What is the US healthcare system actually optimizing for?: Market defenders
New to healthcare policy
The innovation trade
The US produced 55 percent of all new molecular entities approved worldwide between 2011 and 2020. More than half. The next closest country was Switzerland at 8 percent. Whatever is wrong with American healthcare — and things are wrong — it is also the engine that produced the COVID vaccines in under a year, the mRNA platform underneath them, the immunotherapy revolution in oncology, and the GLP-1 drugs that are reshaping obesity treatment globally.
What that costs
Innovation is expensive and messy and produces a lot of waste. That’s not a bug, it’s how R&D works. The countries with cheaper systems are riding on our investment. When activists point to drug prices in Canada or Germany, they’re pointing at countries that free-ride on American pharmaceutical R&D and then negotiate volume discounts that only work because someone else funded the pipeline.
The single-payer advocates want to import a European system. Fine — but European pharmaceutical innovation has been declining for twenty years while America’s has grown. That’s not a coincidence. Price controls suppress the return on risk, and when the return drops, the capital goes somewhere else. You get cheaper care today and fewer breakthroughs tomorrow. We’d rather be honest about that trade than pretend it doesn’t exist.
The structural critics say the system is optimizing for revenue, not health. Some parts of it are. But the market is also why you can get an MRI in three days here and three months in Ontario.
Where we concede ground: Admin costs are indefensible. 900 beds, 1,300 billing clerks. We can’t justify that.
What would change our mind: A single-payer country matching US output in new molecular entities for a decade straight.
Read the full synthesis: What is the US healthcare system actually optimizing for?