Healthy Skepticism Library item: 57

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Publication type: news

Bowe C .
US drug regulator slams European pricing
The Financial Times 2003 Sep 27

Full text:

The chief US medicine regulator on Thursday attacked European prescription drug price controls, saying rich nations should pay more of the development cost for drugs that is increasingly being covered by Americans.

Mark McClellan, commissioner of the Food and Drug Administration, called for an international compromise solution for the rising “global crisis” of widening national disparities in drug pricing.

The discovery of new treatments and genetic disease cures could slow significantly, he said, when the US could no longer sustain the increasing research and development costs that price controls have pushed on it.

“The United States is now covering most of these costs of developing a new drug to the point where it can be used by the population of the world,” Mr McClellan said.

Suggesting new “international discussions”, he proposed an adjustment of worldwide drug prices to reflect each nation’s income.

He said too many rich nations paid too little, citing that the US used a fraction of prescriptions worldwide but paid about half of all global pharmaceutical spending, while Germany, the world’s third-largest economy, paid less than 5 per cent. Both France and Germany on average had lower drug prices than poorer Poland, he said.

Speaking to pharmaceutical executives in Cancún, Mexico, site of the recently disappointing world trade talks, Mr McClellan’s speech reflected a political, even trade issue, tone.

It comes as the Bush administration and the FDA are drawing wide criticism on the issue of rising drug prices in the US. Senior citizens want drug coverage to come under the federal plan Medicare, drug companies want to protect their uncontrolled US market, and increasingly rebellious state governments want to save creaking budgets by importing cheaper drugs from price-controlled Canada.

This week governors from Iowa and Minnesota joined Illinois in asking the FDA to allow them to import drugs from Canada. Congress is also considering allowing such a move.

The FDA has said it would not allow Canadian imports, because it could not guarantee the safety of the drugs.

Mr McClellan rejected notions that US prices were higher because of consumer advertising, having too many drugs approved for similar treatments and litigation costs. He also said countries should spend more on health research, based on their gross domestic product.

About 20 per cent of pharmaceutical costs came from research and development, he said.