Top-selling pharmaceuticals are priced much lower abroad, leaving U.S. taxpayers and patients to foot the bill for biopharmaceutical research and development, according to the findings of a recent report from the White House Council of Economic Advisers.
The issue of so-called foreign "free-riding" has grown over the past 15 years, according to the report. In 2003, top-selling pharmaceuticals were sold in Europe for about 51 percent of the U.S. price on average. By 2017, this had plummeted to 32 percent. The council estimates that if free-riding was reduced, innovator revenue would have been $194 billion higher in 2017.
The report also found that U.S. sales accounted for more than 70 percent of pharmaceutical company profits in Organization for Economic Cooperation and Development countries. The U.S. accounts for about one-third of OECD countries' cumulative gross domestic product.
The pricing discrepancy could not be explained by income differences, leading the council to conclude that the U.S. is financially shouldering the burden of global medical R&D.
Read the full report here.
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