A new study by researchers at the Johns Hopkins Bloomberg School of Public Health found that prices for brand-name prescription drugs averaged 3.2 to 4.1 times higher in the U.S. when compared with prices in the United Kingdom, Japan and the Canadian province of Ontario. The study also found that the longer the brand-name prescription drug was on the market, the greater the price differential.
If the Medicare program used the same prices as these other countries, the estimated savings to Medicare Part D would have been almost $73 billion in 2018 alone, the study found. Medicare Part D is an optional prescription drug benefit, available to Medicare beneficiaries for a premium and administered by private insurance companies.
The findings will be published in the May issue of Health Affairs.
U.S. prescription drug prices for brand-name drugs are the highest in the world. One approach to lower U.S. prescription drug prices is to benchmark drug prices to those paid in other countries using a pricing model known as external reference pricing. An estimated 29 European countries as well as Australia, New Zealand, Brazil and South Africa use this approach for the purposes of setting and negotiating the price of a drug.