Investigator to Catalogue Ways of Saving Money on Prescription Drugs

October 21, 2004

WINSTON-SALEM, N.C. – Despite the advent of powerful new drugs that have improved health dramatically, “globally, a large number of people are not receiving proper drug treatment,” says Curt D. Furberg, M.D., Ph.D., an international expert on clinical trials and drug safety.

“The escalating costs of prescription drugs are, in part, responsible for many preventable deaths in low-resource countries,” said Furberg, professor and former chairman of the Department of Public Health Sciences at Wake Forest University Baptist Medical Center.

He said that governments, health plans, health care providers and patients “have tried a variety of cost-saving methods with varying degrees of success. Unfortunately, the collective experience has not yet been summarized and reported.”

Using a one-month Rockefeller Foundation Residency next spring, Furberg plans to consolidate and catalogue information from all the various studies, talk to people worldwide, and prepare a summary of what is known.

“The goal of the project is to provide essential information to health planners, politicians, health care professionals and others faced with the desire to improve the health of the public in the face of limited resources,” Furberg said. “A more cost-effective use of drugs could ultimately contribute to increased efficiency and global equity of health care.”

He said that of the $466 billion in global pharmaceutical sales in 2003, 49 percent are in North America, 25 percent are in the European Union (EU) countries, and 11 percent are in Japan. Asia, Africa and Australia combined account for only 8 percent of drug sales, Latin America for 4 percent, and Europe outside the EU, 3 percent.

Spending per capita for prescription drugs is also skewed. In the United States in 2000, spending per capita totaled $556, followed by France ($473), Italy ($459), Canada ($385), Iceland ($382) and Germany ($375). By contrast, Mexico was only $93.

Furberg said a large number of cost-saving methods have been tested, but comprehensive information is available for only a few of them. He said that those methods could be separated into five strategies: (1) action taken by governments to curtail drug costs, (2) cost-saving approaches by local and regional health authorities and health plans, (3) actions aimed at physicians, who often don’t know the cost of the drugs they prescribe, (4) actions by pharmacists, and (5) efforts directed at patients.

Government actions have attracted the most attention. Among them are:
• Price control. “Governments have enforced price control by linking reimbursement to drug cost,” said Furberg. “The United States is the only country with open pricing of drugs.”
• Importation/parallel trade. “In Europe, transfer of drugs, primarily branded drugs, from lower-cost to higher-cost countries is allowed through so-called parallel trade,” he said.
• Generic substitution. “The cost of generic drugs is substantially below the cost of equivalent branded drugs,” he said. “For many countries, generic products are the mainstay of prescription drugs.”
• Reference pricing. If a number of similar drugs are available in the same drug class, reimbursement is based on the cheapest. The other drugs in the class are available “but patients pay the difference in drug prices.”
• Therapeutic substitution. The pharmacist substitutes a different, less expensive, drug that is supposed to do the same thing.
• Restrictions on consumer advertising. Direct-to-consumer advertising “has effectively increased the use of promoted drugs, often as the expense of equally effective, safe, and less expensive products,” Furberg said.
• Restrictions on add-on patents or patent extension. Extensions add to a drug’s patent protection. “These legal maneuvers delay the release of less costly generic products,” he said.


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Media Contacts: Robert Conn,, Shannon Koontz,, or Karen Richardson,, at 336-716-4587.

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