NCPA - National Center for Policy Analysis

DRUG PRICES A GRAVE PROBLEM IN EUROPE

February 20, 2007

Drug prices are a growing problem, and firms trying to set uniform prices face serious difficulties because of the disparities in how much countries can afford to spend, says Michael Rawlins, chairman of the National Institute for Health and Clinical Excellence (NICE).

According to Rawlins:

  • In Europe, Poland can spend only $650 a year per person on healthcare compared to Luxembourg or Switzerland at $3,000.
  • The arrival of modern medicines -- particularly biotech products -- has helped revolutionize the treatment of certain diseases, including some cancers; but their high prices pose a dilemma for governments and other healthcare providers.

"There is a finite amount of money that countries can afford to spend on healthcare, and countries are searching for ways they can maximize the health gains they get for their money," Rawlins said.

Rawlins' comments come as Britain's Office of Fair Trading (OFT) is expected to announce proposals to overhaul drug pricing arrangements and urge a closer link between prices and the value drugs bring to the state health service.

Under the current the Pharmaceutical Price Regulation Scheme, which controls profits made on sales of branded drugs in Britain, companies have a free hand to set prices. But the industry is concerned that this could change if the OFT opts to take a tough line and its recommendations are then endorsed by the government.

Source: Editorial, "Drug prices "grave problem": UK health watchdog," Reuters, February 19, 2007.

 

Browse more articles on Health Issues