> Pharmaceutical breakthroughs are financed by the high prices paid by American patients (and backed by abundant venture capital); government-run health systems in Europe then bulk-buy the same drugs for much less.
If pharma companies did not have expectations for full price to be paid in America, they wouldn't waste their money developing therapies. This effect also applies to pharma companies in Europe that develop for American markets.
In general, I am not in favor of more military spending - but Europe is perceived as relying on the US for security arrangements as well.
In general, this is just globalization. Different regions specialize in different tasks. You don't see the United States actually manufacturing much of the pharmaceuticals. That's happening off in India or one of its neighbors.