Prescription Drugs:

Spending Controls in Four European Countries

HEHS-94-30: Published: May 17, 1994. Publicly Released: Jun 17, 1994.

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Pursuant to a congressional request, GAO reviewed how France, Germany, Sweden, and the United Kingdom regulate prescription drug prices, focusing on the: (1) strategies used in these countries to control prescription drug prices and limit pharmaceutical spending; and (2) effects of these policies on pharmaceutical prices and spending, and on pharmaceutical research and development.

GAO found that: (1) in the countries studied, the principal policy to control drug spending focuses on the price that manufacturers can charge; (2) each of the countries has imposed additional controls on consumers and physicians and increased the consumers' share of drug costs; (3) these policies have limited the growth in drug prices, but drug spending has increased due to increases in drug consumption and the use of new expensive drugs; (4) pressures to reduce the growth in prescription drug expenditures in these countries have spurred efforts to make patients and physicians more aware of drug prices and more financially responsible for drug spending; (5) pharmaceutical prices in these countries have risen slower than the inflation rate; and (6) reductions in drug prices could lead to lower research and development expenditures.

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