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Newsletter Article


How Well Is the Pharmaceutical Industry Performing?

Country Correspondent: Roosa Tikkanen

In 2017, health ministers from 35 high-income countries asked the Organisation for Economic Co-operation and Development (OECD) to investigate the performance of the pharmaceutical industry in terms of enhancing value for money for health systems. Its November 2018 analysis found the industry directly employs more than 1.2 million people, including nearly half a million in the U.S. Countries vary in terms of the proportion of their gross value added invested back into research and development (R&D), ranging from about 40 percent in Japan and the U.S. to one-quarter in Denmark. Over time, the productivity of R&D expenditures — measured as the amount spent per approved medicine — has declined internationally. The investigation also showed that new medicines are increasingly being developed for small patient populations, yet innovation is lacking in certain areas, including development of new antimicrobials and drugs for some rare diseases. The report also included several recommendations for how countries can work together to increase the value of pharmaceutical spending.

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