Those who favor a nationalized healthcare system in the United States frequently point to studies that tout the success of socialized medicine in other developed countries. However, Benjamin Plotinsky at the City Journal points out that these studies do not take into account the “pharmaceutical umbrella,” i.e., the influence American-developed drugs have on helping these systems succeed:

One reason for America’s drug dominance (though far from the only one) is America’s unsocialized medicine. Here, with the exception of a few programs like Medicaid and the VA system, the government doesn’t regulate the price of drugs, so when a company invents something big—the latest miracle cancer drug, say—it strikes it rich, making its executives hunger for more. Take away the profit motive, as government-run medicine often does by forcing drug companies to sell at discounted prices, and innovation will dry up. . . . True, America’s unregulated environment benefits any drug company that sells here, regardless of its nationality—but American companies profit most, since even in today’s global economy, a higher proportion of their sales than of European companies’ sales takes place in America.

So socialist Europe, by using American drugs . . . , is profiting from good old-fashioned American free enterprise.

Earlier in the piece, Plotinsky illustrated his point by comparing the healthcare situation with the days of the Cold War:

[I]magine that it’s 1962, the hottest point of the Cold War, and that you’re reading a report comparing two countries’ strategies for resisting the Soviet menace. The United States, the report points out, spends billions of dollars a year on troops, tanks, warships, and missiles, while France spends a tiny fraction of that. Nevertheless, France and America are both unscathed by Soviet bombs. Therefore, the report concludes, France’s Cold War strategy is far more efficient than America’s. And you snicker at the obvious flaw in the reasoning, since you know that what has kept the Soviets away from France is precisely America’s enormous military budget. If not for the nuclear umbrella that the United States has unfurled over the Continent, Volgas might be cruising down the Champs Elysées.

Read Plotinsky’s article in its entirety here.

(HT: Tim Challies at Challies.com)