Europe pays 40% less for drugs than U.S.

Decision Resources came out with a report showing that drug costs in Europe are an average of 40 percent less than in the U.S.--a price differential that shows why reimportation was ever raised in the first place. The study covered 170 of the most popular drugs and found costs to range from a low of 55 percent of the U.S. price in Italy to a high of 70 percent in Germany.

Most of the biggest price differences were on older drugs--such as Eli Lilly's Prozac--that face generic competition; apparently, branded drugmakers tend to cut prices in the face of generic competition in Europe, but hold those prices steady in the U.S. Differentials varied not only by geographic area, but also by therapeutic area, too.

Decision Resources' Neil Grubert cautioned against conclusion-jumping based on these numbers, however. "Many payers will look to compare the prices they pay with prices in other markets," he said in a statement. "The United States is widely assumed to be by far the most expensive pharmaceutical market, but pharmaceutical companies and payers need to be aware of the enormous price variations by therapeutic area and drug type from one country to another."

Still, the bottom line is that prices are higher in the U.S. With everyone's budget hatchet ready for use, drug costs are likely to attract plenty of attention precisely because of statistics like these. Reimportation or no, drugmakers need to be ready to explain why U.S. payers have to pay more. Because payers will definitely be asking.

- read the Decision Resources release [1]

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