Posted by Michael Wonder on 07 May 2019
Using external reference pricing in Medicare Part D to reduce drug price differentials with other countries
6 May 2019 - Many countries use external reference pricing to help determine drug prices. However, external reference pricing has received little attention in the US—perhaps because the US is often the first adopter of drugs.
External reference pricing could be used to set prices for drugs that were already established in the market. Kang et al. from the Johns Hopkins Bloomberg School of Public Health compared the price differentials between the US and the UK, Japan, and Ontario (Canada) for single-source brand-name drugs that had been on the market for at least three years.
They found that the prices averaged 3.2–4.1 times higher in the US after rebates were considered. The price differential for individual drugs varied from 1.3 to 70.1. The longer a drug remained on the market, the greater the differential.
