Drug prices are suppressed overseas, White House study finds

Foreign governments are taking advantage of American drug company research and U.S. consumers by artificially suppressing drug prices abroad, according to a new study from the Trump administration.

“Stringent government underpricing in foreign countries has substantially increased foreign free-riding on the United States,” said the report from the White House Council of Economic Advisers. “The result is a slower pace of overall innovation, less competition from new entrants, and thus higher prices paid for patented drugs that lack therapeutic competition.”

The study compared the prices of 200 top-selling branded drugs in the United States and 15 other developed countries. It concluded that European prices on top-selling drugs are approximately 32% of U.S. prices.

The findings suggest drug pricing could become another source of friction between the United States and trading partners. Although foreign drugmakers also suffer from underpricing, the cost is borne disproportionately by the United States because it funds roughly half of all global medical research, invests 75% of global medical venture capital, and accounts for 70% of patented pharmaceutical profits, the study said.

Challenging the assumptions underlying the study, Patricia Danzon—a professor of health care management at the University of Pennsylvania’s Wharton School—attributed the price difference to manufacturers’ ability to raise prices in the United States, not governments’ ability to keep them down abroad.

https://www.pharmacist.com/article/drug-prices-are-suppressed-overseas-white-house-study-finds