Brad Watts
Vice President, Patents and Innovation Policy, Global Innovation Policy Center (GIPC), U.S. Chamber of Commerce
Published
October 09, 2024
Life sciences innovation occurs across an ecosystem, with the business community, universities, private capital, and governments each playing a role in the development of the next generation of medical innovation. However, policies that governments put in place can either help foster investment in innovation or stop it in its tracks. As research from the U.S. Chamber of Commerce demonstrates, market restrictive policies—such as price controls—lead to fewer new medicines, less research and development (R&D) into new treatments, and longer wait times for patients. These policies will also cause America to forfeit its global leadership in life-science innovation.
A European case study: Policymakers need to look no further than Europe to see how government price controls and a complex regulatory framework can directly impact investment in and the availability of new medical innovation.WhileEurope’s life science innovation sector is among the largest in the world, America has surged ahead in key emerging fields of study, like biologics and advanced gene, cell, and tissue therapies. Of the top ten best-selling biological medicines in Europe in 2022, just two were marketed by EU companies while six were marketed by U.S.-based companies.
Slower to market: It takes Europe on average 430 days to approve a new medicine whereas, in the United States, it only takes 334 days. According to the Chamber’s Patient Access Report, out of 104 new oncology products launched globally since 2017, only 56% were launched in Europe, whereas 80% were launched in the U.S. Additionally, those that were launched took longer to reach patients. In Germany, patients wait an average of 133 days to access new treatments; in Spain, the delay is as long as 500 days.
Dwindling investment: In Europe, investment in life science R&D—the foundation of new treatments and therapies—has shrunk to just 0.11 percent of the EU gross domestic product. On the contrary, the U.S. private sector spends 0.45 percent of gross domestic product on new discovery. In fact, despite having only 5% of the global population, the United States drives 36% of the world’s clinical trial activity.
The difference maker: While life sciences innovation in Europe is waning, in the U.S., it’s still holding strong. But America’s success story in life-science innovation will only continue if policymakers maintain strong intellectual property rights and support free market-oriented policies. However, if policymakers continue down the path of price controls and other anti-innovation proposals, patients will pay the price.
About the authors
Kelly Anderson
Kelly Anderson is the Executive Director of International Policy at the U.S. Chamber of Commerce.
Brad Watts
Brad Watts is the Vice President for Patents and Innovation Policy at the U.S. Chamber of Commerce's Global Innovation Policy Center (GIPC). He works with U.S. Chamber members to foster a political, legal, and economic environment where innovators and creators can invest in the next big thing for the benefit of Americans and the world.
