House report: Pegging drug prices to those paid in other countries could save billions 

Drug prices healthcare costs pill money
A new House report examines drug pricing in the U.S. compared to other countries. (Pixabay)

Drug prices in the U.S. are nearly four times higher on average than those paid in similar countries, and looking to other countries for drug pricing could save billions, a new House report shows. 

Staffers on the House Ways and Means Committee compared (PDF) prices for 79 drugs in the U.S. to those in 11 other countries and found the government could save $49 billion per year in Medicare Part D alone if prices were based on the averages paid in similar countries. 

American patients paid by far the most for drugs, according to the report, though prices varied widely between products. Danish patients spent on average $318 annually per capita on drugs, the lowest in the study, while U.S. patients paid $1,220 each year per capita, the highest. 

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Overall, the average per capita annual drug spending across all 12 countries was about $625. The widest gap was between the U.S. and Japan, where Americans spend about seven times more on drugs, the study found. 

RELATED: Prices for top-selling drugs appear immune to market forces, study finds 

Ways and Means Committee Chairman Rep. Richard Neal, D-Massachusetts, said in a statement that the results show just how necessary action on drug prices is. He was taking the opportunity to plug House Speaker Nancy Pelosi’s newly unveiled drug plan, which would peg prices for some drugs to those paid in a set of other countries. 

The Trump administration released a similar plan for prices in Part D, though it has yet to roll out formal regulation to launch its International Pricing Index model

“We’ve long known that families across the country, including those in my home state, Massachusetts, pay far too much for their medicines,” Neal said. “This report reveals just how unfairly high prescription prices are in the United States compared to prices in other similar nations.” 

Even with these new data to bolster Pelosi’s plan, experts are skeptical that it could make it through a divided Congress and to the president’s desk. With an election year looming, there’s a likely time crunch for any action on drug prices, and Pelosi’s proposal doesn’t gel with one in the Senate. 

Republican Sen. Chuck Grassley’s plan barely squeaked by the Senate Finance Committee, which sets up a long road for Pelosi’s proposal, experts say. Republicans have already begun to decry the plan as “socialism.” 

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