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POINT/COUNTERPOINT //

Will Asia overtake the U.S. in biomedical research?

Point: We aren’t likely to be challenged anytime soon; Counterpoint: drug production will become globally dispersed.

Fall 2005
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Will Asia overtake the U.S. in biomedical research?

Philippe Weisbecker

John E. Calfee is an economist and resident scholar at the American Enterprise Institute in Washington, D.C., where he studies health-care policy and the pharmaceutical industry.

POINT: It’s true that, two decades ago, American scientists authored a majority of the papers published in physics journals, and today they account for less than a third. But a much more crucial yardstick of the globalization of scientific research—the development of high-risk, high-cost drugs—shows U.S. dominance continuing, and we aren’t likely to be challenged anytime soon. Our lead over Europe has increased in recent years, not shrunk, with several major European drug companies relocating at least some of their R&D operations to the U.S. And while China and India are becoming increasingly competitive, it will be a long time before they play a breakthrough role in drug development.

Our edge owes much to infrastructure. Not only do we spend more than any other nation on basic research, but we make it easier to move a good idea from academia to the for-profit sector. By one estimate, more than 1,200 technology companies have been spun off by current and former students and faculty of one West Coast university alone. Then there’s quality of life, a perk that helps attract and keep top researchers. While Europe compares favorably in this regard, China and India still have a long way to go. Finally, there’s a more entrepreneurial attitude in the U.S., and much more private risk capital. In 2004, U.S. venture capital firms poured $5.6 billion into almost 600 biotech and medical device companies. That’s about five times the amount of venture capital invested that year in all Indian industries.

In five or 10 years, serious drug development may begin in China and particularly in India. But even that will occur mainly around the edges. They’ll create variants of old drugs and new delivery systems—turning a four-times-a-day pill into a once a day. That’s useful, but nothing like the blockbuster innovations pouring out of U.S. pipelines—for example, the first antiangiogenic cancer drug, Genentech’s Avastin. This is a familiar pattern in technology. Just when it seems the laggards are catching up, a new direction is discovered—usually emerging from basic research—and the countries with the best infrastructure leap ahead once more.

Ultimately, the globalization of biomedical research will be a win-win situation. More research will get done more efficiently, and more drugs will be developed. There may be greater competition for high-tech jobs, but the demand for medical technology is virtually unlimited—the market will expand so much that there will be plenty of room for everybody.

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