A price comparison of recently launched proprietary pharmaceuticals in the UK and the US

Abstract

Objective

To explore the relationship between prices charged by manufacturers of proprietary pharmaceuticals in the US and in the UK in recent years (2013–2016), expressed as a multiplier, and to detail to what extent this relationship differs for high-cost therapies used in smaller patient populations, as compared to lower-cost drugs.

Methodology

Therapies assessed by the Scottish Medicines Consortium (SMC) in the UK between 1 January 2013 and 1 June 2016 were identified; only in-patent therapies were included in the analysis (to avoid the impact of price erosion post patent expiry); results were grouped according to annual cost per patient (whether considered high-cost, i.e., >£2,500 per patient per year, or not) and the size of the UK target population [whether considered orphan (<32,000 patients per year), ultra-orphan (<1,000 patients per year), or not]. Publicly listed prices were obtained in the US and UK and were adjusted where necessary to estimate the prices charged by manufacturers in the respective countries. The difference in price (per unit of the same strength and formulation) was calculated as a multiplier between the US and UK prices for each of the therapies identified.

Results

Based on the methodological approach described, 88 therapies were identified and included in the analysis. The multiplier between the US and UK prices was 3.64 for therapies with an estimated annual cost <£2,500; this was reduced to 1.90 for higher-cost therapies. A downward trend was also evident in the subgroup analysis of the higher-cost therapies; 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.

Conclusion

Although pharmaceutical prices have been found to be on average substantially higher in the US compared to the UK, our findings suggest that this price discrepancy is smaller for higher-cost therapies targeting small patient populations. Manufacturers of high-cost products should therefore factor this in when formulating pricing strategies because the potential for higher pricing in the US seems greater for primary care products targeting large patient populations.

• pharmaceuticals
• pricing
• orphan
• ultra-orphan
• high-cost
• highly specialised therapies
• cell therapy
• gene therapy

Notes

1 NHS England's guideline when considering drugs for inclusion in the high-cost drug exclusion list states that ‘there is, or is expected to be, more than £1.5 million spent or 600 cases in England per annum’; £1.5 million divided by 600 is £2,500.

2 Five affected persons per 10,000, assuming a UK population of 64 million, equals 32,000.

3 NICE uses the ultra-orphan term for conditions occurring in less than 1,000 people in the UK.

4 The population of the UK is approximately 12 times that of Scotland.

5 However, the exchange rate applied in the DoH analysis (upon which ABPI based their 2011 results) reflected the average exchange rate of the fourth quarter of 2010, which was significantly higher (1.58) than the more recent exchange rate used in our analysis (1.434).

6 Which formed the basis for the ABPI analysis.