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High prescription drug prices in the US have a few causes, according to researchers.
They said causes include the approach the US has taken to granting government-protected monopolies to drug manufacturers, strategies that delay access to generic drugs, and the restriction of price negotiation at a level not observed in other industrialized nations.
The researchers outlined these issues in JAMA.
Aaron S. Kesselheim, MD, of Brigham and Women’s Hospital in Boston, Massachusetts, and his colleagues conducted this research.
The team reviewed the medical and health policy literature from January 2005 to July 2016, looking for articles addressing the sources of drug prices in the US, the justifications and consequences of high prices, and possible solutions.
The researchers found that per-capita prescription drug spending is higher in the US than in all other countries. In 2013, per-capita spending on prescription drugs was $858 in the US, compared with an average of $400 for 19 other industrialized nations.
Dr Kesselheim and his colleagues said prescription drug spending in the US is largely driven by brand-name drug prices that have been increasing in recent years. And drug prices are higher in the US because the US healthcare system allows manufacturers to set their own price for a given product.
In countries with national health insurance systems, on the other hand, a delegated body negotiates drug prices or rejects coverage of products if the price demanded by the manufacturer is excessive in light of the benefit provided. Manufacturers may then decide to offer the drug at a lower price.
The researchers said the most important factor that allows US manufacturers to set high drug prices is market exclusivity. And although cheaper generic drugs can be made available after an exclusivity period has passed, there are strategies for keeping these drugs off the market.
Furthermore, the negotiating power of the payer is constrained by several factors, including the requirement that most government drug payment plans cover nearly all products.
Considering these findings together, Dr Kesselheim and his colleagues said the most realistic short-term strategies to address high drug prices in the US include:
- Enforcing more stringent requirements for market exclusivity rights
- Ensuring timely generic drug availability
- Providing greater opportunities for price negotiation by governmental payers
- Generating more evidence about comparative cost-effectiveness of therapeutic alternatives
- Educating patients, prescribers, payers, and policy makers about these choices.
The researchers said there is little evidence that such policies would hamper innovation. In fact, they might even drive the development of more valuable new therapies rather than rewarding the persistence of older ones. 
Photo courtesy of the CDC
High prescription drug prices in the US have a few causes, according to researchers.
They said causes include the approach the US has taken to granting government-protected monopolies to drug manufacturers, strategies that delay access to generic drugs, and the restriction of price negotiation at a level not observed in other industrialized nations.
The researchers outlined these issues in JAMA.
Aaron S. Kesselheim, MD, of Brigham and Women’s Hospital in Boston, Massachusetts, and his colleagues conducted this research.
The team reviewed the medical and health policy literature from January 2005 to July 2016, looking for articles addressing the sources of drug prices in the US, the justifications and consequences of high prices, and possible solutions.
The researchers found that per-capita prescription drug spending is higher in the US than in all other countries. In 2013, per-capita spending on prescription drugs was $858 in the US, compared with an average of $400 for 19 other industrialized nations.
Dr Kesselheim and his colleagues said prescription drug spending in the US is largely driven by brand-name drug prices that have been increasing in recent years. And drug prices are higher in the US because the US healthcare system allows manufacturers to set their own price for a given product.
In countries with national health insurance systems, on the other hand, a delegated body negotiates drug prices or rejects coverage of products if the price demanded by the manufacturer is excessive in light of the benefit provided. Manufacturers may then decide to offer the drug at a lower price.
The researchers said the most important factor that allows US manufacturers to set high drug prices is market exclusivity. And although cheaper generic drugs can be made available after an exclusivity period has passed, there are strategies for keeping these drugs off the market.
Furthermore, the negotiating power of the payer is constrained by several factors, including the requirement that most government drug payment plans cover nearly all products.
Considering these findings together, Dr Kesselheim and his colleagues said the most realistic short-term strategies to address high drug prices in the US include:
- Enforcing more stringent requirements for market exclusivity rights
- Ensuring timely generic drug availability
- Providing greater opportunities for price negotiation by governmental payers
- Generating more evidence about comparative cost-effectiveness of therapeutic alternatives
- Educating patients, prescribers, payers, and policy makers about these choices.
The researchers said there is little evidence that such policies would hamper innovation. In fact, they might even drive the development of more valuable new therapies rather than rewarding the persistence of older ones.
Photo courtesy of the CDC
High prescription drug prices in the US have a few causes, according to researchers.
They said causes include the approach the US has taken to granting government-protected monopolies to drug manufacturers, strategies that delay access to generic drugs, and the restriction of price negotiation at a level not observed in other industrialized nations.
The researchers outlined these issues in JAMA.
Aaron S. Kesselheim, MD, of Brigham and Women’s Hospital in Boston, Massachusetts, and his colleagues conducted this research.
The team reviewed the medical and health policy literature from January 2005 to July 2016, looking for articles addressing the sources of drug prices in the US, the justifications and consequences of high prices, and possible solutions.
The researchers found that per-capita prescription drug spending is higher in the US than in all other countries. In 2013, per-capita spending on prescription drugs was $858 in the US, compared with an average of $400 for 19 other industrialized nations.
Dr Kesselheim and his colleagues said prescription drug spending in the US is largely driven by brand-name drug prices that have been increasing in recent years. And drug prices are higher in the US because the US healthcare system allows manufacturers to set their own price for a given product.
In countries with national health insurance systems, on the other hand, a delegated body negotiates drug prices or rejects coverage of products if the price demanded by the manufacturer is excessive in light of the benefit provided. Manufacturers may then decide to offer the drug at a lower price.
The researchers said the most important factor that allows US manufacturers to set high drug prices is market exclusivity. And although cheaper generic drugs can be made available after an exclusivity period has passed, there are strategies for keeping these drugs off the market.
Furthermore, the negotiating power of the payer is constrained by several factors, including the requirement that most government drug payment plans cover nearly all products.
Considering these findings together, Dr Kesselheim and his colleagues said the most realistic short-term strategies to address high drug prices in the US include:
- Enforcing more stringent requirements for market exclusivity rights
- Ensuring timely generic drug availability
- Providing greater opportunities for price negotiation by governmental payers
- Generating more evidence about comparative cost-effectiveness of therapeutic alternatives
- Educating patients, prescribers, payers, and policy makers about these choices.
The researchers said there is little evidence that such policies would hamper innovation. In fact, they might even drive the development of more valuable new therapies rather than rewarding the persistence of older ones.