Summary

GAO compared U.S. prescription drug prices with the prices of identical drugs in Canada and the United Kingdom. GAO also reviewed the policies that Canada, France, Germany, Sweden, and the United Kingdom have adopted to limit national expenditures on prescription drugs. Although government regulation has restrained drug prices in these five countries, the implications--and the desirability--of similar intervention in the U.S. pharmaceutical market are unclear. More specifically, the effects of a price reduction in any of these countries may differ from the effects of a similar price cut in the United States because each of the five countries represents a relatively smaller share of the global pharmaceutical market. In addition, the particular price and spending control policies used in these countries may not be readily transferred to the United States because of institutional differences across countries. In any case, any gains from regulation of drug prices or spending must be weighed against the consequences of such regulations for pharmaceutical research and development.