While that is true, it is quite clear that it is not what drives healthcare costs.
Firstly, industry only accounts for less than 60% of research in the medical field in the US to begin with. The rest is made up by donations, grants from various organizations, and about 28% from the NIH that are not part of the healthcare spending.
When you look at the R&D expenses borne by industry you get things like Pfizer, which in recent years have spent about 17% of revenues on R&D. Typically less than their profit.
Given that Pfizer gets a substantial proportion of their revenues internationally (in 2009 this was ~56%), despite massive restrictions on advertizing, while their US sales costs are substantially higher than elsewhere (e.g. in many European countries, ads for prescription medicines is outright illegal), most of their available cashflow after cost of sales/marketing is accounted for does not come from the US, and is unaffected by US healthcare costs.
If this split holds across the industry, then US healthcare sources accounts for 30% of US healthcare medical research funding.
Firstly, industry only accounts for less than 60% of research in the medical field in the US to begin with. The rest is made up by donations, grants from various organizations, and about 28% from the NIH that are not part of the healthcare spending.
When you look at the R&D expenses borne by industry you get things like Pfizer, which in recent years have spent about 17% of revenues on R&D. Typically less than their profit.
Given that Pfizer gets a substantial proportion of their revenues internationally (in 2009 this was ~56%), despite massive restrictions on advertizing, while their US sales costs are substantially higher than elsewhere (e.g. in many European countries, ads for prescription medicines is outright illegal), most of their available cashflow after cost of sales/marketing is accounted for does not come from the US, and is unaffected by US healthcare costs.
If this split holds across the industry, then US healthcare sources accounts for 30% of US healthcare medical research funding.