There’s this scene in the movie Sabrina where the workaholic main character (Harrison Ford) is arguing with his carefree, playboy brother (Greg Kinnear), insisting he needs to take life more seriously. “You're talking about my life!” Greg Kinnear complains.
“I pay for your life,” Harrison Ford responds. “My life makes your life possible.”
“I resent that,” Greg responds.
“So do I,” Harrison agrees.
This scene basically sums up America’s relationship with Western Europe. They love to roll their eyes at us for our patriotism, cluck their tongues at us whenever we elect a Republican, and tell us to stay out of their affairs.
Except, of course, when we pay for those affairs – which we do all the time.
The issue where this has gotten the most attention lately is the North Atlantic Treaty Organization (NATO), where we pay 16 percent of the total budget, and the rest of our allies just coast (except for Poland and Greece, countries much closer to danger than, say, Belgium or the Netherlands). President Trump has shown that he will no longer tolerate unequal burden-sharing problems with countries that exploit our generosity.
But an issue that’s less sexy but probably more serious is healthcare. The United States has long been the world’s engine for developing new medicines, with U.S. companies accounting for more than 40 percent of the global drug-development pipeline. America spends roughly 0.78 percent of GDP on new medicines and accounts for nearly half of global investment in pharmaceutical research. More than half of new medicines worldwide reach American patients first.
Without the U.S. biopharmaceutical sector, there are no new, cutting-edge medicines.
This is an important data point to remember when Europeans brag that their healthcare system is better than ours. If that’s true, it’s because they’re leeching off of our investment and hard work – like Greg Kinnear leeched off of Harrison Ford. Across Europe, governments have adopted healthcare systems built around centralized purchasing power and aggressive price-setting policies. These lower drug prices must sure be nice for European patients, but that means someone else has to pay for R&D.
That “someone else” is usually Uncle Sam.
The worst culprit has long been Germany (trust me, I used to live there). For decades, government officials in Berlin have forced mandatory price cuts on medicines the second they get off the plane from America. And they do it all while boasting about how wonderful their healthcare system is. Although Germany is the world’s third-largest economy, it spends less than half as much while continuing to pursue policies that drive that figure lower still.
Just as with NATO budgets, President Trump has been on the warpath against this kind of exploitation. In response to the threat of tariffs, the British government signed an agreement to raise the net UK price on new drugs. TrumpRx directs patients here at home to the lowest price for the medicines they need while still, importantly, preserving the innovation ecosystem that remains one of America's strongest competitive advantages.
But Berlin decided to make things even worse!
Germany recently advanced a new drug-pricing proposal that contains additional rebates and an even more aggressive mechanism that lets their government artificially distort prices. Framed at home as healthcare “reform,” the proposal is part of a broader pattern among wealthy allies: continue to benefit from America’s ecosystem and largess while contributing even less toward maintaining it.
The Germans just can’t seem to help themselves – when it comes to healthy political alliances, they feel no Pflichtbewusstsein (we don’t really have a word for it, a sense of duty or responsibility). Even when they joined the European Union to “apply for readmission into the human race,” they insisted that the EU use a German song for its anthem!
And while the German policy might look good on a budget spreadsheet, the outcomes aren’t even helpful for German patients, who often wait significantly longer for new therapies than we do. Many new treatments never receive broad coverage at all.
We pay for Western Europe’s healthcare. Our system makes their system possible. As Peter Ziehan writes in "The End of the World Is Just the Beginning," “Today’s economic landscape isn’t so much dependent upon as it is eminently addicted to American strategic and tactical overwatch.” This is not the 1950s, where we may have had a moral responsibility to help rebuild Europe: they can either pay their fair share or go off on their own. What they cannot do is continue leeching off of us.
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