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U.S. Drug Costs A lot Larger Than in Different Nations

Jan. 29, 2021 — Prescription drug costs within the U.S. are greater than 250% instances greater general than these in 32 different nations, based on a new report from the RAND Company.

The hole between costs was even greater for brand-name medication, with U.S. costs 3.44 instances greater than these within the different nations. In the meantime, costs for generic medication are barely decrease within the U.S. than in most different nations. Unbranded generic medication account for 84% of medicine bought within the U.S. by quantity, the researchers discovered, however solely 12% of U.S. spending.

“The overwhelming majority of prescribed drugs [in the U.S.] are for generic, and there, the U.S. does fairly properly,” says Andrew Mulcahy, PhD, a senior coverage researcher at RAND and the lead creator of the report. “However for brand-name medication, we pay a lot greater.”

RAND is a nonprofit analysis group. The analysis was sponsored by the U.S. Division of Well being and Human Companies.

The objective of the analysis, Mulcahy says, was “to grasp in a really broad method how costs stacked up amongst these nations.”

In a press release, PhRMA, an trade group, says the U.S. system depends on a aggressive market to regulate prices, and that system is working.

Report Particulars

The RAND researchers used 2018 knowledge, the most recent obtainable, to estimate how a lot greater drug costs are within the U.S. in comparison with these in different nations within the Group for Financial Co-operation and Growth (OECD). The researchers got here up with the estimates by taking a look at trade customary knowledge on drug gross sales and quantity for 2018 and in contrast the U.S. to 32 different nations which might be additionally members of the OECD. They captured most prescribed drugs bought within the U.S. and the opposite nations.

The staff used producers’ costs for medication, Mulcahy says, reasonably than web costs, the costs in the end paid after rebates and different reductions, as a result of web costs will not be obtainable throughout the board.

Backside line, Mulcahy says, is that, “On common, U.S. costs are greater it doesn’t matter what technique you employ; not by a bit bit, however fairly a bit.”

However on the generic aspect, he says, ‘’I feel one thing goes proper right here.” The U.S. has greater use of generic prescribed drugs, in comparison with different nations, and decrease costs.

Drug Value Patterns: International Look

Among the many G7 nations, the bottom prescription costs had been present in the UK, France, and Italy, the researchers discovered, whereas Canada, Germany, and Japan usually have greater costs, however nonetheless a lot decrease than within the U.S.

The final research to check U.S. drug costs with these in different nations are practically 10 years outdated, Mulcahy says, prompting the necessity for this analysis.

The researchers estimated that throughout all of the nations evaluated, whole drug spending was $795 billion. The U.S. accounted for 58% of gross sales however simply 24% of quantity.

Taking a look at Subsets

Whereas the researchers didn’t take a look at particular person medication, they did take a look at sure teams of medicine, reminiscent of biologics. “Most of the most costly medicines are the biologic remedies that we regularly see marketed on tv,” Mulcahy says.

Biologics are medicines constituted of residing organisms or components of residing organisms. Examples are infliximab (Remicade) for arthritis and trastuzumab (Herceptin) for most cancers.

One path to reducing these prices is using biosimilar medication. As of December, the FDA had permitted 29 biosimilars. Makers of biosimilars should present that their medicines don’t have any clinically significant variations between them and the unique drug.

Pharma Responds

The report does acknowledge that generally, Individuals pay extra for medication, based on Nicole Longo, a spokesperson for PhRMA, “however once we do, it’s for modern, lifesaving medicines, not generic medicines which were in the marketplace for some time. This helps guarantee Individuals have entry to the most recent medical advances.”

“There are circumstances the place we have to deal with worth disparities between the USA and different nations, and commerce agreements and enforcement are one option to repair these issues,” she says. “Policymakers also needs to pursue commonsense reforms to repair our system that may decrease out-of-pocket prices for sufferers.”

Among the many treatments steered by PhRMA are annual caps on out-of-pocket prices, decrease cost-sharing prices, and methods to permit sufferers to unfold prices all year long.

WebMD Well being Information


RAND: “Worldwide Prescription Drug Value Comparisons: Present Empirical Estimates and Comparability with Earlier Research,” Jan. 28, 2021.

Andrew Mulcahy, PhD, senior coverage researcher, RAND Company.

Nicole Longo, spokesperson, PhRMA, Washington, DC.

FDA: “Biosimilar Product Data.”

© 2021 WebMD, LLC. All rights reserved.

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