Are Countries Shirking Their Share of Prescription Drug R&D Costs?
New IPI Analysis Says Yes, and Explains Why (Washington, DC): Former FDA Director Dr. Mark McClellan claimed that other countries are not paying their share of prescription drug research and development costs. A new IPI Ideas says that while most countries should be paying less for brand name prescription drugs, they are paying much less—just as Dr. McClellan said. “It’s not wrong that other countries pay less for their drugs than do Americans,” says Institute for Policy Innovation (IPI) Resident Scholar Dr. Merrill Matthews. “The real question is whether discounted drugs reflect an equivalent level of purchasing power. “Our examination shows they don’t.” Take Canada, for example. In 2001, the purchasing power parity of Canada was about 82.5 percent of what U.S. consumers spent for the same basket of goods and services, reflecting the fact that Canadians on average have lower incomes than Americans. If brand name prescription drugs in Canada cost roughly 80 percent of what U.S. consume
