PharmacyChecker Blog

Helping Americans Get The Truth About Prescription Drug Savings
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A report (“A Painful Pill to Swallow: U.S. vs. International Prescription Drug Prices”) was released this week by the Congressional House Ways and Means Committee, showing that brand name drug prices are much lower – by about 75% on average – in other high-income countries. Who knew? Well, our analysis from this past summer showed that the average savings on popular brand drugs filled through online orders with Canadian pharmacies was 75%. When including pharmacies in other countries, the savings jumped to 90%. Those include pharmacies located in middle income countries, such as Turkey. For the record, these are comparisons among PharmacyChecker-accredited online pharmacies.

The committee’s report looked at prices of 79 brand name drugs in the following countries: Australia, Canada (specifically Ontario), Denmark, France, Germany, Japan, Netherlands, Portugal, Sweden, Switzerland, and the United Kingdom. I highly recommend reading this report if you want to learn about international drug price differentials and better understand how Americans are getting ripped off.

The following sentence from the report resonated with me and explains the need for and existence of

“…the results clearly show that Americans are paying more for the same drugs, leading many policymakers to look abroad for models that work better in reigning in costs.”

While policymakers look abroad for models, Americans look abroad to import medication from pharmacies with these lower prices, and tens of millions have done so, because they can’t afford their medications now or because they’re tired of overpaying.

It’s not lost on me that those lower cost drugs they are referring to as “the same” include many drugs Americans are already buying online from countries such as Australia, Canada, and the UK. I give those examples in particular because drug prices from those countries were included in the study and are also available from PharmacyChecker-accredited online pharmacies. Those same brand name drugs are sold even cheaper in Turkey and India, but some Americans who choose to import feel more comfortable buying from licensed pharmacies from other high-income, English-speaking countries and they have the choice to do so.

The Committee report is not recommending importation using online pharmacies or even passing importation legislation. The report is a fairly deep dive into how much lower drug prices are in other countries and bringing that to greater awareness; explaining the use of external reference pricing (ERP) in most of the countries included in the study; and recommending ending the ban on Medicare negotiating drug prices.

A quick reminder: Under federal law, Medicare is not allowed to interfere with drug prices for Part D.

External reference pricing is when a country looks to a group of other countries and their drug prices to determine fair drug prices. The report explains it as follows:

“Most countries with an ERP create a ‘basket’ of rates in comparable countries and use the average of all prices in the basket as a benchmark, but there is some variation (e.g., Spain uses the lowest price of comparator systems; Greece uses the average of the three lowest prices).”

In 2018, the Trump administration brought up the idea of a modified form of ERP but only for drugs administered in Part B of Medicare, excluding Part D. Part B drugs are those clinically administered, not ones that Medicare enrollees buy at a retail pharmacy (Part D drugs). Part B drugs account for only 23% of drug spending in Medicare. The administration has done nothing to really move this forward.

According to the report, if the U.S. brought down prices of the 79 drugs to those found in the UK or Germany, the savings would be $49.8 and $42 billion, respectively. Interestingly, the Congressional report is not recommending ERP:

“The results we present are meant neither to make a case for one non-U.S. system versus another, nor to determine the individual factors driving the differences in pricing between the U.S. and the 11 comparator countries in this study. But the results clearly show that Americans are paying more for the same drugs, leading many policymakers to look abroad for models that work better in reigning in costs.”

The report then goes on to explain how Medicare drug price negotiations would lead to much lower prices, essentially recommending ending the ban. Ending this ban does have widespread bipartisan support among voters (90% of Democrats, 80% of Republicans), but Republican members of Congress in both the House and Senate seem to oppose it categorically.

What does this mean for everyday Americans caught in the crossfire of political paralysis on drug prices?

It don’t mean a thing chicken wing. Until Congress and the president pass new laws or implement new regulations to lower drug prices, we’re stuck with high U.S. prices. For those truly unable to afford medications here, when all other options have failed, such as drug company patient assistance programs or U.S. pharmacy discount card prices, they can and should look for lower drug prices abroad. After reading Congress’s report, it’s kind of commonsense that they would, no?

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