Other nations have emulated the U.S. drug safety and efficacy regulatory experience to a greater or lesser degree. In 1971, for example, the United Kingdom increased the stringency of its regulations to a niveau approximating that of the United States, although the British system tends to operate somewhat less bureaucratically. German regulations are similar. France, on the other hand, is said to place less emphasis on randomized double-blind tests and more on expert judgements - an evidentiary approach characterized by one critic as the «French impressionist school» (THOMAS, 1996, p. 11). In 1994 the European Union established a new optional Community-wide new drug approval system, the European Medicines Evaluation Agency, whose jurisdiction will gradually be extended, undoubtedly leading to more uniform standards.
Professor L.G. Thomas of America's Emory University has advanced a hypothesis that international differences in the stringency of drug safety and efficacy regulations have had important effects on the international competitiveness of major pharmaceutical companies, and hence on the patterns of external market sales exhibited in Figure 2 (THOMAS, 1996). Because stringent and expensive tests are required in the United States, the United Kingdom, and Germany, producers at home in those nations must direct their efforts toward finding important new therapies and limit the extent to which, except by inadvertence, they develop «me too» preparations with less sales potential. Given this research emphasis and the substantial hurdles that must be surmounted to attain regulatory approval, the new molecules introduced by drug makers from those nations tend on average to be highly competitive not only at home but also in overseas markets. When drug approval standards are lower, on the other hand, companies are more likely to settle for developing less expensive «me too» drugs which, because of national health authorities' tendency to favour domestic products, do well at home but fail to win substantial export sales. The low external market sales of French and Italian drug makers may also be attributable to the price reimbursement methods used in those nations. Larger profit mark-ups are allowed on new drugs of domestic origin than on existing products and imports, and so producers have an incentive to develop new products offering only minor therapeutic gains in order to receive more favourable consideration by price controllers12.
12 Presentation by DANZON (1993, p. 11). On recent changes in the French system which require a more thorough assessment of therapeutic novelty, see PELC and CASTAN (1994, pp. 28-35).