So, who has the highest prescription drug prices in the industrialized world? Why, the US, of course - everyone knows that. (Our generic prices are among the lowest, but not everyone knows that). And how much more do we pay than those fortunate folks over in Europe? Why, double or more, right?
Wrong, apparently. There's a new study coming out from the London School of Economics, comparing prices of 68 drugs between the two regions. And what they find is that US prices are about 25% higher than Europe - but no more than that:
But the study confirms data released recently by several pharmaceutical groups, including AstraZeneca and GlaxoSmithKline. This data – confirmed informally by senior industry executives – suggests profits in the US are only marginally greater than in Europe.
Past studies of drug price differences – including by the US General Accounting Office and by congressional officials – have suggested that US prices are at least one and a half times those of European prices.
Mr Kanavos says such comparisons are flawed, often comparing European list prices with US factory gate ones, which do not take into account the discounts negotiated between manufacturers and health insurers in the US. He says some previous studies have also taken unrepresentative samples.
Can this be correct? We'll have to check out the LSE study when it appears, but what if it is indeed on target? The Financial Times article mentions that this is embarrassing for the drug companies, who have maintained that the high US prices are needed to make up for lower prices elsewhere. But if the industry could have argued all along that prices aren't so high, why wouldn't it have done so to try to defuse the issue? Perhaps because no one wanted to go into great detail about all the various negotiated discounts along the supply chain? Speculation is welcome in the comments.
But it also seems embarrassing for people who've loudly been arguing the other side of the issue as well. What if the drug companies aren't as greedy as they look? And what if the European pricing regime, whose virtues have been pitched to me many times, wouldn't save much more money?
We'll take this up again when the study emerges. Until then, let the arguing commence! And thanks to FiercePharma for the tip to the story.