Former House Speaker Newt Gingrich recently cited our center’s study in his article on U.S. drug pricing, noting that the research “flips the narrative on its head.” The study compares drug prices in the United States, Canada, Germany, the United Kingdom, France, and Japan. By including both brand-name and generic drugs and weighting prices by prescription volume, it finds that Medicare and Medicaid in the United States spend on average 18 percent less per prescription than public programs in those peer nations. This study is also referenced in the Wall Street Journal and The Economist.
The key driver is the U.S. generic market, where generics account for 93 percent of all prescriptions and cost 44 to 66 percent less than in other developed countries. This structure keeps overall prices lower for most patients while sustaining incentives for pharmaceutical innovation.
Gingrich highlighted our findings to argue against importing European-style price controls and emphasized the need for reforms that strengthen what already works, such as passing negotiated savings directly to patients, reforming pharmacy benefit managers, and reducing waste and abuse. In this way Americans can continue to benefit from both affordable medicines and breakthrough cures.
Read the full article here.