A new study published in JAMA Health Forum has uncovered striking differences in pharmaceutical pricing trends between the United States and European markets, particularly in cancer therapeutics. The research tracked drug prices from approval through September 2023, revealing divergent patterns that highlight the impact of different pricing policies across regions.
Post-Launch Price Trajectory Analysis
The analysis of 787 drugs showed that while US prices continued to climb after market entry, European markets experienced consistent price decreases. In the US, cancer drug prices rose by 1.7% annually post-launch, while non-cancer drug prices declined by 0.8%. This contrasts sharply with Germany, where prices dropped 6.1% annually for cancer drugs and 5.7% for non-cancer medications. Switzerland demonstrated similar decreases, with annual reductions of 3.7% for cancer drugs and 3.5% for non-cancer therapeutics.
Launch Price Disparities
The study documented substantial increases in initial drug prices across all markets from 2011 to 2022, though at markedly different rates:
- United States: Median launch prices surged from $29,630 to $84,240 (19.7% annual increase)
- Germany: Launch prices rose from $26,674 to $50,097 (6.0% annual increase)
- Switzerland: Initial prices increased from $18,074 to $28,920 (3.2% annual increase)
Cancer Drug Premium
A notable finding was the significant price premium commanded by cancer drugs compared to non-cancer medications. The disparity was most pronounced in the US, where cancer drugs were priced 654% higher than non-cancer therapeutics. Similar patterns emerged in Switzerland (723% premium) and Germany (267% premium), though with varying magnitudes.
Market Dynamics and Price Evolution
The research tracked price changes over extended periods post-launch, revealing distinct patterns:
United States:
- 1 year: -1.7%
- 5 years: +2.4%
- 10 years: +4.1%
Germany:
- 1 year: -11.1%
- 5 years: -33.4%
- 10 years: -45.2%
Switzerland:
- 1 year: -1.3%
- 5 years: -13.5%
- 10 years: -29.5%
Policy Implications
These findings underscore the impact of different drug pricing policies across regions. While European markets have implemented mechanisms that effectively reduce prices over time, the US market has shown vulnerability to continued price increases, particularly in oncology.
"When developing solutions on how drug prices can be lowered, which ultimately improves access to patients to new drugs, policymakers should address not only launch prices but also price changes post-launch, especially for cancer drugs," the study authors emphasized.
Market Context
The findings come amid growing concerns about pharmaceutical spending. US drug expenditure grew by 9.4% between 2021 and 2022, reaching $635.5 billion. European markets saw more modest increases, with Germany and Switzerland reporting 5.2% and 6.5% growth respectively.
The research methodology accounted for various factors, including manufacturer-to-wholesaler costs in European markets and net prices (including rebates) in the US. Prices were adjusted for inflation using OECD data, with European prices converted to US dollars based on September 2023 exchange rates.
