Drug Pricing Study

AGENCY:

International Trade Administration, Commerce.

ACTION:

Notice on inquiry.

SUMMARY:

Information is sought pursuant to a study of international drug pricing as required by section 1123 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003.

This information will result in a report on trade in pharmaceuticals, focusing on the drug pricing practices of countries that are members of the Organization for Economic Cooperation and Development (OECD) and the effects of those practices on drug pricing in the United States, R&D, and innovation.

DATES:

Submit comments, preferably via e-mail, on or before July 1, 2004.

FOR FURTHER INFORMATION CONTACT:

Submit comments to: Kristie Mikus at: drugpricing@ita.doc.gov.

ADDRESSES:

Department of Commerce, 14th and Constitution Avenue, Room 4039, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

The International Trade Administration (ITA) publishes this notice to solicit information, per the requirements of the Medicare Prescription Drug, Improvement and Modernization Act of 2003. The Act directs the Secretary of Commerce, in consultation with the International Trade Commission, the Secretary of Health and Human Services and the U.S. Trade Representative, to conduct a study and produce a report on trade in pharmaceuticals, focusing on the drug pricing practices of countries that are members of the Organization for Economic Cooperation and Development (OECD).

Specifically, the Conference Report to the act states:

Report on Trade in Pharmaceuticals. The Conference agreement directs the Secretary of Commerce, in consultation with the International Trade Commission, the Secretary of Health and Human Services and the United States Trade Representative, to conduct a study and report on drug pricing practices of countries that are members of the Organization for Economic Cooperation and Development and whether those practices utilize non-tariff barriers with respect to trade in pharmaceuticals. The study shall include an analysis of the use of price controls, reference pricing, and other actions that affect the market access of United States pharmaceutical products.

The study shall include the following:

Identification of the countries that use price controls or other such practices with respect to pharmaceutical trade.

Assessment of the price controls and other such practices used by the countries identified.

Estimate of additional costs to U.S. consumers due to price controls and other such practices, and the extent to which additional costs would be reduced for U.S. consumers if price controls and other such practices were reduced or eliminated.

Estimate of the impact such price controls, intellectual property laws, and other such measures have on fair pricing, innovation, generic competition, and research and development in the United States and each country identified.

Consequently, the Department is seeking input to the following

Consequently, the Department is seeking input to the following questions. However, in responding to these questions, please feel free to also include any additional information or input relevant to the study's mandate.

• How do OECD countries set pharmaceutical prices? Within OECD countries, what mechanisms do governments use to control pharmaceutical expenditures?
• If price controls and other government cost control mechanisms were eliminated in OECD countries, how and to what degree would pharmaceutical prices and expenditures change in those countries and in the United States? What effects would these changes have on the sales and profits of pharmaceutical manufacturers?
• How do patent laws and their application affect the levels of and differences in prices of patented drugs in OECD countries?
• How would U.S. consumers be affected if price controls and other government cost control mechanisms were eliminated in OECD countries?
• What factors influence, and how do companies determine research and development (R&D) expenditures? How would higher prices and revenues from sales in OECD countries affect R&D?
• What is the relationship between increased R&D by pharmaceutical manufacturers and the introduction of new drugs?
• Could OECD countries reduce costs by increasing the use of generic drugs? What steps would the governments need to take to facilitate the use of generic drugs?
• Are there means by which OECD countries could improve incentives for developing innovative medicines without significantly increasing spending on drugs?
• List any additional drug pricing practices by OECD countries that utilize non-tariff barriers.