Jäger: U.S. can’t win by copying Europe’s failures
In recent discussions about healthcare, many Americans express admiration for Europe’s systems, believing they offer a model worth emulating. However, Michael Jäger, secretary general of the European Economic Senate, warns that such envy is misguided. Drawing from his extensive experience within European healthcare, Jäger highlights the detrimental effects of government price controls on medications, which, while well-intentioned, have led to significant declines in pharmaceutical innovation and investment. Countries across Europe impose strict regulations on drug pricing, resulting in fewer new treatments and slower access to essential medicines. This has created a ripple effect, stifling research and development and driving major pharmaceutical companies to relocate their operations to more favorable environments.
The United Kingdom serves as a stark example of this trend. Once a leader in biopharmaceutical innovation, the UK has seen major corporations like AstraZeneca and Merck retreat from significant investments, with AstraZeneca canceling a $600 million expansion and Merck abandoning plans for a billion-dollar research hub in London. Jäger emphasizes that when governments dictate the value of drugs, it leads to a decline in innovation, pushing research and development to countries like the United States, which still rewards risk-taking and discovery. He warns that if the U.S. adopts similar price control measures, such as the proposed “Most Favored Nation” policy, it could decimate the pharmaceutical R&D landscape, potentially reducing investment by up to 60% and resulting in hundreds of medicines never reaching patients.
The implications of such a shift extend beyond mere economics; they pose a significant national security threat. As Europe retreats from biomedical innovation, China is rapidly advancing, investing heavily in biotechnology and establishing numerous research parks. With a burgeoning biotech sector valued at $300 billion, China’s ascent could leave the West vulnerable, particularly in times of health crises. Jäger concludes with a critical lesson for American policymakers: the choice is between fostering innovation or imposing price controls, but not both. Ignoring this reality could lead the U.S. to rely on other nations for the medical breakthroughs it once spearheaded, undermining its position as a leader in global health innovation.
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
