Very good point.
I did some more digging, and found this short paper which contains the following (boldface mine):
OECD Funding for Health Research:
The most recent figures for expenditure on health research from OECD countries are more readily accessed than those for basic research. These data do not support the notion that countries with small economies must spend less on R & D.
In the area of medical research (which traditionally is a strong supporter of basic research) Switzerland spends about twice as much (0.315% of GDP) as the USA (0.211%). Denmark also spends more (0.213%). And Sweden (0.190%) is well ahead of Japan (0.158%). These three small countries have strongly-developed private enterprises in health-related fields, particularly in pharmaceuticals.
By taking into account GDP, if not population size, I'd say this is a better marker than the one I came up with, and your objection was a valid one.