If that were actually the case, Europe should've had a huge competitive advantage in drug development and priced the majority American drug companies out of business. Isn't anywhere close to happening, is it?
The barrier to entry to the pharmaceutical business is fairly high. Not only is it a pretty heavily regulated field (for damn good reasons), the equipment needed to start a drug company is significant and expensive, and the time between first investment and first payoff can be very long.
Various reasons, including patents. Cost is not a "huge competetive advantage" or literally everything would be produced by other countries with fewer regulations for cheaper. There's plently of protected industries in nearly every country.