Jäger: U.S. can’t win by copying Europe’s failures
In a thought-provoking article, Michael Jäger, secretary general of the European Economic Senate, challenges the common perception among Americans that Europe’s healthcare systems are superior, particularly in terms of drug pricing and access. Drawing from his extensive experience living under European healthcare policies, Jäger warns that envy of these systems is misplaced. He highlights the detrimental effects of government-imposed price controls on pharmaceuticals, which, while intended to make medications more affordable, have led to a stark decline in innovation, slower access to new treatments, and a significant drop in research investment across the continent.
Jäger illustrates the consequences of these policies with concrete examples from the United Kingdom, once a leader in biopharmaceutical innovation. Major companies like AstraZeneca and Merck have either canceled or postponed significant investments in the UK, with AstraZeneca scrapping a $600 million expansion and Merck abandoning plans for a billion-dollar research hub in London. This trend of declining investment is not isolated; it reflects a broader pattern of innovation retreating from Europe to the United States, where the market still rewards risk and discovery. The article warns that if the U.S. were to adopt similar price control measures, such as the “Most Favored Nation” policy, it could result in a staggering 60% reduction in pharmaceutical research and development. This would mean that hundreds of potentially life-saving medicines might never reach patients, leading to longer wait times and fewer treatment options.
Jäger further emphasizes the strategic risks associated with stifling innovation, particularly in light of China’s rapid advancements in biotechnology. With over 100 biotech research parks and a burgeoning market value of $300 billion, China is positioning itself as a global leader in the sector. This shift not only threatens the U.S. position in biomedical research but also poses a significant national security risk, particularly in times of global health crises. The article concludes with a stark reminder for American policymakers: the choice between maintaining a vibrant innovation ecosystem and implementing price controls is a critical one. History has shown that Europe’s experience serves as a cautionary tale; if the U.S. forgets this lesson, it risks losing its status as a pioneer in healthcare advancements, ultimately depending on others for the cures it once created.
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
