Some people in Europe are beavering away to undermine software patents. Before falling in with this effort, it is worth noting what Germany has managed to do to its pharma industry:

German firms once dominated the biopharmaceutical field. Known as the “medicine chest of Europe,” German drug makers spawned U.S. divisions that are now multinationals in their own right. . . .

German medical and biopharmaceutical firms are now lagging far behind their younger cousins in the U.S. when it comes to developing the new “wonder drugs” that are shaping the 21st century: By some estimates, U.S. labs are churning out 70 percent of all new drugs.

A range of shortsighted government policies did much of the damage: Reference-pricing policies, in which the government will pay only for a certain amount of low-cost medicines in a class of drugs, have become one more disincentive to develop improvements in any category of drugs. Price and access controls make private R&D too expensive, even forcing some labs to shut down. And by steadily scaling back the government resources available to support research, Germany has put its drug-makers at a severe disadvantage.

As Dan Coats former Ambassador to Germmany and author of the article concludes:

[A]s many Germans themselves concede, they are averse to change. Since change is an intended and inevitable byproduct of innovation, it’s no wonder that German industry in general -- and its pharmaceutical industry in particular -- face an innovation crisis. 3M Deutschland’s Kurt-Henning Wiethoff addressed this issue recently when he noted, “The importance of innovation for growth and prosperity is underestimated” in Germany. He called on policymakers, business leaders and the scientific community to “team up to make sure that a culture of innovation is renewed.”

posted by James DeLong @ 1:36 PM | International

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