US is key – it’s the only litmus test for global pharma success.
Charles L. Hooper 22, president of Objective Insights; and David R. Henderson, senior economist with Stanford University’s Hoover Institution, 9-13-2022, “Expensive Prescription Drugs Are a Bargain”, WSJ, https://www.wsj.com/articles/expensive-medications-are-a-bargain-drug-cost-expense-inflation-reduction-act-brand-name-pharmaceutical-treatments-11663080540, BEJJP-ATJ [6-22-2023]
Virtually no products are more valuable than the modern medicines produced by the biopharmaceutical industry. They cure diseases and extend lives. We’ve all heard that Americans pay higher drug prices than people in other countries. That’s true, but only when comparing retail prices of brand-name drugs. Very few Americans pay retail prices; most pay a fraction—a copay dictated by their insurance plan. Most country-to-country comparisons also leave out generics. Nine of 10 prescriptions in the U.S. are filled with generic drugs priced lower than in most other countries.
In many countries, the government is the sole purchaser of pharmaceuticals. For a new drug to be used, the government must buy and distribute it. If the government declines, the drug won’t be available. These governments negotiate with a take-it-or-leave-it attitude. Drug companies often take it, because once research and development costs are covered, some money is better than no money.
Except in rare cases, pharmaceutical companies develop drugs for the U.S. market. For drugs that make it in America, potential sales in Europe, Japan, Canada, China and elsewhere are gravy. Drugs that can’t make it in the U.S. are scuttled. Probable success in America is a necessary and sufficient condition for the development of new drugs. There are four main reasons for this: