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  Report on the International Comparison of Prices of Antidepressant and Antipsychotic Drugs. (HRG Publication #1446)INTERNATIONAL COMPARISON OF PRICES FOR ANTIDEPRESSANT AND ANTIPSYCHOTIC DRUGS Larry D. Sasich, Pharm.D., M.P.H., FASHP
ABSTRACT Background: Recently introduced antipsychotic and antidepressant drugs may have advantages over older drugs but their high cost may be a major limitation to their availability. Anecdotal reports have described large differences between costs for these drugs in the US and other countries. Methods: Physicians and pharmacists from 17 countries in North America and Europe provided information on the acquisition cost to the pharmacist of an average 30-day supply for three newer antipsychotics (clozapine, olanzapine, and risperidone) and five newer antidepressants (fluoxetine, fluvoxamine, paroxetine, sertraline, and nefazodone). Findings: For each of the eight drugs studied, the acquisition cost in the US was higher than in any other country, varying from 1.7 times to 2.9 times higher that the average acquisition cost in all other countries studied. For example, clozapine's acquisition cost was $317 in the US for a one month supply compared to an average acquisition cost of $111 in the other countries. In 1996, $2.1 billion would have saved if people in the US could have purchased the eight drugs for the average acquisition costs in the other countries. Interpretation: All countries studied except the US have national health insurance that may allow them to negotiate lower prices with pharmaceutical companies. Even with negotiated prices, the companies make a reasonable profit, e.g. 20% for all drugs in the UK. By contrast, the profit margin for these same eight drugs in US is estimated to be 42%. Annual 1996 net profits for the six companies about which such information was available were $12.3 billion. This profit margin and the concomitant high prices for these drugs in the US may deny many individuals with severe psychiatric disorders access to the drugs in the study. INTRODUCTION In recent years, many new drugs have been approved for marketing to treat the symptoms of depression, bipolar disorder (manic-depression), and schizophrenia. The new antidepressants have a different side effect profile than older agents(1), and for many previously medication-resistant individuals with schizophrenia, the newer antipsychotics offer greater efficacy(2). It is not clear what role these newer drugs will play in long-term use, compared to older antidepressants and antipsychotics, some of which have been available for decades and for which long-term studies are available. The major limitation to the availability of the new antidepressants and antipsychotics is their cost. Many state Medicaid programs, community mental health centers (CMHCs), and managed care companies have limited the use of the newer drugs in an attempt to control costs. For example, "costs of medication in Virginia's mental health aftercare system rose from $1.5 million in 1990 to $4.5 million in 1994".(3) CMHCs have reported that "skyrocketing prices on some psychoactive drugs are putting a severe strain on community mental health centers around the country".(Moran M. Rising drug prices pose dilemma for CMHCs. Psychiatric News, January 17, 1992, page 1) The costs of the newer medications are thus a major barrier to their widespread availability. The potential market for antidepressant and antipsychotic drugs in the US is large. In 1993 the National Advisory Mental Health Council (NAMHC) estimated that in any given year 2.8 percent of all adults and 3.2 percent of adolescents suffer from a severe psychiatric disorder, defined as "disorders with psychotic symptoms such as schizophrenia, schizo affective disorder, manic-depressive disorder, autism, as well as severe forms of major depression, panic disorder, and obsessive-compulsive disorder".(4) Based on 1997 population figures, that means that approximately 6 million severely mentally ill individuals in the US are potential users of antidepressant and antipsychotic medication. Of these, the NAMHC estimated that approximately 40 percent of them, or 2.4 million severely mentally ill individuals, do not receive treatment in any given year. This group includes most of the individuals who are severely mentally ill and homeless. One reason for this failure to treat is the high cost of medications. In an attempt to understand the pricing structure of the newer antidepressants and antipsychotics, we undertook an international comparison of the acquisition cost paid by the pharmacist for selected medications in North American and European countries. METHODS In early 1997, a total of 18 countries were surveyed that included all European Community (EC) Countries, Canada, Mexico and the US. Costs were ascertained by a convenience sample of English speaking pharmacists or physicians in each of these countries willing to obtain the acquisition cost to the pharmacist for the eight study drugs from a local community pharmacy. Pharmacists and physicians were recruited from the membership list for the European Society of Clinical pharmacists and the key contact list for Health Action International. Acquisition costs were obtained for five newer antidepressants and three 3 newer antipsychotics: fluoxetine (Prozac-Lilly); fluvoxamine (Luvox-Solvay); paroxetine (Paxil-SmithKline; Beecham); sertraline (Zoloft-Pfizer); nefazodone (Serzone-Bristol-Myers Squibb); clozapine (Clozaril-Sandoz, now Novartis); olanzapine (Zyprexa-Lilly); and risperidone (Risperdal-Janssen). Acquisition costs were obtained for an average 30-day supply of the 8 drugs as shown in Figures 1a - 1h. In Greece, the acquisition costs of the eight study drugs could not be obtained, only the cost to the patient. Thus, data from Greece were not included in the analysis. When a study drug was available only in unit-of-use packaging that did not correspond to the study definition of a 30-day supply, quantities and costs were converted to a 30-day supply. All costs were converted to US dollars using the foreign exchange rate for the date on which the drug costs were collected. The National Prescription Audit-1996 was used to estimate US wholesale costs and number of prescriptions dispensed for the eight study drugs.(5) Not all of the eight study drugs were available in all 17 countries. In the US, Canada, and Sweden all eight were available; in Austria, Finland, Italy, the Netherlands, Spain, and the UK seven drugs were available; in Belgium, Denmark, France, German, Ireland, Luxembourg, and Mexico six drugs were available; and in Portugal five drugs were available. In some countries, clozapine is an approved drug but is not available in community pharmacies. In France, sertraline had been approved, but the cost has not been established. RESULTS For each of the eight newer antidepressants and antipsychotics studied, the cost of the drug was greatest in the US compared to the other countries, often by a wide margin (Figures 1a-1h). For most of the drugs in most countries, there was a relatively narrow margin of cost variability, with the US being the exception. The most pronounced difference in cost was for clozapine, where the cost for a month's supply in Spain was $51.94 and in the US $317.03, more than a six-fold difference. Table 1 is a comparison of the cost of each drug in the US with the average cost for all other countries. The cost in the US varies form 1.7 times to 2.9 times the average cost for all other countries. The average of the ratio of the US costs to those in the other countries was approximately two. The table also lists the country with the lowest cost for each drug. Information is available on the total number of prescriptions filled in the US for each of the eight drugs in 1996 (Table 2). Assuming that the average prescription was for a one-month's supply, if the average cost of a month's supply of each drug for all other countries is subtracted from the cost in the US and this is then multiplied by the numbers of prescriptions filled in the US, this figure represents the amount of money that could have been saved if Americans were paying the average acquisition cost of these medications in all other countries surveyed. For fluoxetine (Prozac) and clozapine (Clozaril) alone, for example, the potential annual savings would have been $717 million and $421 million respectively. For all eight drugs the potential savings would have totaled over $2.1 billion a year. DISCUSSION Pharmaceutical industry profits are extraordinarily high. In the US, sales of $3.3 billion have recently been estimated for the five study antidepressants alone, and for the three antipsychotic drugs surveyed in this study the estimate was $1.1 billion.4 Table 3 lists the total net profits for all drugs for the six manufacturers of seven of the eight drugs included in this study (data on Solvay Pharmaceuticals were not available). For 1996 (except in one case, 1995), the total net profits for these six companies was $12.3 billion. These profit levels reflect the fact that pharmaceutical companies selling in the US continue to have one of the highest profit margins of any American industry. This is undoubtedly good for the companies' stockholders, but is not good for individuals with serve psychiatric disorder who may need the newer medications but are unable to afford them. Why are the costs of the antidepressants and antipsychotic drugs in this study so much higher in the US than in other countries? A frequently cited reason by the pharmaceutical industry is that the higher costs in the US are necessary to pay for research and development costs. At variance with this view is the fact that some of the newer drugs (e.g., risperidone, clozapine) were developed by European pharmaceutical firms and yet the cost differential between the US and other countries is as great or greater for these drugs than it is for those drugs, such as fluoxetine, that were developed in the US. A system of national health insurance, in place in all other countries, provides the most likely explanation for the wide differences in acquisition costs between the US and other countries for the study drugs. National health insurance allows other governments to negotiate drug prices, while in the US, pharmaceutical companies decide what to charge. Unlike the US, which does not have national health insurance, all other countries studied do and can thereby succeed in lowering acquisition costs for these drugs because of their market power. In the UK, for example, the Department of Health and pharmaceutical companies negotiate target profit rates from sales of drugs to the National Health Service of approximately 20 percent based on the return on investment in research and development and then set prices accordingly.(6) Assuming that the return on research and development for a specific drug made by one company is the same in the US as it is in the UK and using the difference between the lower UK and higher US prices, the profit margin for American companies manufacturing the seven drugs available in the US and the UK is 42.4 percent. A major limitation of this study was obtaining acquisition costs that were representative of a national average and clearly one pharmacy in each of the 17 countries may not represent a reliable national estimate. In some countries as many as four pharmacies were contacted before a pharmacist was found who was willing to disclose the acquisition costs of the study drugs. Nevertheless, the important consideration is the magnitude of the differences in reported acquisition costs between the US and other countries. CONCLUSION The newly developed antidepressant and antipsychotic medications may be better than older medications for the treatment of some individuals with severe psychiatric disorders, primarily schizophrenia, bipolar disorder or severe depression. This study found that the price of eight of these newly developed drugs is highest in the US in every instance compared with 17 other European and North American countries. On the average, the American price was twice as high as the average of the other countries, but for individual comparisons with other countries, the American price was as much as six times higher. The main reason for this price differential is the failure of the American government to negotiate price structures as do countries with national health insurance. The consequences of the present situation are that many individuals with severe psychiatric disorders are, for financial reasons, not being treated with the newer drugs. REFERENCES 1. Owens D. Benefits of new drugs are exaggerated. BMJ 1994;309:1280-1282. 2. Kane JM. Schizophrenia. N Engl J Med 1996;334:34-41. 3. Adityanjee A, Peloncro AL. Prescribing risperidone. Psychiatric Services 1995;46:291-292[letter]. 4. Health care reform for American with severe mental illnesses: Report of the National Advisory Mental Health Council. Am J Psychiatry 1993;150:1447-1465. 5. National Prescription Audit 1996. IMS, Plymouth Landing, PA. 6. Maynard A, Bloor K. Regulating the pharmaceutical industry. BMJ 1997;315:200-201. TABLES AND FIGURES Table 1 - Summary of Cost Data From All Countries on 8 Drugs
* for 30 day supply
Table 2 - Excess Costs in the US Compared to the Average Cost in Other Countries for the 8 Drugs
* National Prescription Audit 1996. IMS, Plymouth Landing, PA + difference between US cost to pharmacist and average cost in other countries
Table 3 - Drug Company Profits in 1996 Worldwide
NA - not available
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