 Spectrum --
June 2008
 Introduction:
In an increasingly globalized pharmaceutical market, drug
pricing and reimbursement policies differ markedly among countries. Payers
jealously guard their authority to set prices, and both they and government
authorities exert growing pressure on manufacturers to cut prices. To best
determine pricing, pharmaceutical companies therefore need to be aware of
international price differentials; this report provides comparisons of
ex-manufacturer drug prices among the countries under study and by select
therapeutic area.
Get the Answers You Need to Shape Your Strategy:
 European prices for the 160 drugs covered in this report vary,
with German and U.K. prices on average closer to U.S. prices; in Germany,
several agents are more expensive in that country than in the United States. What
market conditions in these two European countries drive the price variations
compared with the United States? What therapeutic areas warrant higher or lower
pricing, and why? How do prices in these two countries compare with the other European
counties under study?
Since 2006, there has been a sharp decline in Japanese prices
for biologics (relative to U.S. prices), while European prices for biologics
have experienced a slight increase. Why have biologics experienced different
pricing trends in these two regions? How do biologics prices in the individual
European markets stack up against U.S. prices?
As in previous years, average wholesale prices in the United
States again increased; conversely, the annual inflation rate for drug costs was
at its lowest point in 30 years, one-quarter of what it was two years ago. What
changes in the U.S. market have contributed to this competing push-pull in
pricing trends?
A new wrinkle to government-imposed Japanese price controls
now cuts the prices of entire drug classes in response to increased sales of a
drug in that class. What other government or market factors affect drug
pricing in Japan? What is the Japanese government’s rationale for such
stringent price-control policies?
Scope:
Overall price differentials among markets:
ex-manufacturer prices of 160 best-selling drugs in six major markets (France,
Germany, Italy, Spain, United Kingdom, Japan) relative to U.S. prices.
Pricing hierarchy in individual markets: U.S. price of
each of the 160 drugs under review as a percentage of average prices in the six
other markets under review; pricing hierarchy in individual European markets,
Japan, and the five European markets overall as a percentage of U.S. prices.
Price variations by therapeutic area: coverage of 160
of the world’s best-selling prescription drugs in 2007, including 20 products
in each of 7 therapeutic areas (cardiovascular disease, metabolic disorders,
immune/inflammatory disorders, infectious disease, neurology, psychiatry, and
oncology), 10 treatments for side effects of chemotherapy, and 10
gastrointestinal drugs.
Prices of biologics: prices as a percentage of U.S.
prices for 21 biologics in the six other markets under study.
Outlook and implications: continued scrutiny and
criticism of prescription drug prices by payers in the United States; ongoing
strict government control of drug prices in Europe, achieved by mandatory price
freezes, general price cuts, and reference pricing; continued
government-imposed biennial price revisions in Japan.
Pharmaceutical Pricing Chartbook Series: This
report is part of a series that examines pricing trends for the world’s
best-selling branded drugs and for molecules that have been subject to generics
competition in recent years. The reports’ wealth of data and analysis on
pricing differentials in seven major markets will be invaluable to companies
that need to understand detailed pricing trends in key markets.
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