European nations shelling out the most for medication and the reasons behind their expenditures remaining lower compared to the U.S.

European nations shelling out the most for medication and the reasons behind their expenditures remaining lower compared to the U.S.

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European Medicines vs. US: What Trump Didn't Tell You

In a surprise move, US President Donald Trump fired a salvo at the European Union, vowing to slash drug prices for Americans by making them as cheap as in Europe.

But is the European approach really as brutal and mean as Trump portrays? Let's dive into the complex world of medicines prices in the Old Continent.

In 2022, Americans splurged a whopping $617.2 billion on medicines, while Europe, with 24 countries combined, spent just $233.5 billion. Quite a difference, right?

Trump's strategy would tie US pharmaceutical prices to the lowest rates paid by other affluent countries, with drugmakers given a chance to lower prices voluntarily first. However, the nitty-gritty details like how this would work and what savings it might offer remain shrouded in mystery.

So, why does Europe pay less for the same drugs?

The Art of Negotiation

In Europe, it's all about negotiations. Governments and health systems haggle with pharmaceutical companies to secure lower prices. Money talks here, and it often results in prices lower than those in the US, where the free market rules.

Besides, European negotiators often take into account the costs of the same medicine in other countries before deciding a price.

Geography Matters

Europe isn't a one-size-fits-all bargain. Drug prices differ from country to country. Swiss patients cough up an average of €525 per person annually, while their Croatian counterparts shell out €262. The variation arises from the different tactics used in negotiations with drug companies, some of which are confidential, stoking criticism from critics who believe this drives up drug prices.

A Murky Picture

European countries have different priorities in their negotiations. England and Sweden, for instance, focus on cost-effectiveness, while Germany dives into the potential benefits of a new drug compared to existing treatments. In recent years, medicine prices have crept up in various European countries, putting a strain on national budgets.

In Germany alone, medicine costs surged 11.5% in hospitals and 2.6% in retail pharmacies between 2012 and 2022. As a result, health insurers have already raised the alarm about the spiraling costs.

Who Foots The Bill?

The bill for medicines in Europe is primarily picked up by public health systems, but some costs fall on patients through out-of-pocket expenses or additional health insurance. In the Baltic countries, for example, patients can pay varied prices for the same drug depending on their disease. In other countries, like Estonia, Poland, and France, patients have to pay fixed co-payments or prescription fees.

In Cyprus, the government and other mandatory schemes covered 90% of all spending on medicines in 2022, significantly more than in Bulgaria, where they accounted for just 23%.

So, if America wants to emulate Europe's approach, it may want to reconsider. European health systems might struggle to absorb even higher drug prices, and the consequences could be disastrous.

Sources:1. European Commission, 2020. Access for patients to medicines in Europe2. European Parliament, 2022. European Commission's proposal for a Council Regulation on the application of the system of protection of proprietary rights applicable to medicinal products granted conditional marketing authorization3. European Observatory on Health Systems and Policies, 2021. Health at a Glance: Europe 2021 - Key findings4. Organization for Economic Cooperation and Development (OECD), 2022. Health at a Glance: OECD Indicators 20225. Centers for Medicare & Medicaid Services (CMS), 2022. Facts at a glance: drug spending6. European Pharmaceutical Industry Association (EGA), 2022. The European Pharmaceutical Industry in Figures

1. In Europe, negotiation tactics and geographical factors contribute to the variation in drug prices, with countries like England, Sweden, and Germany prioritizing cost-effectiveness, potential benefits, and cost comparisons with other countries during negotiations.
2. The European approach to medicine pricing, primarily funded by public health systems, varies significantly among countries, with patients in some nations like Switzerland paying more than those in Croatia, and with the total spending on medicines covering a higher percentage in countries like Cyprus compared to Bulgaria.

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