Investing In Research and Registering a Drug Are Independent Decisions

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Sunday, 30 June 2013 07:58

According to the New York Times drug companies are confused about how requirements for getting drugs approved affect the profitability of their investment decisions. In an article about efforts to increase disclosure of test results it told readers that European Union requirements for full disclosure of test results could discourage drug companies from investing in Europe.

"Others warned that such a policy could discourage drug companies from investing in Europe. 'If you, on the other hand, say, "You guys are bad actors, we want to cut your prices, we want to take your confidential data and share it with any one of your competitors," you don’t get the same feeling of encouragement.'"

The European Union rules would apply to drugs that are licensed in the EU regardless of where the research was done. Similarly, if research was done in Europe, but the drugs developed were not licensed there, then there would be no requirement that the drug companies disclose their test results.

The linking of investment location decisions to a requirement to disclose test results only makes sense as political blackmail. It has nothing to do with maximizing the companies' profitability. The NYT should have made this point more clearly to its readers.