The thing bleeding the American patient at the pharmacy counter isn’t the German health system. It’s the American shareholder. In Trump’s drug price war with Europe aims to make things cheaper for Americans, West Cuthbert at Fox News argues that Europe is stealing American medicines by negotiating lower prices, and that President Trump is right to threaten tariffs until Germans pay their fair share of pharmaceutical research and development. The column’s entire premise rests on the idea that Americans are generously subsidizing German cures. The reality is that Germans are simply doing what Americans are too structurally prevented from doing: telling the pharmaceutical industry no.
Cuthbert isn’t wrong that American drug prices are a global outlier. The U.S. pays roughly four times what Germany pays for the exact same molecule. And yes, the high-margin American market has historically funded a substantial share of the world’s pharmaceutical research. If Germany suddenly paid exactly what we pay, someone’s bottom line would improve. Drug development really is expensive; real R&D happens; other rich countries do use single-payer bargaining power to extract lower prices. Pharma is an industry with serious costs and serious products. None of that is in dispute. The dispute is about who’s to blame — and what to do about it.
The column stops exactly where the honest accounting has to begin. It assumes the extra money the American patient hands over at the counter is going to the laboratory. It isn’t. The $2.7 billion “average cost to develop a drug” Cuthbert cites is the industry’s own number, and it inflates the real cost in two specific ways. First, it includes the “opportunity cost of capital” — a phantom figure that treats money the company could have invested elsewhere as if it were a research expense. Strip it out and the cost falls by close to half. Second, it’s a company number. A lot of the underlying science — the basic research, the lab work, the early-stage discovery that identifies what molecule to even try — happens at the National Institutes of Health and at academic medical centers funded by NIH grants. By American taxpayers. The federal government funds the discovery. The patent system hands the resulting monopoly to a private firm. The firm charges monopoly prices. The taxpayer pays twice.
And that patent is a government-granted monopoly. The U.S. created the system that gives a drug company exclusive rights to sell a molecule for twenty years. That’s not a “natural” price; it’s the deliberate price, designed in exchange for the company doing the clinical trials. The high price during patent life is the return on the patent — what the government decided the company should get. Europe doesn’t pay the same price because Europe’s governments have decided, democratically, that the return should be lower. There is nothing freeloading about a sovereign government deciding what its public health system will pay for. That is what governments do.
Until very recently, the U.S. was the only developed country on earth by statute flatly forbidden from letting its largest drug buyer negotiate prices. Medicare Part D — the federal program that buys drugs for about 50 million Americans — was legally prohibited for nearly two decades from doing what every sickness fund in Germany does. Germany bargains. France bargains. The U.K. bargains. Canada bargains. The U.S. was the outlier, and the outlier status was a policy choice, not a fact of nature. Congress wrote that prohibition into the 2003 Medicare Modernization Act after a lobbying campaign the industry bragged about in its own internal documents. It is, very literally, a law the industry bought.
You can see what “use the monopsony” looks like inside the U.S. The Veterans Health Administration — the federal government’s own healthcare system for veterans — gets to negotiate drug prices, and pays substantially less than Medicare Part D for the same drugs. Same country. Same drugs. Different policy. The reason Medicare patients pay more than veterans for the same pill is not that Berlin is stealing — it’s that one branch of the U.S. government bargains and the other is forbidden to.
Then there’s what the American patient is actually financing with the premium. The pharmaceutical industry spends roughly twice as much on stock repurchases and marketing as it does on research and development — a reality documented by House Oversight Committee investigations and a comprehensive BMJ review. When an American pays a massive premium for a biologic, the surplus doesn’t buy the next cancer cure. It buys stock buybacks. It buys executive compensation. It buys marketing campaigns to convince your doctor to prescribe the brand-name version when the generic works perfectly fine. The “R&D subsidy” the op-ed is defending is a decoy. The American patient isn’t financing global innovation; the American patient is financing an extraction engine that treats their illness as a captive revenue stream.
The 2022 Inflation Reduction Act took a small step in the right direction: it let Medicare begin negotiating prices on a handful of drugs, capped out-of-pocket Part D spending at $2,000 a year (effective 2025), and capped Medicare patients’ insulin at $35 a month (effective 2023). The first round cut prices by 38 to 79 percent on Eliquis, Xarelto, Jardiance, and other top-spend drugs, with more drugs added every year. The drug industry has spent every year since suing to dismantle those provisions. The reason the full move hasn’t happened at scale is the one Cuthbert’s piece is built to obscure: the industry that wrote the rule has the political muscle to keep it.
Cuthbert’s move is to blame a foreign country for a price set by domestic lobbying. If you want to know who “stole” American patients’ money, the answer is in the Senate Finance Committee transcripts and the pharma lobbying disclosures, not in Berlin. The Section 301 investigation isn’t going to lower your bill. It’s going to start a tariff fight. Tariffs get paid by somebody, and in pharma that somebody is you. The administration tried the exact same playbook with the U.K. earlier this year, threatening tariffs until the British agreed to pay more for American medicines. A lovely outcome for the pharmaceutical industry’s shareholders — but you won’t find a single cent of that extracted wealth passed on to the American patient at the CVS counter.
So what do we build instead? We don’t need to bully Berlin or London into paying more. We just need to let our own government do what theirs already does.
Medicare could negotiate at scale, expanding the IRA’s pilot into a full monopsony the way Germany uses its sickness funds. The economics don’t change because you call it Medicare rather than a national health service.
The administration could exercise march-in rights under the Bayh-Dole Act for drugs developed with public funding. The law already permits the government to license a patent to a generic manufacturer when the company isn’t making the drug “available to the public on reasonable terms.” The tool has existed the whole time; it has simply never been used.
The federal government could expand the models that already work. Civica Rx — a nonprofit drug manufacturer founded by a coalition of hospitals — now produces insulin and other generics at a fraction of the branded price. Mark Cuban Cost Plus Drug Company sells at cost-plus, no PBM extraction, no games. The Cleveland Clinic, Mayo Clinic, and the rest founded Civica precisely because the branded market was gouging them. They are the proof the alternative isn’t theoretical.
The U.S. could import reference pricing — peg domestic prices to the average of what other rich countries pay. This is the policy Cuthbert is calling theft, applied as a domestic ceiling rather than a foreign complaint. The economics don’t care which side of the border you’re on.
The U.S. pays four times what Germany pays for the same drug. That gap is real. The cause is not German freeloading. The cause is that the United States has, by law and by lobbying, by deliberate policy choice, forbidden its own government to do the bargaining every other developed democracy does as a matter of course. Cuthbert wants you to be mad at Berlin. Be mad at the lobbyists who wrote the rule. The rule is the bill. The rule can be rewritten.
When the largest buyer in the world is finally allowed to act like a buyer, the price drops. That’s not theft. That’s a market.