Estimated Savings From International Reference Pricing for Prescription Drugs

Abstract

High prescription drug prices have important implications for health care spending, 1 patient financial burden, 2 and adherence. Prices for brand-name drugs in particular are higher in the US compared with other high-income countries, most of which regulate drug prices. However, inconsistent availability of data on net prices (ie, prices after rebates and other discounts) complicates international comparisons of drug prices. A 2021 study found that US prices for brand-name drugs were 344% of those in other high-income countries at manufacturer ("list") prices, but the difference was smaller (230%) after an adjustment to approximate lower US net prices. he Elijah E. Cummings Lower Drug Costs Now Act, HR 3, would allow the US Secretary of Health and Human Services to negotiate prices with drug manufacturers on behalf of Medicare and private insurers, up to a cap of 120% of prices in 6 countries (Australia, Canada, France, Germany, Japan, and the UK). Negotiation would apply to all insulins and at least 25 other single-source, brand-name drugs selected by the secretary in the first year and 50 in the second year. The Congressional Budget Office estimated that this application of international reference pricing, a price control tool used by many other countries, would save $456 billion for Medicare alone over 10 years. e estimated what 2020 national US savings would have been at HR 3 maximum international prices rather than US manufacturer and net prices for insulins and 50 top brandname drugs by sales.