Content area
Full Text
The United States might spend more on biologics, but prices are not noticeably higher than in nine other countries.
ABSTRACT:
This paper presents new evidence on availability, use, and prices of biopharmaceuticals in five major European Union (EU) markets, Canada, Australia, Japan, and Mexico, relative to the United States. Our data set from IMS Health includes all product sales in 2005. Per capita spending on biopharmaceuticals was at least twice as high in the United States as in the other countries. This difference reflects primarily greater availability and use of new, relatively high-price molecules and formulations. Prices for identical formulations are not higher on average in the United States. The broader price indexes, which do not control formulation, are also not higher in the United States, after adjusting for income. [Health Affairs 25, no. 5 (2006): 1353-1362; 10.1377/hlthaff.25.5.1353]
BIOPHARMACEUTICALS HAVE attracted concern as the highest-price pharmaceutical products and the most rapidly growing component of drug spending in the United States and other countries.1 For the year ending June 2005, U.S. spending on all pharmaceuticals, at manufacturer prices, was $921 per person; of this, $119 or 12.9 percent was on biopharmaceuticals. U.S. spending on these agents grew 127 percent from 2001 to 2005; in other countries, growth was more rapid but began from a lower starting point. Biologics account for a growing share of new drug approvals: Although only 6.3 percent of all molecules available in the United States in 2005 were biologics, 18 percent of new molecules approved in the United States since 1996 have been biologics.
The purpose of this paper is to compare spending on and availability, use, and prices of biopharmaceuticals in the United States relative to nine other countries: the major European Union (EU) markets (France, Germany, Italy, Spain, and the United Kingdom), Canada, Australia, Japan, and Mexico. In documenting price and volume differences, this analysis provides a detailed test, for one high-technology sector, of the hypothesis that differences between health care spending in the United States and other countries primarily reflect prices rather than use or availability.
Study Data And Methods
Our data are from the IMS Health MIDAS database for July 2004-June 2005, which reports sales by value and unit volume for all pharmaceutical and biologic products. We...