Recently, some in Washington have proposed policies that would shift Medicare Part B away from a market-based system and instead toward a system where government interferes and sets prices below market value. Those who support these changes claim no harm will come to patients and medical innovation.
Reality tells a far different story.
Not long ago, Europe was home to the world’s leading innovation ecosystem, even outpacing the United States as a biopharmaceutical research hub. In 1986, EU spending on biopharmaceutical R&D exceeded the United States by about 24%, and between 1987 and 1991, European firms introduced 101 new medicines while U.S. firms introduced just 54. Over the next 30 years, these levels reversed entirely. Today, America is responsible for more than 50% of all new medicines, and levels of European biopharmaceutical R&D trail the United States by more than 40%.
This is not a coincidence; rather, it is the direct result of policies chosen by the governments of each region. During recent decades, the approach taken by many European countries has increasingly been to set prices at the cost of everything else. This myopic strategy is reflected not only in relative R&D downslide, but also in today’s patient outcomes. The five-year survival rate for all cancers is 42% higher for men and 15% higher for women in the United States than in Europe, for example.
Furthermore, access to new medicines is comparatively stunted, as it can take years for treatments approved in the United States to become available in many European countries. Other times, due to decisions made by government bureaucrats, these medicines never become available at all. European doctors have less freedom to prescribe the right medicines to their patients, further stalling potential treatment. The list goes on.
By contrast, U.S. policymakers have committed to creating an environment that encourages scientific discovery, rewards risk-taking and funds breakthroughs in treatment. Today’s competitive marketplace in the United States balances costs and provides patients with access to new medicines far earlier than in countries like the United Kingdom, Germany or France. Combined with a talented U.S. workforce of more than 140,000 biopharmaceutical researchers, these efforts have led to America’s position as the world’s leading source of innovation.
In discussions today, it’s easy to distract ourselves with the percentage of this versus the percentage of that, but the European story illustrates that the policies Washington is considering have very real consequences for treatment outcomes and patient lives.
The lesson is clear: The United States currently leads the world in access to new medicines because it was designed to be that way.