An essential question of policy relates to the need to protect the research-based industry to some degree from a situation in which its financial ability to innovate is seriously eroded. I do not think that I can provide a quantified answer to this controversial matter. The speciality industry itself claims to spend up to 12 or 15 per cent of its income on research (though in reality only a few firms attain this level), and there is no doubt that many new products result. Critics of the industry point to the fact that expenditure on advertising and promotion is commonly in excess of this and could be trimmed; they also point to consistently high profits, to the meagre degree of clinically useful innovation exhibited by many new products, and to the university contribution to much basic innovation. All these arguments on both sides have merit. At the policy level there has been in Europe a reaction in the form of a general acceptance of a twenty years patent period which in the case of drugs can be further extended by five years. Beyond that, the protection of the research-based industry is largely in its own hands. The fact that speciality firms have themselves entered (or made acquisitions in) the generic field provides them with a new source of income of much significance in maintaining their profits; and there is no doubt that both their public relations activities and their flexibility will stand them in good stead. It may well be that a tightening of research funding can have a salutary effect in the form of further concentration of expenditure into those companies which have a tradition of true medical innovation rather than merely the development of new molecules with familiar characteristics.