International prices and availability of pharmaceuticals in 2005

Health Affairs

Volumn 27, Issue 1, 2008, Pages 221-233

  Danzon, Patricia M ^a   Furukawa, Michael F ^b  

^a UNIVERSITY OF PENNSYLVANIA   (United States)

^b ARIZONA STATE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

GENERIC DRUG;

CLASSIFICATION; COMPARATIVE STUDY; CULTURAL FACTOR; DEVELOPED COUNTRY; DRUG BIOAVAILABILITY; DRUG COST; DRUG FORMULATION; DRUG INDUSTRY; DRUG MANUFACTURE; DRUG MARKETING; DRUG USE; ECONOMICS; HEALTH CARE COST; HUMAN; INTERNATIONAL COOPERATION; PRESCRIPTION; REVIEW; SOUTH AND CENTRAL AMERICA; STATISTICS; UNITED STATES;

CROSS-CULTURAL COMPARISON; DEVELOPED COUNTRIES; DRUG COSTS; DRUGS, GENERIC; HEALTH CARE SECTOR; HEALTH EXPENDITURES; HUMANS; INTERNATIONALITY; LATIN AMERICA; PRESCRIPTIONS, DRUG; UNITED STATES;

EID: 38849166050     PISSN: 02782715     EISSN: 02782715     Source Type: Journal    
DOI: 10.1377/hlthaff.27.1.221     Document Type: Review

References (19)

1. Data are for the twelve months ending 30 June 2005. We excluded categories classified as "hospital solutions," "diagnostic agents," and "various"; formulations classified as "non-human use and others" and "unknown"; and a small percentage of packs that exceeded outlier screens based on a price relative greater than 25 or less than 0.04.
2. IMS audits wholesaler prices, then estimates manufacturer prices by subtracting wholesale margins, and public prices by adding pharmacy distributionmargins and sales taxes. These "public prices" may exceed prices paid by payers because of discounts on dispensing fees or manufacturer prices.
3. These combination products account for 25 percent of U.S. doses; other countries range from 19 percent in Japan to 31 percent in France and 48-49 percent in Mexico and Brazil (Exhibit 3).
4. The IMS standard unit is a proxy for one dose of each formulation - for example, one tablet, one capsule, 5 ml of a liquid, and so forth.
5. For example, see G.F. Anderson et al., "It's the Prices, Stupid: Why the United States Is So Different from Other Countries," Health Affairs 23, no. 3 (2003): 89-105, and references cited therein.
6. See online Appendix Exhibit 1, at http://content.healthaffairs.org/cgi/ content/full/27/1/221/DC1.
7. See online Appendix Exhibit 2, ibid.
8. We measured a molecule's global age as 2005 minus the year of a molecule's first launch in any of our sample countries.
9. Japan appears to be an exception, but this is misleading because the Japan figures include inpatient use.
10. For example, see P.M. Danzon et al., "The Impact of Price Regulation on the Launch Delay of New Drugs - Evidence from Twenty-five Major Markets in the 1990s," Health Economics 14, no. 3 (2005): 269-292;
11. and M.K. Kyle, "Pharmaceutical Price Controls and Entry Strategies," Review of Economics and Statistics 89, no. 1 (2007): 88-99.
12. Since 2005, Germany has added new patented drugs to its reference price system. Our data are too early to show the effects of this change on launch delay.
13. See online Appendix Exhibit 3, as in Note 6.
14. See online Appendix Exhibit 4, as in Note 6.
15. Appendices "Estimating Manufacturer Off-Invoice Discounts in the U.S." and "Estimating an Average Discount for the Mandatory Rebates in Germany" are available upon request from the authors. Send e-mail to danzon@wharton.upenn.edu.
16. Since PPPs measure the relative cost of purchasing a comprehensive market basket of goods at retail prices in different countries, we apply PPP conversion to public pharmaceutical prices.
17. For example, see R.G. Frank and D.S. Salkever, "Generic Entry and the Pricing for Pharmaceuticals," Journal of Economics and Management Strategy 6, no. 1 (1997): 75-90.
18. IMS classifies products that are sold "behind the counter" (that is, with advice from a pharmacist) as OTC.
19. P.M. Danzon and M.F. Furukawa, "Prices and Availability of Pharmaceuticals: Evidence from Nine Countries," Health Affairs 22 (2003): w521-w536 (published online 29 October 2003; 10.1377/hlthaff.w3.521).