INTRODUCTION: Pharmaco-economics plays a pivotal role in clinical practice. High medicine prices can adversely affect a patient's finances and thus his/her compliance. The prices of drugs have a high level of economic implication for the people and also for the nation. Drug prices affect patient compliance; they affect public health and thus affect the progress of a nation. Different nations have different regulatory systems for the control of prices of drugs. Pharmaceutical market structure also differs greatly across nations in range of compounds, presentations, use, generic shares and number and type of manufacturers. This diversity makes a perfect price comparison, a difficult proposition. However, some studies are available, which found out, using valid techniques, significant differences in prices among different countries. These studies are not of mere academic value. They help us in understanding the effect of: 1. Regulatory systems on prices. 2. Market structure on price. 3. Innovation and R&D on prices. 4. National income and GDP on prices. When, by means of these studies we come to know about the differences in prices we can exploit them to our advantage, as the world is doing now. Against this backdrop, we made a small study involving the comparison of prices of 10 popular drugs in five countries. The data and the analysis are shown in tables. The prices of these medicines are recorded from a website called, www.canadahealthsolutions.com/RXMednet/ext_drugs.asp under Prescription Drug Price Search in February 2007. This tabulation and comparison was done in February 2007. 1. Table I shows the prices of the 10 drugs in terms of rupees in 5 countries. It is clearly seen that for 4 drugs the prices in USA are the maximum, for 1 drug Canada, for 1 drug UK, and for 2 drugs Australia prices are the maximum. It shows the Indian prices are the lowest for all the drugs. Table I also shows the per capita GDPs of the 5 countries. It also shows in the last column the correlation coefficient, we calculated between the per capita GDP of each country and its price of the drug, for every drug. The correlation coefficient varies in the range of 0.38-0.740 and has an average value of 0.521. This shows that per capita GDP of a country has at least a partial bearing on the prices of drugs. 2.By way of Table II, we are trying to show that if a price index is calculated after being weighted by per capita GDP, the differences in the prices are not much. Table II shows in each cell, a value obtained by dividing the price with the per capita GDP and multiplying with 100. The differences seem to be less when the indexes are compared rather than the actual prices.

Table I: February 2007 Price; Each product is calculated in rupee value per tablet.[1]

Per Capita GDP	42,000 $	37,023 $	35,133 $	34,740 $	705 $	r
NAME OF THE DRUG	USA	UK	CANADA	AUSTRALIA	INDIA
Ciprofloxacin 500 mg	423.26	324.77	132.67	213.8	6	0.38
Gliclazide 80 mg	63.7	53.77	28.39	9.15	3.5	0.7
Ibuprofen 600 mg	2.2	0.43	6.76	6.67	0.9	0.594
Indomethacin 25 mg	3.63	4.87	9.25	10.85	1.5	0.52
Insulin 100 IU/ml	124.18	131.05	363.93	219.53	208	-0.1
Isosorbide Mononitrate 20 mg	19.82	59.87	41.55	30.51	3.2	0.656
Ofloxacin 200 mg		144.63	109.8	192.15	4
Omeprazole 20 mg	111.47	91.54	201.97	109.15	4	0.74
Paracetamol 500 mg	12.55	4.43	2	12.98	1	0.59
Propanolol 10 ml	61.41	32.33	11.61	6.49	2	0.67

Table II: Price per tablet in rupees weighed by per capita GDP [1]

Per Capita GDP	42,000 $	37,023 $	35,133 $	34,740 $	705 $
NAME OF THE DRUG	USA	UK	CANADA	AUSTRALIA	INDIA	Range
Ciprofloxacin 500 mg	1.008	0.8772	0.3776	0.6154	0.851	0.6304
Gliclazide 80 mg	0.151	0.1452	0.808	0.0263	0.4964	0.4701
Ibuprofen 600 mg	0.0052	0.0146	0.0192	0.194	0.1276	0.1224
Indomethacin 25 mg	0.0086	0.013	0.0263	0.0312	0.2127	0.2041
Insulin 100 IU/ml	0.2956	0.353	1.0358	0.6319	29.503	29.2074
Isosorbide Mononitrate 20 mg	0.0471	0.1617	0.1182	0.0878	0.4539	0.4068
Ofloxacin 200 mg		0.3906	0.3125	0.5531	0.5673	0.2548
Omeprazole 20 mg	0.2654	0.2472	0.5748	0.3141	0.5673	0.3276
Paracetamol 500 mg	0.0298	0.0119	0.0056	0.0373	0.1418	0.1362
Propanolol 10 ml	0.1462	0.0873	0.033	0.0186	0.2836	0.265

The conclusion we are drawing from this result is that prices raise or go down in response to the general income level of a region. Companies also charge what they think the market can bear. USA:[2] USA is a big player in the innovation of drugs. The US market is based on competitive structure and is thoroughly supported by insurance companies. It is not strictly controlled by regulations. IPR protection is high. This has resulted in 1. Relatively high prices for on-patent original products. 2. Relatively high use of new products. 3.Strong generic competition. 4. High generic shares and 5. Low generic prices. Pharmaco-economic studies found some interesting things. 1. Generic drugs are not only cheaper but they are generally rising in price at much slower rates than Branded drugs. 2. US- Drug prices are 70% prices higher than prices in Canada and 102% higher prices than in Mexico. Here companies are allowed to price their own products without interference from the Government. Drug prices are determined by a. Cost of R&D b. Marketing and Distribution c. Demand for the product d. Potential profit and e. Perceived therapeutic outcome. The USFDA is almost obsessively careful about the safety and efficacy of the drug products being made available in USA. They thoroughly regulate the US Pharmaceutical Industry as far as the quality of drugs are concerned. But as far as the prices are concerned the government does not interfere much. The companies fix their own prices for their drug products. The factors that influence the prices of drug products are: 1.Costs of meeting government regulations. 2.Cost of R& D. 3.Cost of marketing and distribution. 4.Demand for the pharmaceutical product. 5.Profit expected. 6.How much the therapeutic effect is better than the existing products. U.K: [3] One can safely say that almost all UK people get their healthcare service free. The system in UK runs like this. The government of UK goes into a voluntary agreement with the Association of British Pharmaceutical Industry. Through this agreement the profits of the pharmaceutical industries are controlled and the prices of drug products are reigned in. Only a few patients pay some small co-payment for their drugs. For most patients the medicines come free as the National Health Services pays the bill for the medicines. There are two institutions; The National Institute of Clinical Excellence and the Health Technology Board which assess the therapeutic effectiveness and the cost effectiveness of the drug products being made available in UK. So UK is a very controlled environment as far as drug products are concerned. CANADA: [4,5] In Canada, the Federal government is responsible for intellectual property rights of manufacturers (patents) and the initial approval and labeling of prescription drugs and for ensuring overall market competitiveness. The provincial government owns responsibility over the funding of all health care services, including medicines. The Federal Government regulates drug prices. Canada has a unique way of controlling its drug prices. It takes into consideration the prices of a particular patented drug product in seven countries; USA, France, Switzerland, Germany, Sweden, UK and Italy. The median price among all these prices is considered and is fixed as the price of the patented product in Canada. This procedure is known as reference pricing. Government also takes into consideration how well the new patented product is comparable to the existing drug products in the same category. Canada also follows procedures like reimbursement and price cuts for costly medicines. These policies help the government of Canada in offering its population quality medicines at low cost. AUSTRALIA: [5] Australia has a system called Pharmaceutical Benefit Scheme (PBS). This uses reference pricing and cost utility methods for Drug Price Control. The Australian PBS results in some of the lowest prices for medicines in the world. Australia follows another procedure called Volume Limitation to regulate the prices of medicines. It imposes a price-volume agreement, on manufacturers of new medicines, which links a new drug's reimbursement price to a volume level. If the level is crossed, the manufacturer must provide compensation through price reduction or cash payments to the government or remove the product from the market. So the volume of production of the drugs as well as its price is controlled. INDIA: NPPA- is the National Pharmaceutical Pricing Authority which is an organization constituted by the government of India. This organisation's responsibility is to fix and revise the prices of controlled bulk drugs and formulations. Its objective is to enforce low prices and good availability of pharmaceuticals in India. The retail price formulations are worked out as per the formula of DPCO. R.P= [M.C. + C.C. + P.M. +P.C.]X [1+MAPE. /100]E.D. R.P. = Retail Price. M.C. = Material Cost. C.C. = Conversion Cost. P.M. = Cost of Packing Material. M.A.P.E. = Maximum Allowable Post- Manufacturing Expenses. E.D. = Excise Duty. CONCLUSIONS: 1.INDIAN drug prices are lowest in the world. 2.Drug prices are being influenced greatly by : a.The Regulatory System of the Government. b.The Income of the Nation. c.The Level of R & D in the country. d.The Nature of the Market. e.The Level of IPR protection. 3.Prices of drugs in USA are probably the highest in the world because: ? Government of USA does not control the prices. ? The manufacturers of pharmaceuticals fixe the prices based on: ? What price can the market bear? ? How much money is spent on R & D? ? What is the cost of marketing and distribution? ? Profits expected ? What is the improvement in therapeutic efficiency over the products present now in the country? 4.Prices in Canada, UK and Australia, are high compared to India because: a.the control measures in their countries are indirect measures, not direct like in India. b.these countries are trying to control the prices drug product wise and c.their GDPs are also high. India is a country where the drugs of high quality and low price are made and the world is exploiting this fact by importing drugs on a large scale, this is especially true with anticancer and anti AIDS drugs. There is medical and health tourism in India. People from USA and UK come to Mumbai and Chennai not only to enjoy India's oriental attractions but also to undergo major surgeries. This underlines the fact that today Indian doctors' skills are acclaimed, and its hospitals are appreciated as having international standards. The price of healthcare in India is very low compared to advanced countries. I would like to summarize by saying that when we make a comparison of the prices of medicines in different countries, we arrive at the following conclusions: 1. Drug prices are dictated by the overall income level of the people of the country. 2. Drug prices depend on how much control the government is exercising on the pharmaceutical manufacturers. 3. How much research and development is taking place in the field of pharmaceuticals and what is the cost of this R& D. 4. How much the government and the society are concerned about protection of intellectual property rights. References: 1. www.canadahealthsolutions.com/RXMednet/ext_drugs.asp? Accessed in February 2007. 2.There is a better way to help U.S. Consumers; Pharmaceutical Price Controls Abroad: An unfair trade policy; Executive summary of United States Republican Policy Committee headed by Jon Kyl given in November 6th 2003. 3.Summary of the Report on the pricing and reimbursement of medicines in the United Kingdom by Simon Hester by URCH publications, Publication Date June 2005. 4.Pharmaceutical policies in Canada: another example of federal- provincial discord; Aslam H. Anis, CMAJ , February 22, 2000; 162 (4). 5.Prices and availability of Pharmaceuticals: Evidence from nine countries content by Patricia M Danzon and Michael F Furukawa in Health Affairs in content.healthaffairs.org/cgi/content/full/hlthaff.w3.521v1/DC1 This blog doesn't contain any plagiarized material