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Oct 042009

One of the things that comes up online in the debates on the whole US vs UK methods of health care, is the amount of research that takes place. One of the arguments the far right in the US makes is that the US is doing all the research on health care because places with socialist health care systems do not spend much on it.

Well it so happens that I work at a relatively minor University in the UK, and although I do not spend a great deal of time looking around at what the researchers do, I am aware that at least one research group is engaged in research in the health area (specifically looking at developing drugs). So I was curious to look into just how much medical research goes on in a country with a socialist health care system that some claim means spending practically nothing on medical research.

The first thing to bear in mind when it comes to research is that you can come up with a list of gadgets that has “US” down as the inventor, but things are rarely that simple. Often inventions are based on earlier research done by somebody else.

Secondly, whilst the UK health care system is socialistic, the pharmaceutical sector is private and quite healthy. Out of the top 10 pharmaceutical companies (listed by Wikpedia), 4 are US-based, and 6 are European based. Of the European based companies only 1.5 are UK-based (one is listed as “UK/Sweden”). One of the UK-based companies spends in the region of $6 billion per year on research and development; bettered only by one of the US-based companies (although figures for the amount spent is not available for some of the companies).

So lets’s see if we can add up the spending on medical research in the UK :-

Organisation Year(s) Spend
Medical Research Council 2008/9 £704 million
The Wellcome Trust 2008/9 “over £600 million”
BUPA UK (private health care) 2008/9 £1.5 million
Cancer Research UK 2008/9 £355 million
NIHR/PRP (NHS Research) 2008/9 £912 million
UK Pharmaceutical R&D 2008 $12 billion
AMRC members (including Cancer Research UK) 2006/7 £791 million

Whilst looking around for the figures above, I can across an interesting claim by Cancer Research UK – of the top 20 cancer treatment drugs in use around the world, 19 of them came about in whole or partly because of research funded by Cancer Research UK.

Excluding the rest of the AMRC members (for which I only have 2006/7 figures), the total here is some £2572 million in one year. This amounts to £42 per person per year. Or $67 according to today’s exchange rate. Plus added to that is the total spent by UK pharmaceutical companies which amounts to $12 billion a year – increasing our per person spend to $267. Of course we’re also not including the percentage of funding that US pharmaceutical companies make that is due to the drugs purchased by the NHS – doesn’t that also count as spending by the UK on medical research ?

The US overall apparently spends $95 billion on medical research which comes out at about $316 per person per year. Quite a bit more than the UK spends. But the US is richer, and we’re underestimating the UK spend on medical research and not counting European research at all which is partly funded by the UK.

Even if the UK does spend significantly less than the US, it certainly does spend a lot on medical research so the idea that a socialist health care system will cause spending on research to practically cease is wrong. Besides none of this number crunching tells us anything about how effective the spending is.

  4 Responses to “UK vs US Spending On Healthcare Research”

  1. [...] This article is a great snapshot. Take the comparisons made, and look at the cost of things not specified. In the UK, the cost of caring for the patient while doing research is covered. All those supplies are already paid for. The researcher is paid for. Here, not so much. Insurance might cover it, except the vast majority of policies don’t cover research. The research might be funded (see above). You might be a millionaire and pay for your research experience yourself. So you really have to increase UK research expenditures to include the cost of merely caring for the patient who is being studied. I imagine that might well close the gap, or narrow it significantly. [...]

  2. Indeed. Comparing how much the US and the UK spends on medical research in proper depth is something that can’t be done in a blog entry by someone who doesn’t have more than an hour or two to spend on Googling. In addition to the fact you’ve mentioned, there’s also :-

    * Currency fluctuations over the last two years have made the UK’s investment look less than it is.
    * Some of the new drugs developed and released by ‘US’ companies are in fact developed (at least partially) overseas.

    As a non-health example of the later, many people think that the (Winchester) hard drive was invented by a US company (IBM). Well it was certainly IBM, but I’ve visited the lab where much of the development was carried out – a small place just outside Winchester, UK!

  3. You can’t compare a capitalist healthcare vs a socialist healthcare and just write off the accomplishments of the US because the capitalist system has more money.
    The US has more money BECAUSE of our capitalist system. We let people be free (or at least used to) and work hard to achieve wealth. Many of those who have become rich on our system have graciously decided to give charitably, but more importantly, pharmaceutical companies have a profit motive to take the enormous risks involved in researching cures that are guaranteed to cost millions with no guarantee of money returns. This creates a win/win scenario. A win for the entrepreneurs taking risks as well as gaining profits that allow for even more research, and a win for people that would otherwise have no means of treatment. I’m glad for whatever contributions the UK government has declared the ‘right amount’ for research and what new treatments they’ve contributed, but make no mistake – if the US socializes medicine completely, the US’s towering contributions will certainly not be the same, and the world will be the worse for it.
    I know the UK has some capitalism, and some socialism, but I hope that doesn’t stop you from missing the point.


    p.s. @mike: Giving credit to Winchester for the work is great, but where did the funding come from? The US capitalist company IBM and largely from US consumers. This example gives more credence to the US capitalist system, not less.

  4. Hmm. The US has more money ? For 2011, the US had an estimated GDP of 15 trillion dollars GDP; the EU had a GDP of 17 trillion dollars. Sometimes people from the US underestimate just how rich Europe is. The US is the world’s richest country because it has European levels of productivity and a very large population – it’s 15th richest in terms of GDP per capita and of those above the US in GDP per capita, 9 are European.

    Like many large multi-nationals, IBM may have originally been a US company but is no longer – which is what multi-national is – and without selling a big pile of iron in the UK, IBM wouldn’t be here. So claiming that the IBM’s research is paid for by just US consumers is a touch inaccurate.

    Similarly (and back to the subject), the research budgets of all pharmaceutical companies (and not just US ones) is paid for by all the world’s consumers not just the US ones. Do you imagine that Johnson&Johnson (for example) only sell their products in the US?

    I get your point; I just don’t agree with it.

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