Securing the Benefits of Medical Innovation for Seniors: The Role of Prescription Drugs and Drug Coverage. The United States provides leadership in medical innovation


The United States plays a prominent role in the global development of new pharmaceuticals.

  • The U.S. leads the world in spending for research and development of new drugs and biologics. (Gambardella 2001)
  • The National Institutes of Health budget for Fiscal Year 2002 is $23.5 billion.
  • Six of the world’s top ten pharmaceutical companies are headquartered in the United States. (Gambardella 2001)
  • The Food and Drug Administration is recognized worldwide as setting the gold-standard for quality and timely review of new drugs and biologics.
  • As a result of investment in research and development, U.S. pharmaceutical companies lead the world in the introduction and sale of major innovative products.

National Institutes of Health Budget

National Institutes of Health Budget

Most of the basic research on new drugs is concentrated in a few areas of the world—namely the United States, Europe, and Japan. (United States International Trade Commission 2000) Clinical trials occur in almost every country. As reported by the United States International Trade Commission (USITC), the U.S. accounted for 45 percent of 152 globally-marketed products developed from 1975 to 1994; followed by the UK at 14 percent; Germany, 7 percent; Japan, 7 percent; and France, 3 percent. Therefore, in the past, the U.S. public and private sectors have shouldered much of the cost for research and development of new products.

Robust investment in research and development by the United States has resulted in U.S. dominance of global sales of new pharmaceuticals. In the 1990’s, sales of major innovative products by U.S. multinational pharmaceutical companies increased more significantly than those of their European counterparts. (Gambardella 2001) Specifically, the U.S. share of sales of new chemical entities (drugs whose active ingredients have not been previously approved for therapeutic use) launched during the 1990’s approached 70 percent. (Gambardella 2001) Moreover, in 1999, more than 80% of total sales of the world’s top 15 drugs were produced by U.S. companies. (Gambardella 2001)

Future innovations will continue to improve the health and lives of older Americans and revolutionize the treatment of chronic disease. However, since the development of new technologies may take years, continued investment in research and development is critical to ensure that new treatments are available to enrich the lives of tomorrow’s seniors. Both public and private sector efforts are required to maintain a full ‘pipeline’ of medical innovations.

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