The Office of the Assistant Secretary for Planning and Evaluation (ASPE) within the U.S. Department of Health and Human Services (HHS) has released a report entitled “Comparison of U.S. and International Prices for Top Medicare Part B Drugs by Total Expenditures.” The report comes as the Trump administration continues to implement its “American Patients First” drug pricing blueprint.

Overall, the report offers ASPE’s analysis of international prices for drugs versus what Medicare pays for physician-administered drugs in Part B. Through their analysis, ASPE argues that U.S. prices are much greater than international prices and that Medicare pays almost twice as much as it would if prices in America were similar to those in other countries.

It is likely that the administration will cite the data presented in this report as it looks to make changes to the Part B program. In introducing their study, ASPE notes that the Medicare program hasn’t applied formulary management practices to Part B that are used by both Medicare Advantage and Part D plan sponsors. Additionally, the report notes the view often suggested that the current 6 percent add-on incentivizes the use of higher priced drugs.

Drugs and Country Selection Based on Multiple Factors

The report from ASPE focuses on approximately 30 drugs, with 27 drugs being included in their main analysis. The included drugs represent the highest total Medicare reimbursement in physician offices, hospital outpatient departments, or overall under Medicare Part B. Any U.S. product with generic competition as of July 1, 2018 was eliminated. However, since the analysis was U.S.-specific, products with generic or biosimilar products available elsewhere are included. Biologics are among the chosen drugs.

The 17 countries included in the report are listed in the table below:

United States	France	Portugal
Austria	Germany	Slovakia
Belgium	Greece	Spain
Canada	Ireland	Sweden
Czech Republic	Italy	United
Finland	Japan

 

ASPE Presents Their Findings, Argues U.S. Spends Significantly More than Other Countries

Overall, the report states that U.S. ex-manufacturer prices are 1.8 times the average international ex-manufacturer price for the first quarter of 2018. This was across all 27 drugs included in the main analysis. Analysis was done for price overall, for the country-specific level, and by which countries have uniformly higher or lower prices.

ASPE found that one product had a lower U.S. price than the average international price ratio. Prices were found to be similar for six products, meaning the while the U.S. price was higher, it is within 20 percent of the international price. The remaining 20 prices had higher prices in the U.S. that exceeded the average international price by more than 20 percent.

On the country-specific level, the U.S. price was the highest among comparator countries for 19 drugs. For the 8 other drugs, the U.S. prices are within range of other countries. The U.S. had the highest price for 13 drugs.

ASPE made a final calculation in their report that showed that the Medicare program and its beneficiaries spent an additional $8.1 billion on the 27 included drugs than it would have if ASP-based payments were scaled by the international price ratios calculated by ASPE.

The report does note its limitations, which include the following:

• Variations across countries in product availability, available formulations, the responsible manufacturer, and clinical indications
• The data available in MIDAS can be collected at different levels in each country
• IQIVA data may be subject to manufacturer limitations
• The U.S. ex-manufacturer price does not include potential rebates and after sale discounts