At a time when European budget cuts have put unprecedented pressure on drug prices, the U.K. has enjoyed among the lowest prices in the region, a new government report finds. British prices were lower in 2010 than in France, Germany and Spain--all countries that have put the screws to pharma spending over the past couple of years. And forget about comparing U.K. prices to those in the U.S. They are not even close: British prices came in two-and-a-half times cheaper, The Telegraph reports.
Now, part of that pricing advantage can be traced to the strong British pound. But even after backing out the currency effects, U.K. price tags were still smaller than those in Australia, Germany and Sweden--and way smaller than those in the U.S.--although they were bested by lower prices in Finland, Spain and France.
The government report has industry types applauding, because they're not particularly happy about the U.K.'s plans to switch to value-based pricing. The Association of the British Pharmaceutical Industry said the report shows Britain is already getting good value for its money, pharma-wise.
But since those pricing numbers were collected, Spain, Germany and France have all cut their spending. Germany has moved to a strict value-based scheme, in which new meds have to prove superior to older drugs to carry higher prices. And as The New York Times reports, the new pricing approaches have depressed spending by several percentage points, even in countries like France, which historically have given drugmakers the most pricing leeway in the region.
Will U.K. follow that crowd? ABPI is fighting it, saying further pricing moves will hurt innovation. Even if U.K. prices somehow remained at 2010 levels, multinational pharma companies will continue to fight pricing pressures in most markets. "[T]he austerity measures themselves are going to affect everyone," said Richard Bergström, director general of the European Federation of Pharmaceutical Industries and Associations.