A total of 45 per cent of the new products were from US companies. Consider the example of France, which forces companies to agree to prices before they can sell new drugs. The Barral study found that country produced only 3 per cent of drugs between 1975-1994. But smaller companies did not have the same advantage. France has Genset, a genomics company, but it is no Celera.
Regulation forces another problem in Japan.
There, generous government reimbursements are made for new drugs but an annual step-down system imposes increasingly strong price restraints on older drugs. The result has been a lot of churning in the market - putting new labels on not very new medicine. Britain might seem to be an exception here. It does place some constraints on company profits. The argument is that having the government as a reliable customer also serves drug companies, by cushioning them against business-cycle shocks.