National and International Differences in the Prices of Branded and Unbranded Medicines

Abstract

This study examined retail prices of products containing 22 off-patent active substances, in branded (both original product and branded generics) and unbranded forms, in nine countries. Defined daily doses (DDDs) were used to calculate unit prices (price/DDD) in order to ensure standardised comparisons. Median unit prices for each substance in each country were computed. Brand premiums (price of branded/price of unbranded product) were calculated. Sensitivity analysis was undertaken on key variables to test the robustness of the conclusions reached. Median prices and brand premiums varied considerably across the countries surveyed. Few general trends could be identified, but Germany was the country with the highest prices, both for branded and unbranded products. Branded products are generally more expensive than their unbranded equivalents. Brand premiums were found to be much higher in Eastern European than in Western European countries. The availability of cheaper unbranded products is the most frequent reason for greater brand premiums. A number of local factors — related health policy, market structure and tax policy — contribute to the determination of the prices of medicines. Comparison of retail prices within each country, and national and international price variations between branded and unbranded forms of comparable products, led to the conclusion that medicine pricing at the national level may benefit from the improved availability of price information from other countries. The originality of this study lies in the comparison of retail prices between branded and unbranded products, which, for consumers, is the most visible difference between pharmaceutical products. The methodology used in this study may be a useful tool for consumer organisations and policy makers when addressing pricing and reimbursement issues.