Comparing New Prescription Drug Availability and Launch Timing in the United States and Other OECD Countries

Prescription drug research and development (R&D) is, particularly in its most expensive later stages, an increasingly global endeavor undertaken by large, multinational firms. However, the availability of the resulting new drugs in individual countries and the timing of their launch can vary because of regulatory differences, business decisions, and other factors (Downing, Zhang, and Ross, 2017; Varol, Costa-Font, and McGuire, 2012; Danzon and Epstein, 2012; Danzon, Wang, and Wang, 2005; Kanavos et al., 2013; Kyle, 2006; Houy and Jelovac, 2015).

The now-enacted Inflation Reduction Act of 2022 (IRA) (Pub. L. 117-169, 2022) and other policy proposals aim to lower U.S. prices for brand-name drugs that are between three and four times as expensive as in other higher-income countries (Mulcahy, Schwam, and Lovejoy, 2023). Some stakeholders assert that lower U.S. prices will prevent U.S. patients from accessing some drugs sold in other countries or delay the launch of new drugs in the United States (Haninger, 2019; PhRMA, 2019; PhRMA, 2023; The Exchange, 2023).

Although the Congressional Budget Office and others have modeled the potential implications of changes in U.S. net revenue on drug R&D broadly (Congressional Budget Office, 2022; Adams and Herrnstadt, 2021), few studies have described differences in new drug availability and the timing of new drug launches between the United States and other higher-income countries.

This study presents results from an analysis of the availability and timing of market entry for 287 new drugs launched between 2018 and 2022 in the United States and 26 comparison Organisation for Economic Co-operation and Development (OECD) countries. The results focus both on availability—that is, whether new drugs are available in each individual country by quarter 4 (Q4) 2022—and on the timing of entry, which we (the author, with support from members of the project team) measure in terms of the length of time in quarters from first entry in any country market to entry in each individual country.

Data and Methods

We used 2017–2022 IQVIA MIDAS data as our primary data source. The IQVIA MIDAS data include country-level, quarterly estimates of total sales and volume for individual drug products and cover a broad range of prescription and non-prescription drugs. We used data for prescription drugs only and identified new drugs as those without sales in any of the 27 study countries in 2017 but with sales from 2018 through 2022. Including the United States, we used data from 26 comparison OECD countries with both retail and hospital data available in the IQVIA MIDAS data.¹

Results

Of 287 total new drugs, we found that, by Q4 2022,

• 164 (57 percent) were sold in both the United States and at least one other country
• 48 (17 percent) were sold in the United States but not in any of the other study countries
• 75 (26 percent) were sold only outside the United States.

The United States had more total new drugs sold by Q4 2022 (212, or 74 percent of all new drugs) compared with any other individual country. Germany had the second-highest share, with 149 (52 percent of) new drugs.

New drugs sold in both the United States and at least one other country by Q4 2022 accounted for 90 percent of 2022 spending on all new drugs in the United States. This percentage was higher for 2021 (95 percent) and would likely be higher in 2023 given that the “U.S.-only” new drug with the greatest U.S. sales was launched in other countries one quarter after the end of our study period. Of the top ten new drugs available in both the United States and other countries by U.S. sales, nine were sold in 14 or more countries, and six were sold in 23 or more countries.

In terms of launch order and timing, we found that more than half of new drugs were launched first in the United States, and there was an average lag of about one year between launch in the United States and launch in other major OECD markets (Australia, Canada, France, Germany, Italy, Japan, and the United Kingdom). Some new drugs launched in other countries before they were launched in the United States. At any point in time over our study period, we found that the likelihood of launch of a new drug was considerably higher in the United States versus in other countries.

Conclusion

We found that most new drugs are sold first in the United States, that the United States has access to the largest share of new drugs overall, and that new drugs are typically sold in other major high-income OECD countries about one year after they are launched in the United States. At the same time, our results suggest that the most-important new drugs to industry—those with considerable revenue potential—are ultimately sold broadly across multiple countries. There are likely many reasons why companies launch new products first in the United States and then gradually over time in 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. 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. It remains unclear whether increases or decreases in U.S. brand-name drug revenue would substantively affect the availability of new drugs in the United States, the timing of the initial marketing of new drugs globally, or the relative timing of launch in the United States versus other countries.