Two decades ago, European firms dominated the world pharmaceutical market, just as they had for most of the twentieth century. Now, with a few notable exceptions, the market is dominated by American firms. U.S.-based companies account for most of the worldwide bestselling drugs and for most newly introduced breakthrough drugs—especially drugs employing biotechnology methods. Drawing on research performed for the European Commission and others, Professor Fabio Pammolli of the University of Florence will describe the nature and causes of this momentous shift. Discussing his work will be two AEI scholars who have worked extensively on pharmaceutical markets, international trade, and high-technology research.