- Jun 24, 2004
Actually, it's European price controls that keep their prices low. Over the last decade, the European Pharmaceutical Industry has declined significantly relative to their American counterparts because of this. However, more recently most have been allocating greater and greater research budgets per annum to their US subsidiaries to avoid some of this. For most markets, it is no longer possible for European companies to design and sell within the EU due to the minimal returns, thus, not only has the US, by necessity, become a haven for US drug companies, but also European firms. There is a reason why European Pharmaceuticals now spend less than 50% of their R&D investment within Europe (and right now, no, it's not India).Originally posted by: StartingLine
This is one reason I think pharamaceutical companies charge so much in the US and charge so little overseas. They know that other countries will just find the chemical properties of their pills and develop them themselves if they charge high rates over there. So basically we produce the ground breaking medications, we have to pay the high prices while other countries get the drugs for dirt cheap because what can be done.
As far as drug patents go, between the US and the EU, they're moderated by the WTO such that they're not going to be stolen however, if a US firm were to not accept the price controls, or limit sales to a EU member country, they could make generics after WTO approval. While not specific to WTO control, you can look up the Bayer, France and Spain Adalat debacle.