This weekend there was an interesting article in the International Herald Tribune by James Kanter and Carter Dougherty, on pharmaceutical research in Europe versus the US. I've written on this topic myself, pointing out that most European companies, when they're expanding at all, are doing so in the US rather than in their own countries.
Having pharmaceutical sales in the US is essential, since we still have the least-regulated pricing of any major market. This, for better or worse, is where you come to make up for the price controls in Europe, and the article points out that the European governments like to talk about being world leaders in innovation while simultaneously clamping down on the rewards for it. But why would you need to do the research here as well? Kanter and Dougherty:
"Although the knowledge created by pharmaceutical research eventually spreads across borders, companies have learned that it pays to start in America. Setting up there gives companies with new products a substantial home market, without having to recruit a multilingual, European sales team, or to navigate the patchwork quilt of national rules on marketing and pricing in Europe. Being close to important U.S. medical professionals and other opinion makers from an early stage also helps smooth clinical trials. The United States produces, by volume, far more new drugs than Europe because U.S. research spending exceeds that in Europe by roughly 50 percent, said (Charles) Beever, of Booz Allen Hamilton."
And if you're starting up a small pharma or biotech company, it's easier to do it over here:
"In Europe, where capital is harder to raise and investors less willing to go out on a limb, the story can be getting financing at all. Investors sank $114 billion into U.S.-based companies that pioneered novel drugs over the past decade. Companies clustered around European biotechnology hubs, like Cambridge, England, and Uppsala, Sweden, garnered barely a quarter of that amount over the same period, although some industry leaders have raised substantial funds. The lack of a single European stock exchange and the persistence of a risk-averse investment culture have played a critical role in America's ability to steal a march on Europe, said Sam Fazeli, biotechnology industry analyst at Nomura International in London.
"Unfortunately in Europe, we are only just coming to terms with the fact that drug failures are part and parcel of the life of a biotech company," he said."
Hey, if we want to get technical about it, failure itself is part and parcel of doing any kind of research. And that brings up another reason I think that R&D tends to thrive more over here: by the standards of many Europeans, Americans are not completely sane. I've worked in Europe and with many colleagues from France, Germany, and Italy, and I really believe this. (Some of them have told me as much after they got to know me well.)
In the US, we tend to give chances to wilder ideas than in many other countries, and there's less stigma attached to their failure. That's a little-appreciated feature of scientific progress: it depends on the willingness to look like an idiot. Keep in mind, most of the paradigm-breaking new schemes that people dream up just don't work. You have to be ready to risk your time, your effort, your money and your reputation to get anything big to happen, and that (for many reasons) is just plain easier to do here.