TABLE 1.

Characteristics of IRP Among 19 US Comparator Countries and 3 US Policy Proposals^7-15

Country	% GDP on drug spending a	% US GDP per capitab	IRP is primary pricing tool	Countries in basket, n	Covered lives (millions)c	IRP applied to which drugs	How the basket is referenced	Other methods used
Japan*	1.97	61.82	No	4	126.40	Brand named and reimbursede	Range 75%-125% of average	Cost basisf, DTRPg, HTAh
United States: HR 3	1.95	100.00	No	6	62.98	250 most expensive, brand-name, single source drugs for Medicare	Average	HTA, cost basis
United States: executive order			Yes	likely 19		All drugs in Medicare Parts B and D	Lowest	N/A
United States: CMS interim final rule			Yes	likely 19		50 Medicare Part B drugs	Lowest	N/A
Canada*	1.75	70.94	No	7 (11 as of mid-2021)i	37.06	Brand name	Median	HTA, DTRP
Germany*	1.63	71.04	No	15	82.91	Brand name and reimbursed	Weighted average	HTA, DTRP, informal IRP
Belgium	1.51	70.82	No	27	11.40	Brand name	Average	DTRP
France*	1.47	62.12	No	4	66.94	Brand name and reimbursed	Range between highest and lowest	HTA, DTRP, spending caps,j other
Switzerland	1.46	125.90	Yesk	9	8.513	On-patent	Average	HTA, DTRP
Australia*l	1.27	84.32	No	0	24.99	N/A	N/A	HTA, DTRP, cost basis
Austria	1.24	77.21	Yes	27	8.838	Brand name	≤Average	Otherm
United Kingdom*	1.23	64.96	No	0	66.44	N/A	N/A	HTA, spending caps, other
Finland	1.12	74.77	No	29	5.516	Brand name	Averagen	HTA
Sweden	1.07	79.26	No	0	10.18	N/A	N/A	HTA
Israel	0.94	67.02	No	7	8.873	All	Average	Other
Iceland	0.92	102.80	No	4	0.353	Brand name	Average (outpatient) or lowest (inpatient)	HTA, DTRP
Ireland	0.86	120.80	Yes	14	4.857	Brand name and reimbursed	Average	HTA, DTRP
Norway	0.75	115.80	Yes	9	5.312	Outpatient brand name	Average of 3 lowest	N/A
Netherlands	0.74	80.54	No	4	17.23	Brand name	Average	HTA, DTRP
Denmark	0.65	91.87	No	9	5.790	Inpatient brand name	Average	HTA, DTRP
New Zealand	−	64.63	No	0	4.886	N/A	N/A	HTA, DTRP
Luxembourg	0.60	176.15	Yes	1o	0.608	Brand name	N/A	data missing

Note: Blue shaded rows are countries that do not use IRP; those marked with * are named in the Cummings bill.

^a2019 data from https://data.oecd.org/healthres/pharmaceutical-spending.htm#indicator-chart. Data for New Zealand is missing; it is positioned by percentage of GDP on health spending.²³

^b2019 GDP per capita from https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?most_recent_value_desc=true.

^cCountry population except for United States. Data since 2018 from https://data.oecd.org/pop/population.htm. US data (October 2019) is total Medicare enrollment (https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/CMSProgramStatistics/Dashboard).

^d “Brand-name” drugs encompass those that do not face competition and usually are still under patent protection. The countries in the table have separate regulations for pricing generics.

^e Reimbursed medications are those included on a positive reimbursement list and paid for (in part or in full) by national insurance programs.

^fCost-basis pricing considers the costs to manufacturers to produce the medicine and may include research and development costs.²⁴

^g DTRP is the practice of setting prices for new drugs to be the same as those for clinically similar drugs unless additional effectiveness can be proven, in which case HTA is often used to determine the extent of additional benefit and therefore the appropriate price. Some countries use periodic price competition to set the maximum price or reimbursement rates for a class of drugs, including on-patent, branded ones.

^h HTA is broadly applied here to cover pricing approaches based on comparative effectiveness. Such approaches are sometimes called “value-based pricing.”

ⁱCanada will be dropping the United States and Switzerland from its current basket and adding 6 countries in July 2021. This table reflects the 2020-2021 basket (https://www.canada.ca/en/patented-medicine-prices-review/services/legislation/about-guidelines/guidelines.html).

^j Health system spending on pharmaceuticals is capped and manufacturers are responsible for paying back overspend.

^kIRP is used to weight two-thirds of the price calculation.⁷

^lUntil 2014, prices were referenced to “reasonably comparable overseas countries,” probably New Zealand and the United Kingdom (https://www.pbs.gov.au/info/industry/pricing/pbs-items/pba-policies-procedures).

^m “Other” is used here as an inclusive category for discount agreements that may be negotiated with manufacturers, such as risk-sharing agreements, volume-based agreements, managed entry agreements, or other discounts and rebates.

ⁿThough IRP information is collected, there is limited information on its use, and it appears to inform negotiations rather than be regulated as a price ceiling.⁷

^o Luxembourg references to the country of origin of the drug.

CMS = Centers for Medicare & Medicaid Services; DTRP = domestic therapeutic reference pricing; GDP = gross domestic product; HTA = health technology assessment; IRP = international reference pricing; N/A = not available.