Europe's Drug Approvals Remain a Warning for U.S. MFN Policy

After several years of steady growth, Europe’s drug regulators are once again increasing the pace of recommended medicines for approval.

Last year, European authorities recommended 38 new active substances, delivering a second straight year of elevated output. Even so, Europe continues to lag well behind the U.S., which approved 53 novel medicines, roughly 30% more, according to Endpoints News.

As U.S. policymakers weigh whether to adopt foreign-style pricing frameworks such as the most favored nation (MFN) model, Europe’s still lagging trajectory offers a cautionary lesson.

The broader trend is unmistakable: Europe’s standing as a global innovation hub is a shadow of itself. Years of strict price controls, delayed patient access, and slow uptake of new therapies eroded the region’s leadership.

Over the past five years, 40% of U.S. new active substance launches never reached major European markets, compared with just 7% of European launches that failed to enter the U.S. In countries with the most aggressive price‑setting regimes, patients face longer waits and fewer options for cutting-edge therapies.

A major driver of this challenge is Europe’s heavy dependence on cost‑effectiveness tools such as quality-adjusted life year (QALY) assessments.

These models often undervalue breakthrough therapies, particularly those targeting rare, severe or chronic conditions. As a result, reimbursement decisions across the continent frequently restrict or delay access for patients who stand to benefit most.

Most Organization for Economic Cooperation and Development (OECD) countries now use QALYs in some form, and more than two‑thirds embed them deeply into reimbursement and investment structures, reinforcing a system that prioritizes cost containment over scientific advancement.

Recognizing these pressures, the European Commission has launched a new competitiveness agenda.

It is working to modernize a two‑decade‑old pharmaceutical framework to speed approvals, strengthen research incentives, and expand patient access. A €500 million “Choose Europe for Science” initiative aims to attract global scientific talent, including researchers increasingly drawn to the U.S.

For American policymakers, the message is clear: Pricing regimes that promise short‑term savings can carry long‑term risks for innovation, access and global leadership.

MFN may offer immediate cost reductions, but Europe’s experience shows how such approaches can dampen investment and slow the arrival of new therapies. Drug approvals are just one measure of an industry’s strength, but they send a powerful signal.

For patients waiting for transformative treatments and for countries striving to lead the next era of medical discovery, today’s policy choices will shape tomorrow’s breakthroughs.