Are drug prices significantly different between the US and Europe? If so, does this difference lead to less product innovation ? PhRMA argues that European price controls do lower prices in the EU or OECD countries as compared to the US and that this does lower innovation, makes investors less likely to invest.
Novartis recently commissioned a study from the European School of Management and Technology in Berlin. This group concluded that there is a "direct link between strict price regulation and low innovation".
However, in the post below from the Pharmalot blog, a study conducted by the London School of Economics disputes the former findings. The LSE study found that the previous study comparisons were flawed. They compared 68 "market basket" brand-name drugs and found US prices are a maxium of 25% higher than the Europena ones. This in marked contrast to a GAO study citing one and half times price differences.
The LSE study confirms data presented recently by AZ and GSK that shows drug profits in Europe are only marginally less than those seen in the US. Europe therefore remains a fairly attractive market based on price and volume -- despite price cuts by some governments recently.
Posted by Bruce Lehr July 6th 2010.