Feb 11, 2019

How other countries set their drug prices

The debate around prescription drug prices — including the Trump administration's proposal tying some Medicare drug prices to what other countries pay — raises an important question: How do other countries decide what to pay for drugs?

Why it matters: A recent World Health Organization report on cancer drugs, which found that cancer drugs' high cost is largely unjustified by development costs, detailed a handful of methods other countries use.

  • Cost-based pricing: A price is calculated by totaling the costs of producing the drug and then adding a profit margin.
  • Value-based pricing: A price is determined by the worth individuals and society place on the medicine. Measures of value can include need for the medicine, clinical evidence, economic and financial impact and innovativeness.
  • Reference pricing: This method uses benchmark prices to determine the price of a new drug, either from other countries or from a group of comparable medicines.
  • Tendering: This is a bidding process where the winning supplier is awarded a contract.
  • Negotiation: Often used in combination with the other pricing approaches to reach a deal between payers and suppliers.
  • Some countries also regulate markups along the drug supply and distribution chains.

The bottom line: All of these methods are complicated and have their own drawbacks, but the question of how to regulate drug prices has been asked and answered many times before.

Go deeper: U.S. drug prices don't translate to better health

Go deeper

Italy reports lowest number of new coronavirus cases since February

Italy’s aerobatic team Frecce Tricolori fly over Milan in Duomo Square on May 25. Photo: Francesco Prandoni/Getty Images

The Italian government reported 300 new cases of coronavirus on Monday, the lowest daily increase since Feb. 29.

Why it matters: Italy, the first country in Europe to implement a nationwide lockdown after emerging as a hotspot in March, appears to have finally weathered its coronavirus outbreak. Italy has reported nearly 33,000 total deaths, the third-highest total behind the U.S. and U.K.

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 2 p.m. ET: 5,453,784 — Total deaths: 345,886 — Total recoveries — 2,191,310Map.
  2. U.S.: Total confirmed cases as of 2 p.m. ET: 1,651,254 — Total deaths: 97,850 — Total recoveries: 366,736 — Total tested: 14,163,915Map.
  3. World: Top Boris Johnson aide defends himself after allegations he broke U.K. lockdown — WHO suspends trial of hydroxychloroquine over safety concerns.
  4. 2020: Trump threatens to move Republican convention from North Carolina — Joe Biden makes first public appearance in two months.
  5. Public health: Officials are urging Americans to wear masks over Memorial Day.
  6. Economy: White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election — Charities refocus their efforts to fill gaps left by government.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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Updated 1 hour ago - Politics & Policy

Joe Biden makes first public appearance in over two months

Photo: Oliver Douliery/AFP via Getty Images

Former Vice President Joe Biden made his first in-person appearance in over two months on Monday to honor Memorial Day by laying a wreath at a Delaware veterans park, AP reports.

Why it matters: Biden, the Democratic Party's presumptive nominee, has taken the unprecedented step of campaigning from his home during the coronavirus pandemic, ever since canceling a rally in Cleveland on March 10.