People around the globe are finding that financial bailouts are a bitter pill to swallow. When the United States and European governments agreed to bail out the financial services sector, it came at a huge cost to social programs, such as education, pensions and health care. People in Greece, the UK and elsewhere have taken to the streets to protest the bailouts and extreme cost-cutting that have followed.
While drug makers in the United States continue to set their own pricing schemes, countries in Europe have taken a direct approach to reducing drug costs.
A report on the economic crisis' impact on pharmaceutical pricing by Cutting Edge Information, a pharmaceutical market research company, says that reimbursement for drug and device treatment continues to be a focal point for budget reductions in Europe. The emphasis on comparative effectiveness research and more value-based pricing is also impacting the industry, according to the report.
Germany's first-ever price controls legislation, a 2 percent across-the-board price cut for pharmaceuticals enacted in May 2010, likely triggered the price cuts in other EU countries.
According to the Financial Times, Greece, Germany, Spain, Ireland, Denmark, Sweden, France and the United Kingdom have reduced medicine expenditures through legislation that cuts or freezes prices, and through agreements with industry on new rebates.
While facing similar deficits and cuts to social programs, the United States government remains unwilling to limit pharmaceutical prices, even as the publicly funded Medicare program assumes the greatest share of drug payments.