Jäger: U.S. can’t win by copying Europe’s failures
In a thought-provoking article, Michael Jäger warns against the allure of Europe’s healthcare systems, particularly regarding government price controls on medicines. While many Americans admire Europe’s approach, Jäger, who has lived under these systems, argues that envy is misplaced. He highlights that these price controls, though intended to make healthcare more affordable, have led to significant drawbacks: a decline in new treatments, slower access to innovative drugs, and a notable drop in research investment. The United Kingdom serves as a stark example, where once-thriving biopharmaceutical companies are now retreating. Major players like AstraZeneca and Merck have canceled or frozen substantial investments, signaling a troubling trend for innovation in the region.
Jäger emphasizes the broader implications of these policies, particularly if the U.S. were to adopt similar price control measures, such as the “Most Favored Nation” pricing strategy. According to independent analysis from the University of Chicago, implementing such controls could slash pharmaceutical research and development investment by up to 60%, potentially resulting in hundreds of medicines never reaching patients. This would not only hinder patient access to new treatments but also jeopardize the U.S.’s position as a leader in biomedical innovation. As Europe experiences a retreat from research and development, China is rapidly advancing, investing heavily in biotechnology and positioning itself as a formidable competitor. Jäger warns that America’s reliance on foreign nations for critical drugs and vaccine components could become a strategic vulnerability in future health crises.
In conclusion, Jäger’s message to American policymakers is clear: the choice between innovation and price controls is stark. If the U.S. fails to recognize this lesson from Europe’s experience, it risks losing its edge in medical innovation and may find itself dependent on others for the cures it once pioneered. The stakes are high, not just for patients seeking access to new treatments, but also for national security in an increasingly competitive global landscape.
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
