Total savings to drug buyers from legalized commercial importation would be one to two percent of total drug spending and much less than international price comparisons might suggest. The savings going directly to individuals would be less than one percent of total spending. Most of the savings would likely go to third party payers, such as insurance companies and HMOs.💊
Richard H. Carmona, M.D., M.P.H., F.A.C.S. Surgeon General
U.S. Public Health Service
U.S. Department of Health and Human Services Wednesday, January 26, 2005
💊 This, of course, would be reflected in premiums.
And another study:
Commercial Importation of
Prescription Drugs in the United States:
Patricia M. Danzon
University of Pennsylvania
– Scott J. Johnson -Genia Long Analysis Group
-Michael F. Furukawa
Arizona State University April 2011
The option of legalizing the commercial importation of prescription drugs is of continued policy interest as a way to reduce U.S. drug spending. Using IMS data, we estimate potential savings from commercial drug importation under assumptions about percentage of drugs likely to attract imports; potential supply from foreign countries; and share of savings passed on to payers.
Our base case estimate is that $1.7 billion per year, or 0.6 percent of total drug spending, would be saved by payers; sensitivity analyses range from 0.2 to 2.5 percent under plausible assumptions and up to 17.4 percent under unrealistic assumptions about unlimited foreign supply, costless trade, and zero profits for intermediaries.
Estimated savings to payers are less than the average price differentials between the United States and foreign countries because proposed legislation exempts certain drugs from importation; foreign markets are small relative to the United States; regulatory and other constraints may limit the volume of exports; trade is costly; and intermediaries will retain some savings.
Although savings to U.S. payers/consumers would likely be small and have minimal impact on total U.S. health care spending, costs to other countries could be significant, due to reduced access and possibly higher prices. In the long run, reduced investment in R&D could adversely affect consumers globally.
The US subsidizes the rest of the world, the US generates most of the new drugs in the world. European governments fix the price of drugs so they are not paying their full share of developmental costs and if drug companies don’t comply, they are penalized or can’t sell their drugs.