Report: U.S. pays 40% more for top selling drugs, compared to EU

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European prices of 170 best selling drugs averaged 40 percent less than U.S. prices in 2008, according to new research from healthcare market research firm Decision Resources.

Within Europe, prices varied substantially, from an average of 55 percent of U.S. prices in Italy to 70 percent of U.S. prices in Germany, the report found. European prices for biologics averaged 86 percent of U.S. prices.

Many of the drugs that have the largest percentage price differentials between the U.S. and other markets are older drugs, such as Novartis' anti-seizure drug Tegretol that have lost patent protection in some markets, according to the analysis.

Decision Resources said that manufacturers of branded medicines in Europe typically cut the prices of these drugs when the products lose patent protection, whereas companies in the U.S. usually maintain brand prices following patent expiration.

"The current economic downturn will focus increasing attention on the cost of prescription drugs, and many payors will look to compare the prices they pay with prices in other markets," said Neil Grubert, MD, director of pricing and reimbursement research at Decision Resources. "The U.S. is widely assumed to be by far the most expensive pharmaceutical market, but pharmaceutical companies and payors need to be aware of the enormous price variations by therapeutic area and drug type from one country to another."