Comparing pricing of recently launched pharmaceuticals in the UK and the US

This study examines the relationship between the prices charged by manufacturers of proprietary pharmaceuticals in the US and the UK between 2013 and 2016, expressed as a multiplier. Additionally, it seeks to determine if this relationship varies between lower-cost drugs and high-cost therapies used in smaller patient populations.

Therapies assessed by the Scottish Medicines Consortium (SMC) from January 2013 to June 2016 in the UK were identified; only in-patent therapies were included in the analysis and results were separated according to annual cost per patient and the size of the UK target population [whether considered orphan, ultra-orphan, or not]. To estimate the prices charged by manufacturers in the UK and US, publicly listed prices were obtained in the respective countries and adjusted where necessary. The difference in price was calculated as a multiplier between the US and UK prices for each therapy.

88 therapies were identified and included in the analysis using this method. The multiplier between the US and UK prices was 3.64 for therapies with an estimated annual cost >£2,500; reduced to 1.90 for more expensive therapies. The subgroup analysis of the higher-cost therapies also identified a downward trend; as the estimated target patient populations reduced from >32,000 down to <1,000, the US/UK price multipliers reduced from 2.13 for the former to 1.48 for the latter.

The findings suggest that the pharmaceutical price discrepancy between UK and US is smaller for more expensive therapies that target small patient populations, despite average prices in the US typically being much higher compared to the UK. Given that the potential for higher pricing in the US appears more significant for primary care product targeting large patient populations, high-cost product manufacturers should incorporate this when developing pricing strategies.

Read the paper