A commonly-encountered right-wing argument is that the U.S. healthcare system generates a uniquely high amount of innovation. Conservatives also argue that the United States largely pays for the research and development that the rest of the world benefits from. Another related argument is that the United States, in one way or another, subsidizes the healthcare systems of other countries around the world. Despite the fact that conservatives confidently make these arguments as if they're established, basic truths about the way that the world is, these arguments are actually flawed in so many different ways that it's almost impressive.
Let's start off with an example of Steven Crowder making this argument. In a video where he thinks he's offering a brilliant rebuttal to Vox on healthcare, he argues the following:
"The only reason that other countries can price-fix on drugs is because of places that don't, allowing for the innovation and creation of new drugs. Let's say the government said 'Hey, hey, hey, listen, ok, alright: the price that people are gonna pay for your new cancer treatment, it's gonna be 100 bucks. That's it. You can't charge more,' 'But it cost billions of dollars to create?' 'Don't care! That's the cost! That's the offer you can't refuse.'
Guess what? The companies that create research, the companies that innovate, they're going to create zero new cancer treatments. There's no incentive. So we burden the cost, the private sector burdens the cost, and then these other countries piggy-back off of them and provide it at a subsidized rate. That doesn't mean that somewhere down the line, somebody didn't invest in creating new, better healthcare! You need that to keep this afloat, just like you need the United States military to keep Canada from being invaded from, I don't know, anyone!"
Crowder frames it as if companies are producing and selling drugs at a financial loss to countries with price regulation strategies—and this is complete nonsense. Companies are still making a profit when they sell to these countries—they're simply profiting less than they do in the United States, where they can jack the price up and charge obscene amounts.
Crowder's argument makes no theoretical sense: If these companies weren't making profits—or were even selling at a loss in these countries—why would they continue to produce these drugs and sell them to these countries? Purely out of the generosity of their hearts? Is this just corporate philanthropy on steroids? No, obviously they're selling to these countries to make money, so when Crowder argues that price regulation removes the incentive to produce new treatments and medications, he is simply mistaken.
He says countries that regulate prices provide these treatments and medications at a "subsidized rate." Yeah, more like at a reasonable rate. As is so often the case, right-wingers have it completely backwards on this issue: The United States is actually the outlier here—not these other countries. It is these other countries that have a sane pricing policy, and the policy in the United States is the ridiculous one.
As we read on DrugWatch.org,
". . . an IHS Markit report revealed drugs sold in the U.S. cost an average of 56 percent less in other high-income countries. Prices 'range from being one-third of the price in France to being just under two-thirds of the price in Japan.'"
And here we see the percentage saved on prescription drugs—relative to that spent in the United States—in a variety of countries which have more progressive healthcare systems. As we can see, the United States outspends these countries by a long shot. Why is this the case? Largely because pharmaceutical companies can get away with it in this country because our laws allow for it.
And the thing about health care is that people don't have a choice: If a company tries to charge $10,000 for a TV or that fancy new dildo you've been looking at for a while, you can just be like "Fuck you, I'm not gonna pay that much! I don't need your stupid TV anyway!", and you can just go home and that's the end of it. But if they charge $10,000 for a month's supply of the medication that you need to prevent you from dying or suffering, you don't have a choice in the matter; your only choice is to either buy the medication or suffer and die.
"Hey, that's freedom, baby! I can practically feel the liberty coursing through my diseased veins! *coughs disgustingly*"
This is why it's so stupid when right-wingers talk about healthcare as if it's just another shiny commodity: "furniture, television, healthcare, it's all the same stuff!" No, it's not the same stuff, and the same economic rules do not apply. The technical way to phrase this in economic terms is to say that healthcare demand is inelastic: that is to say, demand stays the same regardless of whether the price increases or decreases. This is why it makes both economic and moral sense to implement price regulation strategies: If you don't do this, the profit-driven companies will jack up the prices because they can do this and people will have to keep paying for these medications and treatments.
The pharmaceutical industry is unique in another sense. As Anna Zaret and Grace Lee describe on The Source Blog,
"It is extremely expensive to develop new drugs. The estimated cost to get one drug to market successfully is now more than $2.8 billion. These high fixed costs create barriers to entry, making it challenging and time consuming for competitors to enter the market. Because of these barriers to entry, existing pharmaceutical companies have the ability [to] set and maintain high prices for their products, because it will take time for another competitor to enter the market, compete, and drive down prices."
Add to that patent guarantees which ensure that only one company can sell a drug for up to 20 years, and what you have is inelastic demand for essential drugs paired with either a very small number of sellers or even just a single seller. This is a recipe for very high prices if you don't step in and regulate this space. The healthcare industry is a very unique one, and that's why we need to take the unique approach of regulating the prices.
Obviously you don't want to make the prices so low that the companies aren't getting a return on their investment, but everybody knows this—especially the healthcare regulators who specialize in this area. As if they need somebody like Steven Crowder to point this out to them!:
"Hey, make sure you don't bankrupt these companies by charging too much."
"Awh, dude! Great point! We totally would not have taken into consideration the most basic functional requirements of a business if you didn't just point this out to us right now!"
No, they'd be like: "Get this idiot out of here! We're trying to talk serious policy right now."
What they do in these countries is strike a reasonable balance between allowing the companies to profit without charging obscene amounts. As Keyhani et al describe, price regulation strategies include "(1) direct control of prices, (2) reference pricing and generic substitution, and (3) profit control."
So the framing that right-wingers put on this issue is all wrong. They portray it as if the prices charged in the United States are the normal prices, or the sensible prices, and any prices lower than this are the "subsidized" prices. In reality, what we have are exorbitant prices in the U.S., and reasonable prices in the other countries.
I also just don't understand the grammar of describing this as a "subsidy." A subsidy is basically financial aid of one sort or another: "We're going to give you taxpayer dollars to conduct your research; you're going to pay less in taxes because your industry is valuable." Those are subsidies, and that is not what's going on here.
What's going on is these companies are trying to sell drugs in these countries, and these countries are simply saying: "Here are the prerequisities to selling in our country." It's much more like a pre-sale negotation than it is a subsidy, so unless I'm missing something here, I think conservatives are completely misusing this word. This strikes me as nothing more than a crude, bungled attempt at using this term for propaganda purposes.
Nicholas Grossman makes a similar point on ArcDigital.Media. As he writes,
"With other advanced economies clamping down on the profit motive, the United States effectively subsidizes research and development of drugs and medical devices for the rest of the world."
Ryan Huber, also on ArcDigital, elaborates further on this point:
". . . our health care market is relatively freer and more dynamic than those of other developed countries. This leads to a high rate of medical and pharmaceutical innovation that ends up benefiting the rest of the world, particularly other rich countries, in a similar way that NATO nations, for example, benefit from close military alliance with the United States. In short and somewhat reductive terms: we spend more money so everyone else can be healthier."
The argument is a bit confusing, so let me try to spell out their position in plain English: Because we spend so much on healthcare in this country, we contribute a very large share of these companies' income, and we're thus supplying them with much of the revenue that they ultimately use for R&D. It is in that sense that we're subsidizing the R&D that the rest of the world benefits from.
Is there anything to this argument, and are the high rates spent in the U.S. necessary to fund these companies R&D budgets? Well this is a claim that was tested in a 2017 Health Affairs publication written by Nancy Yu et al. As they write,
". . . the pharmaceutical industry often explains that the higher prices they charge in the US provide them with the funds they need to conduct their high-risk research. This claim . . . is empirically testable. . . . We focused our analysis on the 15 drug companies that manufactured the 20 top-selling drugs globally for 2015. . . . Non-US prices came from four countries with reliable and publicly available pricing: Canada, Denmark, Ireland, and the United Kingdom (UK).
. . . Overall in 2015 the premium earned by US net prices exceeding other countries’ list prices generated $116 billion, while that year the companies spent just 66 percent of that amount, or $76 billion, on their global R&D.
. . . We found that the premiums pharmaceutical companies earn from charging substantially higher prices for their medications in the US compared to other Western countries generates substantially more than the companies spend globally on their research and development. This finding counters the claim that the higher prices paid by US patients and taxpayers are necessary to fund research and development. Rather, there are billions of dollars left over even after worldwide research budgets are covered."
Well, that about settles it! But just for good measure, let's look at some more data on this question, courtesy of the organization Public Citizen. As we can see here, pharmaceutical industry profits in 2015 were $125 billion, compared to R&D costs of $93 billion. They make more in profit than they even spend on R&D. (By the way, don't make the mistake of subtracting R&D costs from their profits, because R&D is obviously a business-operating expense, and profits are what come after expenses are paid.)
This data proves two things: number one, prices could be reduced significantly in the United States, and these companies would still be able to fund their R&D and make a hefty profit. The second thing this data proves is that profit seems to be a higher priority to these companies than increasing R&D funding. Again, I am not opposed to these companies making a profit, but when you're making more in profits than you're even spending on R&D, don't try to tell me that the high prices we see are necessary for the very survival of your business.
Pharmaceutical industry propaganda would have you believe that these companies are just barely hanging on by a thread in their selfless struggle to provide affordable medication to the world; in reality, healthcare executives are getting sucked off in their private jets while laughing all the way to the bank and wiping away the tears of joy with hundred dollar bills.
It's one thing to see Big Pharma make this argument, but when conservatives make it, they become nothing more than useful idiots for the very pharmaceutical industry that's screwing them over: "Oh, the world should just be so grateful that these magnanimous corporations are profiting stupendously on the backs of the sick and dying in America. I think a little 'thank you' is in order. Now if you'll excuse me, I need to get back to starting a GoFundMe campaign just so I can pay my healthcare bills!"
If this is the logic that they're using on the right-wing—where it's a selfless favor to the rest of the world to pay excessively high amounts for healthcare—why not increase all pharmaceutical prices by 10,000x? Wouldn't this just make us even more generous? Wouldn't enacting a policy like this mean that we're really subsidizing R&D? If more healthcare industry profits are the desirable outcome, why not move as far in this direction as we possibly can?
If you think that's a ridiculous proposal, there's a good reason why you think that, and that's because there's an obvious balance that needs to be struck between access to healthcare and industry profits. And in the non-competitive, inelastic market that is the healthcare industry, it should be up to regulators to come up with reasonable prices—not the profit-driven companies.
I came across a YouTube comment on that Crowder video posted by Jeff Hyson who makes the following great point:
"No one is going to stop innovating because their profit margins decrease a little bit. If anything, they'll need to be more innovative."
I think this is actually a really good point: If you can sell your products and make huge profits, you're not going to be under the same financial pressure to innovate and boost your sales as you would if your profit margins were lower.
Ask any business owner and they will tell you that when money is tight, that's when they need to get creative; that's when they need to step their game up and work harder; that's when they need to improve the quality of their products or services in order to generate more business. If the money is just flowing in effortlessly, you won't have the same incentive to think outside of the box in order to boost sales.
So, yes, while profits do enable R&D and the expansion and improvement of business, I think you could argue that effortlessly earning gigantic profits won't incentivize the same kind of innovation as slimmer profits would. As the saying goes, necessity is the mother of invention.
Another branch of this argument is the military aspect of it. Sometimes this is brought up simply as an analogy for what happens in the healthcare industry; other times, people bring up military spending as something that actually contributes to the healthcare industries of other countries.
Steven Crowder, in his video on healthcare, argued the following:
"The United States total cost of healthcare, total spending on healthcare . . . it's very different from New Zealand or Portugal or Norway. Also, by the way, do you know why it's different? . . . Because military! Because Sweden, on that map, they need our military to protect them from anybody! Everyone on that map benefits from the United States military! That's why they don't pay for their own military. So they can piggyback off of all the innovation and great cool stuff that we use, that's us. The land of cool stuff. You're welcome."
I really tried my best to follow and understand this argument, but I genuinely think that it's just an incoherent pile of trash.
Before we get into it, notice that Crowder euphemistically describes healthcare spending in these countries as merely "different" from what's being spent in the United States. "Oh, they're just spending different amounts in these countries." No, what they're spending is dramatically less in these countries. Let's be clear about our language and let's not shamefully tapdance around any uncomfortable facts.
His argument is that the total spending on healthcare in these other countries is lower because of military spending. This strikes me as a complete non-sequitur. How is military spending connected to healthcare spending? These are two completely separate components of government.
The only way that we could make sense of this argument would be if it went as follows: These countries spend less on their military; therefore, they can afford to spend more on healthcare. This would actually make logical sense. But this is not what happens in reality. The reality of the situation is that these countries spend less on healthcare than we do in the United States. Look at this data from The Commonwealth Fund; what we see is that these countries with universal healthcare systems spend about as half as much, on average, per capita on healthcare as we do in the United States.
Look at this data and then try to fit it within this military argument: These countries spend less on healthcare because they spend less on military? This is a nonsensical statement. There is no logical connection here between these two components of spending; there's no process by which less military spending translates into less healthcare spending, as well. So unless I'm missing something here, Crowder's argument has no connection to reality and doesn't even make logical sense.
Other confused conservatives appear to be simply parroting one another when they make this same non-argument. As Michael Dario Pellittieri so eloquently puts it in a YouTube comment on my Ben Shapiro healthcare video:
"Hey like commi3 Libtard moron since ur to autistic to notice ...ur not forgetting most of the countries u mentioned are either/and/or smaller ...having there military paid for by us"
Jesus Christ, and I'm the moron here? What's especially funny about this comment is that this guy took the time to edit it. So not only did he post this typo-ridden garbage, but he looked it over, made some revisions, and then he was like: "Yep! That looks good to me!" This guy needs to either gets his eyes examined, his brain examined, or he needs to just smash his internet router with a sledgehammer so we never again have to experience the agony of reading his YouTube comments.
Jacob Britton made the same point in another comment (although unfortunately, he didn't use the same Shakespearean prose that Michael did):
"Scandinavian countries have their military budgets subsidized by the US via the UN"
Ok, so what? What does this have to do with their healthcare spending? Because these countries spend less than we do, per capita, on healthcare, their military spending is not relevant—and this argument therefore falls flat.
And this is just a side point, but I think it's hilariously silly to argue, as Crowder did, that if the United States reduced its military spending, countries like Sweden would be at serious, imminent risk of being invaded by some other country. Get fucking real, dude. Most of the countries in this region are allies, so somebody please tell me which specific country you think has a high probability of invading Sweden if the U.S. cuts its military spending. Whatever Steven Crowder is smoking must be some really good shit.
Let's now switch gears and focus on the claim that the United States healthcare system is uniquely innovative. You'd think that if this was true, you could measure this in some way and empirically demonstrate it. Steven Crowder purports to do precisely this in his video when he argues the following:
"Or did maybe many of those procedures or drugs get invented in the private sector? The United States leads in . . . the creation of new drugs and publications of medical research!"
As he says this, they show, on the screen, a table that was provided in a Milken Institute publication showing data on the creation of new drugs in various countries.
Paul Howard makes the same argument and cites the same data in an article for Forbes:
"The imposition of a number of drug price controls or their functional equivalents in the E.U. – reference pricing, capped drug budgets, health technology assessments, and the like – have all helped shift the epicenter of drug innovation from the E.U. to the U.S. . . . from the 1980s to today."
So does this data, indeed, prove their case? In this table, The Milken Institute compares the percent of new chemical entitites—basically, new drugs—created in the United States versus those produced in France, Germany, Japan, Switzerland, and the United Kingdom. It appears to give the impression that the United States is an innovative powerhouse, but something should jump out at you, and that's the fact that population differences between these countries aren't accounted for.
Whenever you're making comparisons between countries, it is absolutely essential that you're making per capita comparisons. If you're just looking at the raw totals, this can give the misimpression that one country excels in this area when, in reality, the explanation could simply be that their population is larger—and the style of that country's healthcare system could have nothing to do with it.
If your population is 10x the size of another country, you would expect to have 10x more people working in the healthcare industry, on average, and thus, all things being equal, you'd expect to see 10x the amount of new drugs being produced. And the United States, of course, has a much larger population than these other countries, so if you're not talking about per capita data, you're just not talking seriously about the issue.
Here's what I did to provide us with data on this question that's actually informative: Using statistics provided by Data.WorldBank.org, I totaled up the GDP and the populations for these countries, calculated each country's respective percentages in these two areas, and I then compared these percentages against the percent of new drugs produced in each country.
Here's how to interpret this data: Basically, if the percentage of NCEs produced is higher than that country's GDP and population percentage, they can be classified as more innovative, because they're producing a larger share of new pharmaceuticals, per capita; conversely, if the NCE percentages—the numbers in blue—are lower than the GDP and population percentage, then we can classify the country as less innovative, because that country is producing fewer new pharmaceuticals, per capita.
Let's first look at the United States. As we can see, in 1980, 90, and 2000, the United States' share of NCEs produced was actually substantially lower than both its share of GDP and population: about 12%, 11%, and 6% lower, respectively. So historically, the United States has actually been underperforming in terms of pharmaceutical innovation!
Only by the year 2010 did the United States' NCE percentage surpass both the GDP and population by about 9%. So Crowder is actually presenting us with an inverted and misleading interpretation of this data: What's portrayed as U.S. dominance is actually the United States struggling to catch up with these other countries—only in the most recent years slightly surpassing them!
Let's now take a look at the average of these other five countries: In 1980, 90, and 2000, the percent of NCEs produced was higher than both the GDP and population percentages. That is to say, these countries have been more innovative, historically, than the United States. Even in the year 2010, the percent of NCEs produced still matches up with their percent of the GDP and population, so these countries have been doing—and continue to do—just fine in terms of pharmaceutical innovation. Any argument that these countries aren't sufficiently contributing to this area, while the United States is picking up all the slack, is simply not in agreement with the data.
How do these other countries perform, individually? The U.K., with its public system, lagged behind in 1980 and 90, although since 2000 and 2010, their share of NCEs, at 16%, has surpassed their share of the GDP and population, at 8 and 10%, respectively. This is a country with a single-payer healthcare system that heavily regulates pharmaceutical prices, and as we can see, it's been very innovative in recent years.
If there's one country on the list which has most consistently been a hotbed of pharmaceutical innovation, that country is Switzerland, with its heavily-regulated private healthcare system: As we can see, in all four time periods, their share of NCEs produced has been about 5–10x more than their share of the GDP and population.
The three countries whose healthcare systems are a public-private blend—France, Germany, and Japan—have performed about average, historically, sometimes being below or above average in innovation, depending upon the years—although since 2010, all three have been below average.
The big picture conclusion that we can reach from this data is that—contrary to what conservatives argue—the United States has historically been below average in innovation, only recently earning the classification of above average. By comparison, the other countries, considered collectively, have historically been above average, whereas recently, they're simply average in innovation. There are two different worldviews on offer here: the one that's presented to us by conservatives, and the one that's actually supported by the data. And note that these are the conclusions reached from the very set of data that conservatives choose to best make their case.
I will concede, however, that the pharmaceutical industry in the US is uniquely innovative in one sense: Whether we're talking about 5000% price increases or competition-reducing company mergers, they seem to just keep coming up with brilliant new ways to screw us over in this country!
Something that needs to be pointed out is that the analysis on this question is complicated: If an inventor company is headquartered in a particular country, that doesn't necessarily mean that the bulk of the R&D that went into that particular drug was actually conducted in that country. Maybe they're just headquartered there for tax purposes or something like that, but their research facilities are mostly in other countries? Many of these pharmaceutical companies, are, indeed, international, so like I said, the analysis is complicated. If you can think of a better way to examine this particular question, I am all ears.
Look at what the facts are in this area, and then contrast this with what certain clueless right-wingers genuinely believe about this topic. Here's a comment that was posted on my Ben Shapiro healthcare video:
"IF [American healthcare is] SO BAD, WHY DOES USA COME UP W/EVERY MAJOR BREAKTHROUGH IN MED EQUIPMENT, PROCEDURES, AND MEDICATIONS LAST QTR CENTURY??"
And then he sprinkled in for good measure, in all caps, of course:
"YOU SOCIALIST RETARDS SHOULD PLS MOVE TO VENEZUELA."
Who could have seen that one coming—aside from everybody? A right-wing argument in 2018 without a reference to Venezuela is like a bagel without cream cheese. I swear, man, some of these right-wingers are like Tickle Me Elmo dolls in the sense that they just mindlessly repeat a handful of predictable statements: "You support Bernie Sanders? What about Venezuela?!", "Liberalism is a mental disorder!", "Sure, I have a poster in my bedroom of Milton Friedman wearing a speedo, but that doesn't make me gay!" Yeah, yeah, yeah, we've all heard it before.
But let's return to his core claim here: This guy genuinely believes, in the face of all the facts, that for the past several decades, all new major medications as well as new medical technology and procedures have originated within the United States. Not surprisingly, he doesn't cite any sources for this outlandish claim, and that's because there are no sources that support such obvious lies. Either we care about what the facts are or we don't. This guy clearly doesn't.
Keyhani et al take another look at healthcare innovation in a publication entitled: "US Pharmaceutical Innovation in an International Context." There, in one of their graphs, using data from between 1992 and 2004, they compare the percentage of new molecular entites produced against the prescription drug spending among the inventor countries. What they found was that the United States was almost perfectly average—that is to say, its percentage of the total prescription drug spending matched up with its percentage of the new drugs produced.
Some of the other countries on the list were above average in innovation, including Belgium, the Netherlands, Sweden, Denmark, and Finland. In these countries, we see that the percent of new drugs produced surpassed their percentage of the prescription drug spending. By contrast, other countries were below average in innovation, including Canada, Italy, and Australia.
Once again, the conclusion we can reach from this data is that, contrary to conservative propaganda, the United States actually isn't uniquely innovative when it comes to the production of pharmaceuticals; other countries—with either mixed or public systems—actually surpass the United States in pharmaceutical innovation.
As they conclude in their publication,
"Despite the above average profitability of US-based companies, the higher prices paid by US consumers are not rewarded by more than expected domestic innovation. US consumers pay disproportionately higher prices for brand name drugs, but the United States is not disproportionately innovative."
If that's not a QED right there, I don't know what is.
They also point out two more things in their paper worth noting:
"Many countries with significant price regulation were important innovators of pharmaceuticals; therefore, our data suggest that country-specific pricing policies probably do not affect country-specific innovation.
. . . The relative success of the pharmaceutical industry in each country may be more related to the country-specific investments in human capital, education, technology, information infrastructure, and strategic choices."
So those are the facts on pharmaceutical innovation, and they reveal the conservative position to be the wrong position.
How does the United States perform in terms of medical research publications? Steven Crowder, in that same video, claims the following:
"The United States leads in . . . publications of medical research!"
While he says this, he shows on the screen a list which shows the United States publishing the largest number of medical research documents. Yet, once again, he's making the elementary statistical mistake of not showing us—say it with me, boys and girls!—a per capita comparison. Failing to do this is the statistical equivalent of not being able to tie your shoelaces.
If you forget to do this in a college statistics class these days, they make you put one of those kinky red balls in your mouth and they flagellate you in front of the entire class while everybody yells "SHAME!" and "YOU DON'T BELONG HERE!"
Contrary to Crowder's presentation of just the total numbers, In a 2014 publication, Qinyi Xu et al actually do show us per capita comparisons of biomedical publications, and as we can see, of 20 countries with the most publications, the United States ranks #7. That is to say, 6 countries have more biomedical publications, per capita, than the United States: The U.K., Australia, the Netherlands, Sweden, Switzerland, and Israel. And it's worth pointing out that the U.K. and Sweden have public healthcare systems, whereas Australia, the Netherlands and Israel have a mixed system, with Switzerland and the U.S. having private systems.
So yet again, the data demonstrates that conservatives are flat-out wrong on this question: the United States does not lead the pack, and in fact, several countries with public or mixed healthcare systems actually surpass the United States in healthcare innovation. How is it even possible to be so consistently and humiliatingly wrong about the most basic matters of fact?
I wasn't able to find any data which compares and ranks countries in terms of medical technology innovation or the invention of new treatments, but there are sets of data which shed some light on the question of general innovation across all sectors of the economy. Since these don't focus specifically on healthcare, we'll just take a very quick look at this data.
One of these is the Global Innovation Index, which—as of 2018—ranks the United States as #6. Numbers 1–5 on the list are Switzerland, the Netherlands, Sweden, the U.K., and Singapore.
Another way to examine this question is to compare the number of patents per million in each country. As The Conference Board of Canada reports, out of the top 16 countries, as of 2010, the United States ranks number 9. The top 8 countries are Japan, Switzerland, Sweden, Germany, Finland, Denmark, the Netherlands, and Austria.
"Pfft, yeah, like that proves anything. Half of those patents in Japan are probably just new ways to eat noodles!"
The final thing I'll point out is that healthcare R&D in the United States isn't exclusively funded and performed by private companies. ResearchAmerica.org published a report detailing spending in this area, and as they point out, in 2015, total U.S. medical and health R&D spending was $159 billion.
$103 billion of this—or about 2/3—came from private industry. Most of the other 1/3 came from either federal agencies or universities and independent research institutes, with a small amount also coming from various foundations, voluntary health associations, professional societies, and state and local governments.
The reason I bring this up is that even if R&D in the United States was the most innovative in the world, it wouldn't make sense to purely give credit to our private healthcare system, because 1/3 of our R&D does not come from private industry.
So what conclusions can we reach on this subject? According to basically every single relevant per capita metric, contrary to what conservatives argue, the United States does not lead in terms of medical innovation, and it is not picking up the slack for other countries which have more progressive healthcare systems. The fact that we pay so much more for healthcare in this country is simply a failure of our system; it is not a sign of our international generosity, and there's actually no empirical support for the idea that our higher healthcare costs are necessary to fund medical R&D that the rest of the world benefits from and piggybacks off of. Simply put, the data does not line up with the faulty conservative position on these questions.