Regarding PBMs, there is yet another factor to consider. Manufacturers must recover their costs. For approved drugs in the market and still on patent this is obvious because it’s visible. For medications that never gain FDA approval, the development costs are not so visible. But they are just as real, can be very large, and must be recovered too.
So I suspect part of the pricing differentials is a result of how the manufacturers allocate their development costs. For countries with price controls – e.g, Canada, the manufacturer allocates lesser development costs so their medications will meet mandated pricing. That leaves the remaining development cost to be absorbed by buyers in countries with no price controls. That would be mostly the U.S.
Of course this bookkeeping tactic means the manufacturer can show a profit on medications sold in e.g., U.S. and Canada p, even though the end prices are much lower in Canada.
I have to think when PBMs are the buyers, the same idea applies.
Regarding PBMs, there is yet another factor to consider. Manufacturers must recover their costs. For approved drugs in the market and still on patent this is obvious because it’s visible. For medications that never gain FDA approval, the development costs are not so visible. But they are just as real, can be very large, and must be recovered too.
So I suspect part of the pricing differentials is a result of how the manufacturers allocate their development costs. For countries with price controls – e.g, Canada, the manufacturer allocates lesser development costs so their medications will meet mandated pricing. That leaves the remaining development cost to be absorbed by buyers in countries with no price controls. That would be mostly the U.S.
Of course this bookkeeping tactic means the manufacturer can show a profit on medications sold in e.g., U.S. and Canada p, even though the end prices are much lower in Canada.
I have to think when PBMs are the buyers, the same idea applies.