Drug pricing and transparency in Europe and the United States: what is it and how does it work?

Abstract

ABSTRACT Introduction As drug prices are viewed to be opaque, there have been increasing societal demands on policy and decision makers to implement initiatives that promote drug price transparency. Areas covered This Perspective discusses what drug price transparency is and how it works in theory and in practice. Expert opinion Transparency on drug prices may target payers, patients and health care professionals; and may relate to prices at each stage in a drug’s distribution system. Although proponents claim that drug price transparency will reduce prices and increase patient access, others expect the opposite effect. Nevertheless, a number of international organizations, countries and consumer groups have taken steps to enhance drug price transparency. This has occurred despite a lack of theoretical clarity and of evidence about its likely impact. Policy and decision makers need to consider how payers and pharmaceutical companies are likely to react to drug price transparency and need to be aware that transparency may produce different effects depending on the country to which it is applied. Even though we believe that full drug price transparency is elusive, various incremental measures can be taken to move toward it.