A Comparison of Prescription Drug Availability

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Bringing a potential new drug to market is no simple feat, and it requires years of both research and clinical trials to ensure its safety and efficacy. In regard to the latter, late-stage clinical development often requires that research be conducted and funded by large, multinational pharma companies.

However, there are various factors that can impact whether new drugs become available in a given country, including duration and review requirements, expected revenue, and considerations surrounding drug price regulation in each specific country; manufacturing capacity, supply chains, marketing capabilities, and partnerships can also play a role. Interestingly enough, the United States pays four times more for brand-name retail drugs than other high-income nations, even after factoring rebates and other discounts into consideration.

A report published by the RAND Corporation, a nonprofit research organization,¹ analyzed both the availability and timing of market entry for 287 new drugs that were launched between 2018 and 2022 in the United States, along with 26 comparison countries representing the Organization for Economic Co-operation and Development (OECD). The specific results focused on availability by Q4 2022 and on entry timing, which was measured using the length of time in quarters, from the first entry in a country market to individual entry.

Of these drugs, over half were launched in both the United States and at least one other country by Q4 2022. In that year alone, those that were sold both inside and outside the United States represented 90.4% of US spending and 95.4% of other-country spending on new drugs.

The investigators also determined that entry into the United States came one year prior to entry in the comparison country, which could be attributed to differences in regulatory approval processes and different requirements surrounding economic evaluation. Manufacturers are often able to list prices more freely in the United States as compared to other countries where launch prices are regulated, including in the European Union.

The authors noted that there are myriad reasons why companies launch new products in the United States first before moving to other countries.

“For example, countries may launch first in markets where they have more latitude to set prices (namely, in the United States) before launching in countries that use external reference pricing, which ties domestic prices, at least partially, to those in other countries,” the authors wrote. “There are also likely important differences in regulatory approval timelines, whether economic evaluation processes outside the United States run in parallel or in sequence with regulatory approval, supply chain considerations, and other factors.”

Other notable determinations included:

• Twenty-six percent of new drugs (75 of 287 new drugs) were not sold in the United States by Q4 2022; South Korea and Japan were heavily responsible for that share, representing 54% and 36% respectively.
• Conversely, it is also important to note that some new drugs available in the United States by Q4 2022 were launched earlier in other countries, due to business decisions that sponsors made, or because of regulatory review decisions that these governments made. These specific drugs could potentially be lower priced, or even offer treatment options that might not be available to US patients.

“Other wealthy nations—all of which have much lower drug prices compared to the US—see the introduction of new medications within a few quarters of when they are first sold globally,” said Andrew Mulcahy, author of the report and a senior health economist with RAND. “While the US is often the first country where new drugs are sold, the most clinically and economically important new drugs are available broadly.”

Reference

1. Mulcahy A. Comparing New Prescription Drug Availability and Launch Timing in the United States and Other OECD Countries. RAND Corporation. 2024.