[Excerpt] “The pharmaceutical industry, a significant source of healthcare throughout the world, has several features that distinguish it from the rest of the health industry. In the last half-century, new technology, better technological know-how, and overall economic growth have led to widespread and rapid growth in the pharmaceutical sector. Advancements in pharmaceutical research and development have led to the production of drugs that can routinely combat afflictions that, only years ago, were untreatable or even fatal. Since 1970, the average share of Gross Domestic Product (GDP) on pharmaceutical goods has increased in most Organization for Economic Cooperation and Development (OECD) countries by approximately 50%, meaning that pharmaceutical expenditure has increased on average 1.5% more per year than GDP growth.
Given that access to health care is fundamental to developed society and that pharmaceutical goods are a significant source of healthcare, drugs should be accessible to everyone across the world. However, universal accessibility to drugs is not an easy feat. As nations work with their pharmaceutical industries to provide the best possible access to drugs, they must do so on limited budgets and while maintaining proper incentives for pharmaceutical companies to continue to innovate. These conflicting objectives are problems unique to the pharmaceutical industry and critical to its successful future.
In the European Union (EU), major steps are being made to balance these objectives through the establishment of a Single Market for Pharmaceuticals. As stated in a Commission Communication on the single market in pharmaceuticals, “The purpose of the completion of the Single Market in Pharmaceuticals is not just to provide an environment which is favorable for pharmaceutical innovation and industrial development, it is also to improve consumer choices in pharmaceuticals of the required quality, safety and efficacy, at an affordable cost.”
The aim of this note is to present an overview of the major factors that are currently shaping and effecting international trade in the international pharmaceutical industry, and of how these factors contribute to the EU's progression towards a single market. Through outlining the present status of the industry, we hope to facilitate the making of future decisions to reach a better balance between industry innovation and healthcare accessibility.”
Joan Costa-Font & Aaron Burakoff, An Overview of Progress in the International Regulation of the Pharmaceutical Industry, 1 Pierce L. Rev. 103 (2002), available at http://scholars.unh.edu/unh_lr/vol1/iss1/10