ViewPoints: US/EU drug pricing divide – larger than ever?

While the US and European pharmaceutical markets have never been completely comparable to one another, events on Wednesday highlighted how divergent they have become.

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The industry launched its latest attack on EU austerity measures, led on this occasion by Richard Bergstrom – director general of the European Federation of Pharmaceutical Industries and Associations.

The narrative? – not a particularly new one; that measures in certain European countries – Germany highlighted as a key example – are causing companies to either delay the introduction of new products or withdraw existing ones if manufacturers are unable to secure a suitable price, reported Bloomberg.

Such moves are not novel, nor is playing of the 'media card' by leading industry representatives when it comes to attacking pricing and reimbursement policies, critics will suggest. More significant, however, is the growing sense among leading players that austerity measures across the region will not become notably easier to manage in the short term (as, in some cases, revenue guidance appeared to previously suggest; see ViewPoints: Will European austerity measures prompt structural changes at GlaxoSmithKline?). If anything, the outlook for manufacturers in Europe is likely to worsen with austerity measures now at least partially dictating fundamental operating structures – such as R&D – among the leading players.

The industry can breathe a sigh of relief then that in the US the ability to increase branded prices remains – for the time being at least – unrestricted.

Indeed, according to a new quarterly report published by the pharmacy benefits manager Express Scripts, prices across a basket of widely used branded products increased by an average of 13.3 percent for the first nine months of 2012 versus the comparable period in 2011. By comparison, US inflation grew by 2 percent.

Although there has always been "brand inflation," noted Steve Miller, chief medical officer at Express Scripts, it was "larger than usual" for the first nine months of 2012. What has been the catalyst for this? – Most likely the patent cliff, but possibly also the realisation that the US market retains a level of flexibility lacking elsewhere.

For how long the disparity between the US and EU markets remains at this level is open to conjecture. Recent pricing moves in the colorectal cancer market have caused commentators to suggest that EU-like austerity measures have begun to have a creeping influence on the US market (see ViewPoints: Sanofi blinks first in cancer price stand-off; what implications for industry/payer relationship in US?).

See also:

ViewPoints: German pricing visibility appears set to intensify reference pricing debate

ViewPoints: Are pharma prices a soft target in Europe?

ViewPoints: AstraZeneca, Takeda and Pfizer feature prominently among US mid-year price increases

Spotlight On: International reference pricing – the elephant in the room?

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