The following content is sponsored by Americans for Limited Government.
In his executive order released last month, President Donald Trump called out Europe for “free-riding” on American medicines. Europe sets socialist price controls on imported American drugs.
“American patients were effectively subsidizing socialist healthcare systems in Germany, in all parts of the European Union,” said President Trump. “They were nasty, and I see that. European Union is, in many ways, nastier than China. And we’ve just started with them. They’ll come down a lot. You watch. We have all the cards. They treated us very unfairly. They sell us 13 million cars; we sell them none. They sell us their agricultural products; we sell them virtually none. They don’t take our products. That gives us all the cards, and very unfair. So they’re going to have to pay more for healthcare.”
Forcing European countries to drop their pharmaceutical price controls through strong trade agreements will lower our trade deficit while keeping America ahead of China.
In what industry does America currently dominate Europe and China? The development of lifesaving cures for chronic diseases. America is the undisputed world champion in pharmaceutical innovation, a title that has saved millions of lives and driven the development of groundbreaking treatments.
This dominance is at risk, however, if we adopt Europe’s government-imposed price controls and death panels. While we need to make medicines more affordable, copying the European socialist model is not an “America First” solution. Instead, it would kill innovation and competition, harm our companies and leave the United States of ceding our leadership in biomedical innovation to China.
For decades, Europe was a leader in drug development, home to pioneering research and development in the industry. In recent years, however, their price controls on drugs have stifled this innovation and decimated their industry. Companies that once thrived in Europe have shifted their research hubs to the United States, where our free market rewards investment in cutting-edge treatments. This shift has helped the U.S. become the world’s pharmaceutical powerhouse, responsible for more than half of new drug discoveries.
Incredibly, previous liberal leaders like Joe Biden and Nancy Pelosi tried to implement European-style price controls in America, arguing that doing so would bring down the cost of medicine. If we let that happen, however, we will see our innovative edge erode, just as Europe’s did. The reality is simple: when countries impose price controls on drugs, those price controls cause investment to dry up. This leads to less investment in domestic manufacturing and research, ultimately limiting cures for cancer, Alzheimer’s, heart disease, and diabetes. We get fewer life-saving treatments and longer wait times for new drugs and less of the types of jobs that America needs.
There is a better way. To fix this problem, President Trump can renegotiate international trade agreements to pressure foreign governments to pay fair market prices. Just as he compelled NATO allies to “pay their fair share,” President Trump can hold European nations accountable for paying fair prices for drugs and drug development. In fact, one study showed that lifting European and other OECD price controls would increase revenue by $254.1 billion, most of it going to American companies.
So what does “fair share” actually mean? It means, in President Trump’s own words, “equalizing.” That means using strong trade deals to make foreign countries agree to pay the same amount per capita of their Gross Domestic Product for medicines that America pays. Right now, those countries don’t. Trump will fix this problem by equalizing it – if they want America’s prescription drugs, they’re going to pay American prices for them.
There is another aspect to this that should not go overlooked. That’s the country that stands to gain the most if America adopts European price controls on prescription drugs: China. China is just waiting to step in and fill the innovation void that will inevitably result. The Chinese pharmaceutical industry is already making inroads into the American market, submitting FDA applications for new medicines. If we weaken American industry through price controls, we risk ceding leadership to China, a nation whose track record on quality control, transparency, and intellectual property theft should give policymakers serious pause.
Do we really want to be in a position where we are waiting on China for the next breakthrough cancer treatment or Alzheimer’s drug? This is precisely the risk we run if we embrace price controls that defund research and development and kill innovation.
The risks of relying on China, however, extend beyond just innovation. The proliferation of untested copycat weight-loss drugs originating from China has already raised alarms about safety and supply chain vulnerabilities. If we become dependent on China for legitimate pharmaceuticals, we expose ourselves to dangerous risks. A nation that has been complicit in exporting fentanyl to our communities should not be in control of America’s pharmaceutical future.
An America First approach to drug pricing does not mean importing a failed European socialist model. It means strengthening our own industry, fostering innovation and ensuring that the United States remains the global leader in medical advancements. Price controls may sound to some like an easy fix, but they come at a cost that weakens our economic strength, harms our ability to develop new treatments, and places our pharmaceutical future in the hands of a foreign adversary.
President Trump has the historic opportunity to force European countries to drop their price controls and pay their fair share for medicines like he did with NATO. Our patients, our economy, and our national security depend on it.
