|Selected research from leading health care experts whose findings have a direct bearing on public policies effecting medical progress. Research is chosen based on its quality and relevance by the Medical Progress Today editorial staff.||
An Exploratory Analysis of Pharmaceutical Price Disparities and Their Implications Among Six Developed Nations
Calfee and his coauthors compare American drug prices to those in five other industrialized nations and find that while prices for so called "follow-on" drugs in the same class (i.e. new competitor drugs for treating high cholesterol or depression after the first breakthrough therapy in that category comes on the market) may be significantly lower, prices for first in class drugs are about the same. The problem is that "followon" drug research is often very valuable, and the burden for such research (because of European pricing restrictions) falls disproportionately on U.S. consumers.
In our study of 43 drugs, prescription drug prices in several wealthy nations (Australia, Canada, France, Germany, and the U.K.) were much lower than in the U.S. on average, well below relative per capita GDP. There was relatively little difference among the five foreign nations. All this is consistent with previous research. After separating less-unique from more unique drugs, however, important new findings emerged. Relative prices for less-unique drugs, which are subject to strong competition, were at about half the U.S. level. We suggest that this reflects the exercise of monopsony power that does not exist in the U.S., where buyers as well as sellers compete. On the other hand, relative prices for highly unique drugs tended to be approximately proportional to per capita GDP or higher. Remarkably, biotech drugs were priced at or above U.S. levels in Canada and France.
|home spotlight commentary research events news about contact links archives|