US will still pay at least twice as much after negotiating drug prices

 The US government's first-ever negotiated prices for prescription drugs are still on average more than double, and in some cases five times, what drugmakers have agreed to in four other high-income countries, a Reuters review has found.

The US Medicare health plan, which covers more than 67 million people, recently unveiled new maximum prices for the first 10 high-cost medicines negotiated under the Biden Administration's Inflation Reduction Act.

This is the first time Medicare has disclosed actual drug prices, which are largely hidden behind a complicated US system of rebates and discounts. The lower prices will result in savings of $6 billion in 2026, the first year they take effect, Medicare said.

A Reuters review of publicly available maximum prices set by other wealthy nations - Australia, Japan, Canada and Sweden - show that they have negotiated far lower prices for the same drugs.

A 30-day supply of nine of the 10 drugs will cost $17,581 for Medicare in 2026, compared with $6,725 in Sweden this year. Comparable prices were not available for the 10th drug, Novo Nordisk's (NOVO-B.CO) insulin Novolog.

"In the US we've always accepted that we are the country that overpays relative to the rest of the world," said Stacie Dusetzina, professor of health policy at Nashville's Vanderbilt University.

The US sees value in being the preferred customer, she said, pointing to early availability of COVID vaccines as an example of that advantage.

Many countries have universal prescription drug coverage that relies on centralized price negotiation with manufacturers, but US law previously prevented Medicare - the nation's single biggest government program - from doing so.

Bristol Myers (BMY) said pricing was country specific and depended on national health systems and their regulatory policies, while Merck said it was not valid to compare US prices to overseas generics. Amgen declined to comment and the others drugmakers did not respond.

A spokesperson for the US agency that oversees Medicare said the new law requires consideration of factors such as manufacturer data and availability of alternative treatments, but Congress did not include review of international prices in the negotiations.

US always pays more

A study by the non-profit RAND Corp looking at 2022 prescription prices found that US health plans paid more than three times as much for brand-name pharmaceuticals, even after estimated discounts.

Studies have shown that faster uptake of new and more expensive drugs helps drive US prices, while other high-income countries directly footing the bill for healthcare place tighter restrictions on prescriptions.

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