MULTIiNATIONALS AND THE PHARMACEUJTICAL INDUSTRY 5 countries, 31 percent for South European countries and 22 percent for LDGs. The industry is, by any standards, a rapidly expanding one, and the overwhelming dominance of advanced countries in the total is, though diminishing slightly, likely to continue for a long time to come. Within the developed world, the six leading producers, France, Germany, Italy, Japan, UK and US, contribute $22 billion, or 88 percent of the output of the group (74 percent of estimated total world output). Different countries show markedly different rates of growth: while the group as a whole grew at 12 percent per annum in the period 1963-73, France, UK and US recorded lower than average growth, with the US being the slowest at 8,5 percent, and Japan, 18 percent, Germany, 18 percent, and Italy, 14 percent, recorded higher rates. The leading producers are, with the notable exception of Japan (which is the world's largest importer of drugs), also the dominant exporters. The seven leading exporters France, Germany, Italy, Netherlands, Switzerland, UK and US exported $3.6 billion worth of phar-maceuticals in 1973, which comes to 84 percent of total exports by developed countries and 77 percent of total world exports (excluding the socialist bloc). Within the developing and South European group, the five more industrialized countries, Brazil, India, Mexico, Spain and Yugoslavia, account for $ 2.9 billion of production, which is 61 percent of the total for the group and 10 percent of the world total. The developing world as a whole is, as may be expected, a much larger importer than it is an exporter: its imports come to 52 percent of its production compared to 12 percent for developed nations, and its exports come to 11 percent as compared to 17 percent for the latter, The geographical pattern of innovations is more concentrated than that of production, for two reasons. First, R&D tends to be centralized by the firms that conduct it in their home countries, while their production is increasingly widely spread. Second, a large number of countries, including nearly all LDCs 3, do not conduct basic R&D on a significant scale. Table II shows the national origin of 155 major drug innovations in the period 1935-70, and illustrates the dominance of the US in the discovery of new drugs. Although some authors have noted that US performance has declined drastically in recent years4, reaching 40 percent of total innovations in 1970, the evidence for a long period provided in Table II illustrates the underlying structure more clearly. Figures are not at hand on the geographical distribution