Foreign price controls deprive the world of 25 new drugs a year

Drug price controls in non-US Organization for Economic Cooperation and Development (OECD) nations reduce biopharmaceutical research and development (R&D) by more than $56 billion per year, depriving the world of 25 new drugs annually, according to a new study by the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy.

ITIF analyzed prescription drug prices in 32 OECD nations where data was available and calculated that if countries paid their rightful amount instead of free-riding on the United States, pharmaceutical revenues would increase by $254 billion (in 2018), of which $56.4 billion would have been invested in R&D. If just five wealthy nations - Japan, Italy, Germany, France, and the UK - lifted controls to bring prices in line with the USA, the world would benefit from 12 new drugs a year, the ITIF analysis found.

“Foreign price controls reduce the number of new drugs available to future generations, including to cure diseases such as heart disease, cancer, stroke, and Alzheimer’s,” said Trelysa Long, a research assistant at the ITIF, who co-authored the report, adding: “Conversely, lifting price controls benefits the world because it would boost biopharmaceutical revenue, leading to an increase in R&D and the development of new drugs.”