When Americans visit my home country of Italy, they rightly rave about the food, the culture, the history, and the people. But they don't write home about our healthcare system -- and for good reason.
Italy, along with most European countries, has a government-run healthcare system that both directly and indirectly rations care to keep spending in check. Too often, Italian patients pay with their lives.
That's why it's so shocking that, across the Atlantic, both Republicans and Democrats keep trying to import one of the most superficially tantalizing, but ultimately destructive, features of Italy's healthcare system -- our strict price controls on prescription drugs. These price controls create the illusion that patients are being protected by the State. In reality, they delay and deny patients' access to life-saving treatments, slow innovation, and ultimately leave patients with fewer options when they need them most.
The Biden administration and congressional Democrats pushed through the Inflation Reduction Act, which will impose price caps on dozens of common prescription drugs over the coming years. And now, President Trump is trying to expand that price control regime by instituting a Most Favored Nation policy, which would anchor U.S. drug prices to the artificially low prices that prevail in Italy and other European countries.
But the European system is not something to emulate.
In Europe, drugs might cost less, but they arrive later, sometimes too late. In general, countries like France, Germany, and Italy, lag behind the United States' access by an average of one year. What does that mean for real Italian patients? Those trying to beat cancer may not have access to the latest cancer treatments.
And often, drugs never make it to European patients at all -- because strict price controls and regulatory restrictions prevent companies from launching their medicines in those nations. According to a 2023 report, German patients could only access 61% of new drugs approved anywhere in the world between 2012 and 2021. British patients could access only 48%, Italian ones 44%, and Danes a miserly 21%. Meanwhile, Americans had access to 85% of those medicines.
Of course, European government officials dress up this rationing with a patina of objectivity, performing cost-benefit analyses with frequently faulty comparators to justify setting artificially low prices for medicines. Many countries use the Quality-Adjusted Life Year metric, which is "weighted based on a patient's remaining years of life based on a particular treatment or intervention."
Some countries, like the United Kingdom, formally use the QALY for decision-making, while others like Italy informally use it, allowing it to factor into pricing decisions but not dictate them.
In practice, any such a metric can lead health systems to reject drugs that are aimed at people with chronic conditions or disabilities. If a drug doesn't bring a patient back to perfect health -- which is an impossible goal for someone with disabilities -- it's worth fewer QALYs, and therefore deemed less cost-effective. A therapy that slows patients' deterioration, even without curing them, can be life changing. Yet such treatments are devalued under this system and less likely to reach European patients.
In addition to a lack of access to new drugs, European systems tend to suffer from a general lack of innovation. Europe used to invent a majority of the world's drugs in the 1970s. But price controls and other forms of rationing pushed research dollars, and research talent, to the United States. American firms are now responsible for about 60% of global drug research and development, while European ones are only responsible for about 30%.
The damage to American citizens would be twofold. On the one hand, slower and less personalized care. On the other, fewer skilled workers and fewer investments: the pharmaceutical sector employs millions of people, funds university research, and supports the local economy in many states.
Stifling innovation also means increasing dependence on China for both drug production and development. That's hardly in keeping with President Trump's America First rhetoric.
But the real mistake is strategic: America would be giving up what makes it different: speed, innovation, and freedom of choice in medical treatment.
Italy, along with most European countries, has a government-run healthcare system that both directly and indirectly rations care to keep spending in check. Too often, Italian patients pay with their lives.
That's why it's so shocking that, across the Atlantic, both Republicans and Democrats keep trying to import one of the most superficially tantalizing, but ultimately destructive, features of Italy's healthcare system -- our strict price controls on prescription drugs. These price controls create the illusion that patients are being protected by the State. In reality, they delay and deny patients' access to life-saving treatments, slow innovation, and ultimately leave patients with fewer options when they need them most.
The Biden administration and congressional Democrats pushed through the Inflation Reduction Act, which will impose price caps on dozens of common prescription drugs over the coming years. And now, President Trump is trying to expand that price control regime by instituting a Most Favored Nation policy, which would anchor U.S. drug prices to the artificially low prices that prevail in Italy and other European countries.
But the European system is not something to emulate.
In Europe, drugs might cost less, but they arrive later, sometimes too late. In general, countries like France, Germany, and Italy, lag behind the United States' access by an average of one year. What does that mean for real Italian patients? Those trying to beat cancer may not have access to the latest cancer treatments.
And often, drugs never make it to European patients at all -- because strict price controls and regulatory restrictions prevent companies from launching their medicines in those nations. According to a 2023 report, German patients could only access 61% of new drugs approved anywhere in the world between 2012 and 2021. British patients could access only 48%, Italian ones 44%, and Danes a miserly 21%. Meanwhile, Americans had access to 85% of those medicines.
Of course, European government officials dress up this rationing with a patina of objectivity, performing cost-benefit analyses with frequently faulty comparators to justify setting artificially low prices for medicines. Many countries use the Quality-Adjusted Life Year metric, which is "weighted based on a patient's remaining years of life based on a particular treatment or intervention."
Some countries, like the United Kingdom, formally use the QALY for decision-making, while others like Italy informally use it, allowing it to factor into pricing decisions but not dictate them.
In practice, any such a metric can lead health systems to reject drugs that are aimed at people with chronic conditions or disabilities. If a drug doesn't bring a patient back to perfect health -- which is an impossible goal for someone with disabilities -- it's worth fewer QALYs, and therefore deemed less cost-effective. A therapy that slows patients' deterioration, even without curing them, can be life changing. Yet such treatments are devalued under this system and less likely to reach European patients.
In addition to a lack of access to new drugs, European systems tend to suffer from a general lack of innovation. Europe used to invent a majority of the world's drugs in the 1970s. But price controls and other forms of rationing pushed research dollars, and research talent, to the United States. American firms are now responsible for about 60% of global drug research and development, while European ones are only responsible for about 30%.
The damage to American citizens would be twofold. On the one hand, slower and less personalized care. On the other, fewer skilled workers and fewer investments: the pharmaceutical sector employs millions of people, funds university research, and supports the local economy in many states.
Stifling innovation also means increasing dependence on China for both drug production and development. That's hardly in keeping with President Trump's America First rhetoric.
But the real mistake is strategic: America would be giving up what makes it different: speed, innovation, and freedom of choice in medical treatment.
Copying Europe on pharmaceutical policy wouldn't strengthen America: it'd profoundly weaken it and allow China to become the world's biotech leader. America cannot afford to become Europe. And Europe can no longer afford to stay as it is.
To my American friends, I say, lend me your ears -- you might want to copy our recipes and lifestyle, but you don't want to copy our healthcare system.
Pietro Paganini is the president of Competere (Italy).
Pietro Paganini is the president of Competere (Italy).
