Objectives: Pricing polices used in many countries are often viewed in the United States as a mechanism of price constraint. Support for this contention has arisen from pricing studies which demonstrate that the United States pays higher prices for many pharmaceutical products. No study to date, however, has examined the prices paid for pharmaceuticals that provide significant health gain, which might be expected to be lower where price constraints were operating. This study aimed to examine prices paid by federal government programs and agencies in Australia and the United States for pharmaceutical products that provide significant health gain.
Methods: Products identified by the US Food and Drug Administration and the Canadian Patented Medicines Prices Review Board as likely to confer significant health gains between 1999 and 2004 were identified. Australian and USfederal government prices ($US) and US average manufacturer prices (AMP), which do not include discounts or rebates, during the second quarter of 2006 were compared.
Results: Of 22 products for which comparisons were possible, Australian prices were higher than the US Federal Supply Schedule (FSS) prices for 14 (64%) products. When compared with AMP, Australian prices were higher for eight of the 22 products. Overall, Australian prices were higher on average by 4.2% when compared with the FSS and lower by 14.4% when compared with the AMP.
Conclusion: These results suggest that Australian prices for medicines representing significant advances in therapy are similar to those paid under key US programs despite fundamental differences in policy contexts.