Drug prices are the subject of increased debate as countries are faced with rising healthcare costs and limited budgets. Concerns include the high cost of new medicines, price variation between countries and the impact of price on access to life-saving medicines in the developing world.

We believe that prices of innovative medicines should be based on value, not on production costs.

Variation in drug prices that consumers pay at pharmacies is mostly due to markups from the distribution chain (including wholesalers and pharmacists) rather than variations in ex-factory prices charged by manufacturers.

In theory, prices for medicines should vary across countries based on their wealth, their economic ability and willingness to pay and the cost of alternative therapies. In practice, international price referencing and parallel trade lead to regional price convergence, affecting patients and delaying access to medicines.

Where patents have expired and medicines are available from multiple sources, prices should be regulated by market forces: supply and demand.

We get medicine to patients, particularly in the developing world, by supplying it at cost and making it available through patient-access programs.

Learn more about our views about drug pricing on our corporate citizenship website