Europe's Red Flags: A Cautionary Tale for U.S. Health Innovation

America's biopharmaceutical leadership has never been more contested – or more consequential. As policymakers in Washington consider proposals like most favored nation (MFN), which would tie U.S. prices to European benchmarks, a critical question emerges: What actually happens when a country chooses cost containment over innovation?  

Europe has lived that story.  

The U.S. cannot afford to ignore how it ends. 

On March 5, We Work For Health convened experts, industry leaders and members of Congress on Capitol Hill for a timely briefing: “Europe's Red Flags: A Cautionary Tale for U.S. Health Innovation.” The discussion examined Europe's decades-long decline in biopharmaceutical leadership and how U.S. policymakers can avoid the same fate. 

The event featured keynote remarks from Rep. Chrissy Houlahan (D-PA), a fireside chat with Endpoints News’ Tom Randall, and a moderated panel of leading health economics and policy experts. 

Keynote Remarks by Rep. Chrissy Houlahan 

Houlahan co-chairs the bipartisan Congressional BIOTech Caucus and represents a district that spans "farms to pharma," she said. She identified industry ecosystem conditions that must be preserved, including strong IP protections, access to capital for scaling companies, support for rare disease research, and investment in workforce. 

As the U.S. mulls adopting European-style drug pricing, she noted China is rapidly advancing in the biotechnology space and is a threat that the U.S. must take seriously. 

“Beijing has made biotech a whole-of-government priority,” Houlahan said. “They are now advancing their 15th five-year plan in the space of biotechnology. I’ll say that again: their 15th five-year plan....We should consider what that means if China has the opportunity to set the pace for the next generation of life-saving medicines and technologies.” 

Fireside Chat with Randall 

Randall is Vice President and founder of Endpoints Signal, a recently launched data and intelligence platform from Endpoints News that benchmarks industry sentiment across leading biopharma professionals worldwide. 

He shared an alarming data point with We Work For Health Executive Director Dan Leonard, who moderated the event. 

Signal’s Biopharma Sentiment Index conducted a survey that asked industry insiders, "If you were starting your biopharma career today, where would you choose to do it?” 

Only 9% said Europe. 

"Considering Europe's history as essentially the founder of this sector – the birthplace of penicillin, of the modern clinical trial – that is a pretty startling finding," Randall said. 

He elaborates on these findings in a recent Endpoints News article, "Even Europeans Don't See a Future in Euro Biopharma Anymore." 

Panel Discussion: Lessons from Across the Atlantic 

Leonard guided a panel that brought both European and American voices to the table:  

• Graham Cookson, Chief Executive, Office of Health Economics 

• Lou Garrison, Professor Emeritus, The CHOICE Institute, University of Washington 

• Kelly Anderson, Vice President of International Policy, U.S. Chamber of Commerce Global Innovation Policy Center 

Cookson, who is based in the London area, traced Europe's decline to the structure of its health technology assessment (HTA) systems – including the UK's National Institute for Health and Care Excellence (NICE). These systems were designed to allocate fixed health care budgets efficiently, not to incentivize future innovation.  

"The question was always, ’How do I carve up my pie today?’" Cookson said. "There was never a dynamic element: ‘How do I create more value or innovation tomorrow?’" 

The result has been a slow, sticky erosion. Manufacturing facilities and R&D operations didn’t disappear overnight, but industry investment quietly followed incentives elsewhere, mainly to the U.S. and Asia.  

Cookson advised against the U.S. adopted expanded price controls. 

"MFN imports European prices into the U.S., but it also imports Europe's philosophy on pricing,” he said. 

Garrison added an economist's lens to the conversation. On QALY-based pricing frameworks, which are commonly used in Europe to evaluate drug value, Garrison cautioned that adopting European-style pricing in the U.S. effectively means accepting European willingness-to-pay thresholds, which may not value innovations or medicines as highly as the U.S. does. 

"If we adopt European prices, we're dealing with their threshold," Garrison said. "That's the real problem." 

Anderson rounded out the discussion by highlighting data that shows how economies that impose price controls like the ones in Europe have fewer innovative medicines available and significantly longer wait times for new treatments.  

She captured the stakes with a vivid illustration of just how differently American and European patients experience access to new medicines.  

"If you were somebody with a disease, and you knew the treatment existed, people would riot in the streets if they couldn't access it here in America," Anderson said. "In Europe, there's a kind of resignation, an acceptance that you just don't get it right away. That's a standard we should never be willing to accept." 

The event made clear that Europe's experience is a real-time case study of what happens when short-term cost containment takes precedence over long-term innovation investment. 

Proposed policy in Washington threatens to take the U.S. down a strikingly similar path. 

"We cannot allow the center of gravity to shift elsewhere – to China, which is already fast on our heels to claim the global leadership we stand to surrender,” Leonard said. “Europe's story does not have to be ours. But it will be, if we don't act with clarity and conviction.”