Impact of Economic Socialization and Biosimilar Availability on International Price Discrimination
Session Number
Project ID: BHVSO 03
Advisor(s)
Patrick Kearney; Illinois Mathematics and Science Academy
Discipline
Behavioral and Social Sciences
Start Date
22-4-2020 10:25 AM
End Date
22-4-2020 10:40 AM
Abstract
Both prescription and OTC drug prices in America are often shockingly higher than in other countries, but for uncertain reasons. Many studies attribute this to patent expiry law and price controls (Lanjouw 2005; Vondeling et al 2018), but this study builds upon previous scholarship to suggest that relative price discrimination is largely dependent on the socialization of each country’s economy and the availability of biosimilars or generic replacements, rather than solely on patent expiry.
This study examines drugs under the U.S. Medicare Part B, comparing U.S. prices with those of the country in which the brand name drug is sold at its lowest price (U.S. Department of Health and Human Services 2018). The number of biosimilars or generic replacements available per each version of brand name drug currently on the U.S. market as approved by the FDA were compared to the price multiplier in the U.S. versus the lowest cost country. Economic socialization of each low cost country was measured by the percent of total medical spending done by individuals, private insurance, and compulsory/government spending.
Impact of Economic Socialization and Biosimilar Availability on International Price Discrimination
Both prescription and OTC drug prices in America are often shockingly higher than in other countries, but for uncertain reasons. Many studies attribute this to patent expiry law and price controls (Lanjouw 2005; Vondeling et al 2018), but this study builds upon previous scholarship to suggest that relative price discrimination is largely dependent on the socialization of each country’s economy and the availability of biosimilars or generic replacements, rather than solely on patent expiry.
This study examines drugs under the U.S. Medicare Part B, comparing U.S. prices with those of the country in which the brand name drug is sold at its lowest price (U.S. Department of Health and Human Services 2018). The number of biosimilars or generic replacements available per each version of brand name drug currently on the U.S. market as approved by the FDA were compared to the price multiplier in the U.S. versus the lowest cost country. Economic socialization of each low cost country was measured by the percent of total medical spending done by individuals, private insurance, and compulsory/government spending.