Much of their "efficient" health care system's ability to deliver quality is because of U.S. innovation and charity. Some facts from a recent article in the Economist point to such a dynamic in overall health care, not just pharmaceutical areas.

The U.S. spends 16% of GDP on health care, a percentage which is nearly twice the average of other developed countries. While this is large, the Economist also reports, "One survey of doctors published in Health Affairs claimed that eight of the ten most important medical breakthroughs of the past 30 years originated in America." It seems logical that higher costs and innovation would be linked.

However, those higher costs are becoming less manageable. As corporations reduce employee benefits, costs are shifted to the public sector. To thwart what appears to be a looming crisis, people are looking to cut costs. But that could be short-sighted. All agree that the U.S. system is responsible for a global increase in the quality of health care. Why not get other countries to pay more of their fair share rather than cut costs? Wouldn't this be a better long term solution? The answers may lie in better global intellectual property rights.