Jäger: U.S. can’t win by copying Europe’s failures
In a compelling critique of European healthcare systems, Michael Jäger argues that American admiration for these models is misguided, particularly when it comes to the implications of government price controls on pharmaceuticals. Drawing on his extensive experience living under such systems, Jäger emphasizes that while these policies are often instituted with good intentions, they have led to significant negative outcomes, including a marked decline in medical innovation. He highlights the stark reality that in countries like the United Kingdom, once a leader in biopharmaceutical development, government-imposed pricing restrictions have resulted in major corporations like AstraZeneca and Merck scaling back or abandoning substantial investments in research and development. The UK has seen a dramatic exodus of innovation, with companies opting to relocate their operations to more favorable environments, primarily the United States, where the market still rewards risk-taking and discovery.
Jäger warns that if the U.S. adopts similar price control measures, such as the proposed “Most Favored Nation” pricing policy, it could jeopardize the country’s pharmaceutical research landscape. According to independent analyses, including one from the University of Chicago, such policies could slash R&D investments by up to 60%, leading to a future where hundreds of potentially life-saving medicines never reach patients. The Congressional Budget Office has echoed these concerns, stating that price controls are bound to result in fewer cures and longer wait times for patients. Furthermore, Jäger underscores the broader implications of stifling innovation in the West while countries like China aggressively invest in biotechnology. With China positioning itself as a formidable competitor in the biopharmaceutical sector, the U.S. risks not only losing its scientific leadership but also creating a strategic vulnerability in times of global health crises.
In conclusion, Jäger’s analysis serves as a stark reminder for American policymakers: the trade-off between innovation and price controls is a critical consideration. He posits that Europe’s experience should serve as a cautionary tale for the U.S., emphasizing that the pursuit of affordable healthcare should not come at the expense of medical breakthroughs. The lesson is clear: without a commitment to fostering innovation, America may find itself increasingly dependent on foreign nations for the cures it once pioneered. As the landscape of global health continues to evolve, the stakes have never been higher for maintaining a robust and competitive biopharmaceutical industry in the United States.
I often hear Americans say they envy Europe’s healthcare systems. As someone who has lived under those systems my entire life, I can tell you: envy is misplaced. Europe’s experience with government price controls on medicines should serve as a warning, not an inspiration.
Across Europe, governments dictate what companies can charge for medicines. It’s a policy rooted in good intentions, but has produced disastrous outcomes: fewer new treatments, slower access to new drugs, and a steep decline in research investment.
The United Kingdom, once a powerhouse of biopharmaceutical innovation, now finds its laboratories shuttered and investments fleeing abroad. AstraZeneca canceled a $600 million expansion. Merck scrapped a billion-dollar research hub in London. Sanofi has frozen substantial research and development investment until the “commercial environment” improves.
Why are the world’s leading biopharmaceutical innovators making their own Brexit?
When governments decide what a drug is “worth,” innovation withers, and over time, entire sectors of medical research migrate elsewhere. For decades, that “elsewhere” has been the United States, the primary market that still rewards discovery and risk-taking.
If America enacts “Most Favored Nation” price controls, tying U.S. drug prices to the artificially low levels set by European health ministries, it risks erasing that advantage overnight.
Independent analysis from the University of Chicago shows that such a move could cut pharmaceutical R&D investment by up to 60%, resulting in hundreds of medicines never reaching patients. America’s Congressional Budget Office has warned the same: price controls lead inevitably to fewer cures.
For patients, that means longer waits, fewer options and vanished hope. For the US, the consequences would extend even further.
Europe’s retreat from biomedical innovation did not occur in a vacuum, and neither would America’s. As the West throttles its science, China is racing ahead.
Beijing has declared biotechnology a “strategic emerging industry.” It now hosts more than 100 biotech research parks and 17 industrial clusters, and its firms have gained $300 billion in market value in just a few years.
In a future pandemic or biothreat, dependence on China for critical drugs and vaccine components would be more than an economic liability; it would be a strategic vulnerability. Innovation is just as much a moral imperative for patients as it is a pillar of national security.
Europe has lived this experiment, and the results are in: price controls shrink access, slow cures and surrender scientific leadership to nations willing to invest.
Europe’s lesson for American policymakers is simple: You can have innovation, or you can have price controls, but you cannot have both. If America forgets that, it will find itself asking others for the cures it once created.
Michael Jäger is the secretary general of the European Economic Senate/InsideSources
