How much more does the U.S. pay for drugs? Up to 10 times more, report says

Print 29 September 2015
Emily Wasserman / FiercePharma

Skyrocketing drug prices are triggering a firestorm of criticism, with lawmakers and the public calling for new reforms. A common point: Drugs cost more in the U.S. than in other countries that use cost assessments and price caps to keep a lid on costs.

Here's how much, according to a payer organization that studies relative pricing in an annual report.

The International Federation of Health Plans (IFHP) sifted through insurance data to compare pricing for prescription drugs in countries such as the U.S., Australia, Argentina, Spain and Canada. The group found enormous differences between the U.S. and other countries, especially with specialty meds such as Novartis' ($NVS) cancer fighter Gleevec and Teva Pharmaceutical Industries' ($TEVA) multiple sclerosis powerhouse Copaxone.

For example, the average price for Gleevec in the U.S. is $6,214, while the same drug costs $989 in New Zealand, according to the IFHP research, based on 2013 numbers. And Copaxone runs at an average price of $3,903 in the U.S. compared with $862 in England.

But more commonly used meds also showed dramatic pricing disparities, including Eli Lilly's ($LLY) depression fighter Cymbalta and AstraZeneca's ($AZN) acid reflux pill Nexium. Cymbalta costs $194 in the U.S., compared with $46 in England and $110 in Canada. Nexium runs at about $215 in the U.S., compared with $60 in Switzerland and just $23 in the Netherlands, according to the IFHP report. Both drugs now face generic competition, so less costly options are available in the U.S.

IFHP CEO Tom Sackville

Some argue that drug pricing reflects use, as countries spend more on treatments for growing populations with a certain illness or disease. But looking at similar products across international markets, IFHP found that's not the case, CEO Tom Sackville said in a statement. "The price variations bear no relation to health outcomes: They merely demonstrate the relative ability of providers to profiteer at the expense of patients, and in some cases reflect a damaging degree of market failure," he said.

The IFHP's comparisons have popped up on social media in recent days, amid growing backlash over drug pricing in the U.S. Presidential candidates, lawmakers and the American public are demanding pushback at rising prices for prescription drugs. Earlier this month, Senator and presidential candidate Bernie Sanders and Rep. Elijah Cummings rolled out a bill to stall drug price hikes, with plans that would allow the government to negotiate prices and reimport lower-cost drugs from other countries. Sanders cited a 12% increase in drug prices in 2014 and $230 million in lobbying spending during the same period as part of his rallying call.

"People should not have to go without the medication they need just because their elected officials aren't willing to challenge the drug and health care industry lobby," Sanders said in a statement on his official website. "Between our government's unwillingness to negotiate prices and its failure to effectively fight fraud, it's no wonder drug prices are out of control."

Presidential hopeful Hillary Clinton is also jumping on the bandwagon, recently unveiling a plan for controlling the "cost of skyrocketing prescription drugs," including a measure that would limit so-called pay for delay deals that allow companies to extend patents on products through litigation. Clinton's reforms address growing public discontent over drug pricing in the U.S. A recent poll from the Kaiser Family Foundation found that the majority of Americans think drug prices are too high. And 86% want pharma companies to reveal how they set prices, increasing transparency as costs continue to rise.

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