Side question: can you point me to data on this? Not doubting you, but would be interested to see. I'd assume that the numbers are roughly equivalent to US firms.
For the drug price discrepancy? That's easy enough to establish and you don't need me to point you towards an over-the-counter or prescription cost comparison.
As to the audit results? No, for the same reason that we can not know the exact breakdowns of R&D expenses in the US. An audit of this kind is closed and the information handed over to authorities such as national statistics centres and similar are under strict secrecy/confidentiality. What comes out of it, however, is aggregated information which once again points to a self-evident conclusion.
There have been think tanks who have gone through the data in Sweden at least. The conclusion is that much of national pharma is outsourced to universities and the "R&D investments" show up as grants to university researchers who perform the bulk of the core research.
Leading to a whole mess of concerns, most of which would be centered around to which extent partially tax funded research is handed over, in the form of patents, to pharma companies to develop further.
To address an elephant in the room of your statements above, however;
My theory is that the US is subsidizing the world by paying outrageous amounts. In other words if everyone paid that much, the companies couldn't do as much R&D. Maybe we'll see but I'm sick of the high prices here.
That's an assertion incredibly hyped and pushed by the pharma lobby. It's a talking point which has no backing what so ever.
And this is
also self-evident bullshit.
Pharma companies
don't have to do business outside of the US. If the european price controls/negotiations are a net loss,
why do the pharma companies keep selling to those places? No one has a gun to the head of Pfizer telling them they need to sell medicine to the EU at a net loss - and in fact, the CEO would in such a case be
forced to cut that market off.
I.e. your theory is disproven by the simplest nonpartisan logic. It's a lie which assumes that pharma companies are willing to eat a massive net loss in several markets. A lie told so often it's become normalized even among those who ought to know better.
The US isn't subsidizing anything of the sort, because if
any company eats a net loss in a market then they
leave that market. That's how basic capitalism works. It is, however,
very much in the interest of pharma companies to push a narrative so twisted it resembles what Big Tobacco used to say about the "Benefits of smoking".
Finally, about R&D...did you know that a substantial competitor to Big Pharma in the area of vaccines and cheap cures used to be third world countries such as Cuba? Biology research tends not to consume vast sums. Compared to NASA and other forms of research demanding precision tooling and high-rarity materials, bio-research is incredibly cheap. Hell, Cuba actually did build a Covid vaccine which, even if not
quite as effective as that of the mainline labels, did save massive amounts of lives. And they produced that on publicly available research and a shoestring budget.
The entire premise that you need enormous sums of money to perform biological R&D is a falsehood in the first place. Again proven by the most basic logic of looking at similar results being produced by comparative ramshackle operations outside of the US.
So why is R&D considered such a vast expense post specifically in the US? My
own personal theory is that pharma wants to keep that number as high as possible and has, similar to Hollywood accounting, a massive shell game going to circulate "R&D" money internally until they're either funnelled straight back into the company while still presenting a nominal "cost" to be presented to the IRS - or in the acquisition of assets which serve dual use (a research center doubling as a dormitory for staff, or including offices for legal and finance, for example).
We'll never know what exactly is done with the money unless an audit is somehow leaked, but we can still look at comparative research having been made by outfits a lot smaller which still produce sufficient results to be competitive and know that there's something
fundamentally wrong with the numbers presented on the spreadsheet.
Your fundamental premises are wrong. This renders a lot of your argumentation invalid.
Finally to address this bit;
But as a principal, capital has to be attracted based on a risk/return proposition. I don't know where or how to draw the line for profits vs. incentives.
That calculation has been performed a great many times - in fact, there was a time when the US was the
frontrunner of price capping and regulation. I advise you look at what is today called a
golden era of the US - postwar america, under FDR. Taxes were at 90% at the highest bracket. Social services, minimum wage, unionization...all at the peak. As was the booming economy.
As those - by any reckoning, incredibly socialist - measures were gradually dismantled the result became one of wealth concentration. Leading, in the end, to the dystopian shitpit you're in now where the average american, even the erudite one, takes for granted that you
need to bribe the already wealthy with the guarantee of outrageous roi's unless they threaten to take their money and leave.
And what led y'all to this point was the tacit
assumption that billionaires, banks and hedge fund managers being allowed to plunder the public purse unhindered is the only way you can gain prosperity. It's not, as your own past proves conclusively.
If you tell every investor they get to look at a 2:1 or 3:1 roi instead of a 10:1 or 20:1, do you think they'll stop investing? Stop making money even if the money earned is less?
Other investors
will. The market should apply in the investment sector as well - yet it doesn't, right now.