To Reduce the Cost of Drugs, Look to Europe

There is a way to keep prices low while encouraging drug companies to innovate: Look to Europe and elsewhere, where drug prices are a fraction of those in the United States. Germany, Spain, Italy and a half dozen other countries have pushed drug prices lower with a system called reference pricing. It has led to drug price decreases and significant savings in the Canadian province of British Columbia as well as in Germany, Italy, Norway, Spain and Sweden. A study published in the American Journal of Managed Care found that price reductions ranged from 7 percent to 24 percent.