Report to the President: Prescription Drug Coverage, Spending, Utilization, and Prices.. Section 4. International Drug Prices and Spending

04/01/2000

“Why are American drug prices higher when compared to other countries?" Over the years, this has been a topic of much debate and study. Numerous studies have made drug price comparisons between the United States and other countries. Many of these are simply anecdotal reports appearing in the lay media. However, other more sophisticated analyses have also been published in the past decade. They all show that, to varying degrees, Americans do appear to pay higher drug prices than elsewhere in the world. How strong is this evidence? If it is indeed true, what factors are responsible? If the United States were to adopt regulatory policies implemented in other countries would drug prices fall here?

This chapter addresses each of these questions. The next section describes the factors that must be considered in making sound international price comparisons. A review and evaluation of four recent cross-national studies of drug prices follow this. Next is a section comparing prescription drug expenditures among European countries, the United States, and Canada. This section describes some of the reasons for differences in expenditure rates. The fourth section presents an overview of governmental price regulations adopted in other countries with detailed descriptions of the policies in place in Canada, France, Germany, and the United Kingdom. A concluding section summarizes what the United States can learn from these international experiences.

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