Government regulation of drug prices will increase in both mature and emerging markets

The pharmaceutical industry must prepare itself for an increasingly draconian drug pricing environment. While governments in most of the world's developed economies already regulate the prices of most prescription drugs, their control over prices will tighten in the future.

According to Decision Resources' new Industry Report, Pharmaceutical Pricing and Reimbursement: Key Facts in Mature and Emerging Markets, even some of the countries that traditionally play a limited role in price setting are poised to introduce stricter controls on pharmaceutical pricing in the future.

The German and UK governments, which have generally allowed manufacturers relative freedom to set the prices of new drugs, plan to introduce value-based pricing. The USS will continue to allow free pricing of pharmaceuticals, but recently enacted health care reform legislation will increase Medicaid rebates and require manufacturers to offer a 50% discount on drugs prescribed in the Medicare coverage gap.