New Analysis: Patients Paid the Price When Europe Controlled Drug Costs

Patients lose access to lifesaving therapies when governments impose drug price controls, and the consequences are measured in delayed treatment, depleted research pipelines and lives cut short, according to a new research analysis from the Information Technology and Innovation Foundation (ITIF).

ITIF examined how European drug pricing policies drove the continent's fall from global biopharmaceutical leadership. While compiling and assessing existing research on the patient impact, the independent think tank called Europe a "cautionary tale" for the U.S., particularly as the Trump administration continues to champion the expansion of price controls through “Most Favored Nation” (MFN) drug pricing policies.

Patient wait times for treatment availability, as measured from regulatory approval to payer coverage, were slower in 25 of the 27 EU nations compared to the U.S. from 2014 to 2022, according to IQVIA. The Galen Institute found that, of 290 new medicines introduced globally between 2011 and 2018, 89% were available in the U.S. compared with only 62% in Germany, 48% in France and Switzerland, and 40% in Ireland.

The data were starker for oncology medicines: 96% were available to American patients compared with 73% in Germany, 66% in France, 62% in Switzerland and 51% in Ireland.

The report also traced the erosion of the pipelines that deliver patients new therapies. Between 1960 and 1965, European firms produced 65% of all new medicines worldwide. By 2004, that share collapsed to 18% while the U.S. share climbed to 62%.

ITIF cited research by University of Southern California health economist Darius Lakdawalla and his colleagues, who found that lowering U.S. drug prices to European levels would reduce life expectancy for adults ages 55 to 59 by roughly two-tenths of a year. That amounts to more than four million life-years lost across that age group alone.

For the more than 194 million Americans living with multiple chronic conditions, the analysis of Europe's decline hits close to home. These patients depend on a steady flow of new therapies to manage illness, preserve quality of life and survive.

As a recent Partnership to Fight Chronic Disease study explored, chronic conditions are the primary driver of rising health care spending across Medicare, Medicaid and private insurance, and obesity is a primary culprit. Adding longer wait times for new treatments to an already strained U.S. health care system would delay care, worsen patient outcomes and drive costs higher.

The risk is too great.

Ultimately, ITIF's analysis is a patient story.

Europe's experience shows what happens when governments suppress the returns that fuel innovation. Americans with chronic disease cannot afford for history to be repeated.

The full report from ITIF can be found HERE.