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If the U.S. wants a better deal on some medicines, the federal government could try pegging prices to what is paid by Japan, the U.K., and the Canadian province of Ontario.

Why? A new study finds that prices paid for 79 different brand-name prescription drugs averaged 3.2 to 4.1 times higher in the U.S. and that if Medicare Part D had used the same pricing as in those other locations, the federal health care program could have saved nearly $73 billion last year. The analysis also found that the longer a drug was on the market, the larger the difference in pricing grew.


The researchers explored what is known as reference pricing, which is used by some countries to benchmark drug prices to those paid elsewhere. An estimated 29 European countries as well as Australia, New Zealand, Brazil, and South Africa use this approach to set and negotiate drug prices, according to the authors of the study, which was published in Health Affairs.

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